British science is under scrutiny - so should be the transfer of research into commercial gain.
Scientists working in universities and industry fear that by the year 2000 Britain will be relegated to third division status in the world science league, with disastrous consequences for British industry and, of course, the economy. Their remedy to stop the rot is simple: more government money. Industrialists differ. They believe that money alone is not the answer.
Scientists think industry is culpable, too. They say that, in addition to inadequate government funding, companies do not support pure and applied science sufficiently, so that both academic and industrial scientific research is starved. A look abroad supports their apprehensions.
Government funding for R and D in 1990/1991 was £4.96 billion, of which only £1.69 billion was earmarked for university science research. Government R and D expenditure currently amounts to 0.9% of GDP, compared with 1.04% in Germany, 1.42% in France and 1.18% in the US. As these countries have a higher GDP than the UK and, except for the US, allocate most of their government-funded R and D to civil research, the British Government clearly spends far less on academic science in real terms than any of its major competitors.
In 1991 British companies spent a total of £5.39 billion on R and D, a meagre sum compared with countries such as Germany where, in 1990, just five companies - Siemens, Daimler Benz, Hoechst, Bayer and Volkswagen - spent a combined £8.5 billion. When the Independent ranked the world's companies by their R and D spend in June 1992 only one British company, ICI, reached the top 40.
Sir Hans Kornberg, professor of biochemistry and Master of Christ's College, Cambridge, uses other criteria to demonstrate the UK's decline: 'If you measure our standing by the number of times that British scientific papers are quoted, or by the patents that have accrued, or the Nobel prizes that we have won, then all these indicators show that we are no longer as preeminent as we were.'
Sir David Smith, Edinburgh University's vice chancellor, claims that the electronic scientific equipment used in foreign laboratories is superior to the UK's. Roger Cashmore, professor of physics at Oxford, notes that the number of exchange visits between British and foreign universities is falling. Igor Aleksander, a former manager at telecommunications company STC and now professor of electrical engineering at Imperial College, London, laments the apathy of industry. Twenty years ago, he says, 'most British industrial companies had their own development laboratories, often doing pretty fundamental research'. Today there were no more than 30 such laboratories in the electronics and engineering industry.
On the academic front, university scientists believe more cash is essential if they are to pursue advanced research on a par with their international competitors. The Save British Science campaign is demanding an extra £400 million a year for university science research (on top of the current grant of £1.69 billion). In industry, scientists and research directors are asking for tax incentives and grants in order to pursue 'nationally important' research and development work. In April, for example, GEC-Marconi and Dowty told the House of Commons Trade and Industry Committee that more government financial support for R and D was essential if Britain's aerospace industry was to survive.
The forthcoming White Paper on science and technology indicates that the Government has begun to listen to these anguished cries for help from academic and industrial scientists. William Waldegrave, the minister responsible for science, was inundated with advice. This included 800 pieces of written evidence. He emerged from this pile to take up the argument that university science research funding must be increased because of the potential commercial benefits. Waldegrave wants to fund more university/industrial research programmes. Any extra funds available to him will be channelled into 'generic research', ie projects that would be of wide-spread commercial interest to industry. This will probably be at the expense of financing for 'blue sky' science, ie projects driven more by intellectual curiosity.
Waldegrave's efforts to wring more money out of the Treasury for science have so far proved unsuccessful. However, even if he did secure financing, previous experience suggests that it may not ultimately benefit industry. In order for industry to gain from more funds being pumped into either university science or new industry/university ventures, it would have to succeed in capitalising upon that increased investment.
British companies have a history of failing to exploit scientific knowledge for commercial gain. The 70 scientists I have talked to in the last two years argued that before industry could reap the benefits of scientific research, it, and the City, had to transform their attitudes towards innovation. To exploit science more fully, British industry had to give its technical managers greater status and make them key participants in the strategic decision-making process. Peter Houzego, who left the electronics industry to join PA Consulting Group, explains: 'Almost all the scientists or engineers in British industry feel that they are used and abused by the company they work for, and that they have no say in what goes on. They feel they have no responsibility for what happens. They do what they are told, but they don't identify with their company.'
Colin Humphreys, professor of materials science at Cambridge University, says: 'What so often happens is that the scientists put a proposal to their company board, but most boards don't include a scientist or engineer so usually the proposal is assessed by an accountant who doesn't really understand it. When the idea is turned down, the scientist isn't given any explanation.'
The isolation of technical people from general management is common, says John Fisher, technical director at PA Consulting Group. 'If you look at a typical R and D department, you find that they're in a sort of cage. They are deliberately isolated from the rest of management and particularly from the marketing people. I recently worked with a big electronics company where brilliant research people were not allowed to talk to the marketeers. The result was that they invented things that they hoped the marketing people would like.'
Humphreys contrasts the UK approach to managing its scientists with that of other countries, such as Japan. 'I was recently asked to talk to a group of senior people at Hitachi,' he says. 'Round the table were senior management, the works foreman and people from marketing. We discussed the company's future plans and the impact these would have on the firm's technologies. There was a real debate between the research people and management.'
One company that has adopted the Japanese approach to R and D is Lucas Industries. Each division has set up Product Introduction Process (PIP) teams which bring together people from marketing, finance, engineering and manufacturing. These PIP teams create annual business plans based on market analysis, new product requirements and technical development plans. Lucas's mixed skilled teams are central to its philosophy of management, claims technical director John Parnaby. The teams are, in turn, supported by the group's Technology Council and Advanced Engineering Centre. In addition, the company helped to fund 14 professors of engineering, mostly specialising in manufacturing systems. Innovation is achieved through a series of interlocking relationships between different parts of the company and between the company and the universities. This degree of integration between the source of new ideas and the manufacturing of new products is still rare in industry.
Lucas's approach addresses a key issue in the exploitation of research - how to make 'technology transfer' work, ie, how to transfer new research-based ideas from the universities into industry. The Government's drive to improve technology transfer led to a number of initiatives in the '80s which brought together academics and industrial R and D managers.
These schemes have had mixed fortunes. One successful project scheme involves ICI, the Cookson Group and Birmingham University scientists. They are collaborating to develop superconducting materials for the next generation of silicon chips. Neil Alford, at ICI's chemicals and polymers division, is project manager. The reason it works, he says, is that each party in the project contributes some special expertise. 'There is a genuine partnership between us and a university. We have a very special knowledge of superconducting materials and the university has skills in electronics.' Alford's former colleague at ICI, Dr Derek Birchall, adds that a company can only exploit university research if it has some research expertise of its own. 'You cannot leap on to someone else's discovery if you have not got your own research base from which to exploit it.'
Dr Brian Richards, chairman of the British Biotechnology Group, cites his company's successful collaboration with a team of molecular biologists at Oxford. These scientists, led by Dr Alan Kingsman, are so familiar with the company that they have been able to suggest new products that are of real commercial interest. However, even where there is excellent communication between an academic scientist and R and D personnel, the company may not have the engineering development resources required to translate a new concept into a product.
Lucas's Parnaby believes that engineering's incapacity to turn a scientific idea into a marketable product is very damaging for industry. He argues that Britain fails to exploit science because it lacks an engineering infrastructure. By infrastructure he means a German-style group of large engineering universities with research institutes (all government funded), where the equipment and personnel are available to any company that wants to develop a new research idea.
Parnaby's ideas have found favour with the Science and Engineering Research Council, which would like to set up a series of 'Parnaby' centres.
Parnaby also believes that our university engineering faculties are too small and that many are more concerned with applied physics than with engineering and applications development. Without large numbers of high-quality engineering personnel in industry, he thinks Britain will never have an 'applications culture' in which scientific know-how is applied in a consistent way to the commercial needs of industry. 'I'm talking about highly skilled people who understand manufacturing systems and processes and who know how to develop a piece of technology. The problem for most British companies is that they are merely fine-tuning existing products.'
A further problem, he says, is that most companies do not have access to the funds necessary to develop new product ideas. Their financial constraints are often caused by shareholder pressure to pursue short-term profits. 'German and Japanese companies do not have this continual pressure from their shareholders to reduce their development costs,' he argues. 'Take our own aerospace development, for example. We have to run an engineering project for two to three years, testing the product while getting it approved by the various civil aviation authorities before we go into production. So for three years that project isn't earning any money. In a recession, companies like ours come under enormous pressure to cut all that R and D in order for us to continue to pay dividends.'
The UK's banking and fiscal systems deeply inhibit industry's ability to exploit science, believes Dr Nigel Horne, former divisional manager for GEC and STC, currently the information technology partner at KPMG Peat Marwick and a member of the Cabinet's Advisory Committee on Science and Technology (ACOST). Horne feels that we will never solve the problem of industry's poor investment in R and D until we tackle the financial obstacles hindering such investment. Neither the banking system nor the fiscal system encourage risk-taking of any kind. His views have been reflected in ACOST's 1991 report, which states that the primary reason why 'UK industry does not invest more in R and D and innovation' is the 'higher real cost of capital ... compared with Germany or Japan'. He argues that this undermines all our efforts to encourage more innovation in industry and explains why scientists and engineers are not welcome in industry. 'Everything the technical people talk about is long-term, but if you aren't able to think long-term because of the financial pressures upon you then your engineers and scientists become an embarrassment.'
Like Parnaby, Horne believes that what is needed is not more money spent on scientific research, but more investment in improving the processes of production. There was already too much pure research, he says. Now the UK had to find better ways of exploiting this research by placing greater emphasis on production skills. Manufacturing systems had to be vastly improved so that we could get the costs of our products down. It was at the pre-production, design-for-manufacturing stage that companies needed financial help, rather than at the research stage. Tax allowances for research, Horne says, have meant that companies have just done more research, whereas tax allowances for product development and the pre-production stage would be more useful.
Parnaby sees British industry trapped in a vicious circle. 'If industry doesn't have the infrastructure support from universities, the technical institutes and a stream of engineering PhDs with industrial project experience, then the value-added component of industry's products will become progressively lower. With less profitable products, industry will be increasingly unable to fund longer-term research and development and its products will fall further behind.' There had to be a team effort between industry and government in order to improve the infrastucture. 'You won't get better exploitation of science just by putting more money into it or by dealing with bits of the jigsaw, such as making the government research laboratories more market-oriented. You need to address the whole framework. You need to recognise that engineering research is just as important as science research.' Meanwhile, Parnaby adds, there were two things that industry could do. The first was to pick up the Japanese team approach to product development by bringing financial, marketing and R and D people together at the start of a new product development. The second was for 'large companies and their smaller suppliers to collaborate on research and development programmes as so often happens in Germany and Japan'.
The unease about our scientific preparedness for the next millennium has penetrated sectors which have previously been oblivious to the problem. It is essential that the debate continues. Until the traditional mis-apprehensions between science and industry are resolved, British companies will be unable to match their more sophisticated international competitors.
The Second Culture: British Science in Crisis by Clive Cavendish Rassam is published by Aurum Press.