WEDNESDAY 16 DECEMBER 1998

MR ROBERT FOSTER, MR PETER BUNN and DR ALISTAIR KEDDIE

  860.  Which department?
  (Dr Keddie) I cannot tell you here and now.
  (Mr Foster) We will have to write to you on that.
  (Dr Keddie) We will have to write to you on that.

  861.  Presumably it is with the Treasury as well?
  (Dr Keddie) Yes it will be.

  862.  Moving on now, in your written evidence to us you talked about there being a culture and a language gap between academia and industry and you suggested that there should be translators to act as go-betweens. How do you see these translators functioning and what is your Department or the DTI in general doing to encourage the development of these translators? Is this idea of translators going to run?
  (Mr Foster) I think in a sense I have already answered with some of the ingredients of that. I would go back to the work which has been announced and we have in hand on university/industry interaction, the Reach Out Fund, by actually recognising that there is work that is not about pure scientific research or purely about training but recognising it is important to have people who are working from the university side in industry and having a network of higher education institutes around the country doing that will encourage people who will help to bridge that gap. Secondly, on the Foresight activity itself—and I hear the points that have been made—there are criticisms of it but nevertheless it is again a very important way of bridging that gap. I was personally involved, for example, in the work being done on the aerospace and defence side where there are a range of both industrialists, people from the Ministry of Defence services and universities. They would obviously like to see lots more money from government put into that. That has not happened but what has happened is the development of networks between the academic and the industry side. So that is another important way that networks will be encouraged. I mentioned other specifics like Faradays.

  863.  I think we are going to come back on to Faradays later. If I can direct my final quick question straight to Dr Keddie. We understand in your unit, the Innovation Unit, there has been a project which is—and I will quote something now which does make sense but it is hardly approved by the Plain English Society—"to identify the generic characteristics of successful interaction between universities and industry." When you read it a second time it makes perfect sense although the first time it looks a bit glossy. Can you tell us what that project revealed?
  (Dr Keddie) We will obviously have to get the language better because it should have made sense the first time round not at the second time of reading. We have in fact completed the first phase of that project and we can either send you with the letter a copy of that report or leave it with you this evening. Essentially what we did there, very briefly, I talked to something like 30 or 40 departments within different universities within the United Kingdom who had clearly demonstrably very good working interactions with business to try and identify what, for them as academics, worked in this case, why did it work and so on. Contrary to certainly quite a lot of the statements that are around that to be successful to work with business you have got to become a business person yourself and you can no longer be an academic and so on, it simply hits that on the head as a concept. There were very successful interactions carried out with academics who retained their academic values and their interests so there is no question of them having to become different sorts of people. What they did have to do, however, was to learn some different skills, organise their lives somewhat differently on occasions and be more flexible in the way they interacted with industry. But if you got those few things right then the research was enriched, the teaching was enriched and the academics felt they got a lot more kudos from the fact they were working on academically satisfying but real problems so far as the economy was concerned, so very, very positive. We are now following that up by beginning to talk to something like 30 or 40 companies who equally believe they have had very successful relationships with universities and again trying to understand better from within the company why those inter-actions have worked well.

  864.  Are you a golfer, Dr Keddie?
  (Dr Keddie) No I am not. I have played but I am not a golfer!

  865.  If you were a golfer you would probably find, as I do, that I spend a long time analysing all my rubbish shots and no time at all analysing my good shots, which of course are God-given and I have no right to do. Do you think in your Innovation Unit you spend enough time analysing what goes right in innovation rather than spending too much time on what goes wrong?
  (Dr Keddie) We get accused, that is rather too strong a word, of spending too much time on success. We probably spend 70 per cent of our time looking at what goes right and sometimes people tell us we would learn more if we did it the other way round.

  Chairman: Mrs Curtis-Thomas?

  866.  We have taken evidence during the course of this inquiry from a number of organisations which have an interest in the aerospace industry. Most of them have commented on the benefits of the CARAD programme. It has been hailed as a success as a government scheme but what future does CARAD have in the DTI programme for the support of innovation?
  (Mr Foster) Obviously the Secretary of State has commented on that. I believe he did this afternoon. His response is that he has had a lot of representations on the future of CARAD from the industry and it is something which he is still considering what its long-term future is.

  867.  Could I just ask a supplementary? In considering its long-term future what are the parameters that he is taking into account in coming to a decision about whether or not it remains a viable programme?
  (Mr Foster) Obviously there are factors that affect that. One is to what extent is it expenditure which it might be argued should be undertaken anyhow by leading companies in the field? To what extent is it creating additional research over and above what could be done otherwise? Another factor is to what extent is it significant in terms of the total expenditure which takes place? The level of CARAD expenditure is about £20 or £22 million which is a pretty low figure in terms of R&D expenditure by, say, the leading two UK aerospace companies. One obvious question is is that de minimus or is it really having a substantive effect?

  868.  The University Challenge Fund has been heralded as a big initiative. Is the £50 million a one-off or have you got other plans up your sleeve for getting more money from other organisations? Or have you got other initiatives in that field as well, because it is very important at the level of bringing the universities and industry together? What plans have you got? Do you think £50 million is enough? No, but how are you going to increase that?
  (Mr Foster) I think the answer to that one is that money is never enough but one has to start somewhere. This is a substantive sum. First bids and so forth are currently being looked at and there will be an announcement in the spring. One will then have to see how effective it is. If a scheme is highly effective and it really does do all the things which people are hoping it will in terms of exploiting what is in the university, encouraging trialing of new ideas coming through, and if it is massively successful then people will look at it and say: "Perhaps it is worth putting more into it", but at this stage that is a substantive level and I think we will have to see how effective it is.

  869.  Let us follow that up. You talked earlier about the concept of failure, so you are not going to distinguish between failure and success at the early stages of this, are you?
  (Mr Foster) In evaluating it, there will be an announcement in the spring of who is successful and it always takes some time—I do not know how long, a year—like any new scheme to see whether or not this is clearly working and bringing about economic benefit. If it is, then I am sure people will want to expand it.

  870.  But some will move quickly and get there and succeed and others will not.
  (Mr Foster) It depends a lot on the field, does it not? There are some areas where you can see very fast exploitation, the software sector for example. If it is medical, there might be two years of medical trialing before you can even begin, and biotechnology even longer.

  871.  But in principle you would not rule out failure after two years, if they had not come up with anything? You would let them be serial trials, would you?
  (Mr Foster) It must depend on the individual sector in terms of time of exploitation. Two years can be quite a short timescale in relation to some technology.

  872.  Yes, but it is your philosophy I am interested in. With the old research councils they would give you money and if you did not produce four papers or something within three years, that was it. It is a different philosophy now, is it not, you are "a" la California", and you are going to say: "Okay, don't worry if you fail, try again next time." Is that going to be part of your culture?
  (Mr Foster) The point is, in any scheme there are clear objectives, and in terms of evaluation of those overall there has to be clearly seen economic benefit, and some will fail. There is nothing wrong with that, some will fail, but overall there will need to be seen that there was a good return for that £50 million, of which £20 million is government money.

  873.  Let us move to the Institutes of Enterprise. Would you like to say something about the development of those and how you see those progressing? Where have they got to at this stage?
  (Mr Foster) We are still at a pretty early stage on that. As I mentioned, the announcement is that there will be six to eight of these and so obviously all round the country people are lining up to come in and there will be a great deluge of people bidding, but the intention this time is really to try and get half a dozen top level role models, more on the MIT style.

  874.  How will the DTI function alongside these institutes? Will you have a hands-on approach with them or let them get on with it? Will you be monitoring their work?
  (Mr Foster) Our normal way is to set pretty clear guidelines in terms of what we expect from the objectives of these, and then they will get on with it knowing they are going to be monitored.

  875.   By you? By the DTI?
  (Mr Foster) We would be involved in that.

  876.  Who is going to monitor success?
  (Mr Foster) We have evaluation teams whose job is to evaluate.

  877.  Are those teams within your Department or do you incorporate academics from outside, industrialists from other sectors?
  (Mr Foster) We evaluate through all sorts of routes. We have our own team and we also go out and ask consultants to do that on our behalf depending on the particular circumstances. It depends if we have the expertise.

  878.  But you will be setting those teams up?
  (Mr Foster) We would be involved in that.

  879.  So the DTI will be functioning through those teams?
  (Mr Foster) That is correct.