WEDNESDAY 2 DECEMBER 1998

MR JOHN WESTON and MR TREVOR TRUMAN

  575.  Mr Weston, Mr Truman, thank you very much indeed for coming along at relatively short notice to this Select Committee this afternoon to help us with our inquiry into innovation. Mr Weston, may I take it that we should direct our questions to you in the first instance and if you wish to invite Mr Truman to respond or if he wishes to make a contribution then of course we would be quite happy for him to do so. Before I put my first question to you, Mr Weston, would you like to introduce yourself to the Committee and then perhaps I will invite Mr Truman to do likewise.
  (Mr Weston) Good evening everybody. My name is John Weston and I am the Chief Executive of British Airspace, a post I have held for about six months now after something like 30 years next January in the industry in total. I will not bore you with a more detailed resume« than that.
  (Mr Truman) Until very recently I have been the Engineering Director of British Aerospace. I am still with the company, of course, and I have been much involved in our plans and activities across the company on science and technology for the last five years.

  576.  Thank you very much indeed. You are aware that we are doing this inquiry into innovation but the sub-heading of the inquiry could well be why are we so good at invention and relatively poor at turning our inventions into commercial advantage and we hope that you can help us in that inquiry with your own experiences. Mr Weston, what is your own company's philosophy underpinning your research and development processes and to what extent is research and development an important aspect of your company's current business and future success?
  (Mr Weston) It is absolutely fundamental given that we are an engineering manufacturing company at the leading edge of technology in most of the areas in which we work. The innovation, technology and creativity that goes into those products is fundamental to everything that we do in the company and therefore innovation and technology is one of the company's five values, something that we invest a lot of money in.

  577.  Five values?
  (Mr Weston) We have five principal values.

  578.  Could you tell us what they are please?
  (Mr Weston) The first one is customers, our highest priority. The second one is people, which are our greatest asset. The third one is performance, our key to winning. Then we have innovation and technology, our competitive edge, and the other one is partnerships, our key to the future.

  579.  And so, as you say, you have five bullet points in the company and research and development technology is one of those five. What proportion of your turnover do you invest in R&D and how do you justify that proportion to your shareholders?
  (Mr Weston) The numbers we publish in the annual report are only the elements that we actually fund from our own devices and only in fact include our research at what we would call the technology end of the spectrum. It does not include the money we spend on our own account for product development and nor does it include the amounts that we actually spend on the contracts from our customers in product development. I do not have a reliable number for the total inclusive one, although if you gave us a bit of time it might be quite interesting to dig that out because that is significantly more than tends to get reported in either the annual report or indeed things like the DTI score card in that respect. Trevor can give you the detailed numbers at the research end of the spectrum.