INTRODUCTION

  1.  GEC ALSTHOM Ltd is the UK operation of the GEC ALSTHOM group, which develops, designs, and manufactures advanced equipment and systems for the electricity supply and rail transport industries. World-wide the group employs (1996-97) some 94,000 people and has a turnover of around £7.5 billion. In the UK it has about 21,000 employees, a turnover of £1.5 billion, and undertakes at specialist research centres in Stafford, Lincoln and Whetstone, an important part of the group's total worldwide R&D activity of some £300 million annually. In the last ten years its markets have been transformed due to progressive introduction of competition amongst its previously national monopoly customers. It now competes internationally against a small number of powerful multinational competitors on the basis of product performance, cost, and commercial offer.

SUMMARY

  We present below our comments on the specific points the Committee is addressing. In general our industry does not depend upon Government executed research as a source of innovation but does use the engineering science base it supports. Schemes for collaborative research are of value, but the Foresight Programme has been less successful than we hoped. Mechanisms to undertake large-scale demonstration of innovative technology have become more scarce, and their absence hinders developments.

COMMENTS

  1.  There is effectively no application of Government-funded research within our products.

  2.  Government laboratories have, and continue to, provide certain basic "engineering infrastructure" information to UK industry such as data for standards but do not supply any of the essential technical information used in the design of our products. Such support is, of course, essential to any developed manufacturing economy.

  3.  Independent research and technology organisations are not sources of product technology for us, and we make virtually no use of their services. This should not be taken as a criticism of their individual capabilities, which may well be of more use to smaller companies. As a large enterprise however we are able to maintain internal expertise in those areas of importance to our business.

  4.  We have and do take part in certain schemes operated by the Government whose aim is to encourage collaborative applied research. Our reasons for so doing include collaboration with specialist organisations with complementary expertise to our own, the sharing of risk in medium and long-term developments of uncertain technical outcome, and the added-value of working with others who can bring different perspectives to the planning and progress of specific programmes.

  5.  We feel nevertheless that certain aspects of the management of such Government schemes could be improved. The procedures involved in forming consortia, preparing and submitting proposals, and responding to the resultant queries and criticisms are very resource-consuming, and usually involve an elapsed time that we feel is excessive. An improvement in this aspect would be welcomed by prospective participants and potentially increase the take up of the schemes, in a world in which lead times have shortened dramatically in recent years.

  6.  In conjunction with these comments we must add that for our industrial sector, which is well-established and mature, we perceive that R&D funding from Government is less available than in other countries. As a specific example a consortium of ourselves and three other major UK companies were negotiating with DTI for support of developments in high-temperature superconducting devices over a period of eighteen months. Eventually DTI decided that funding was not available for this subject. Consequently, the work is now supported and undertaken elsewhere in countries in Europe.

  7.  Intellectual property rights (IPR) are increasing in importance to our company as a result of the growth in international competition. When our products were tailored to national monopolies they were intimately involved in their design to ensure they met local needs, and overseas suppliers were not considered. Consequently IPR were rarely a consideration. That situation has now changed so the need to avoid IPR infringement is paramount and the ability to secure IPR ownership through various instruments such as patents is a prime factor in the development process.

  8.  The Foresight Programme has had very limited impact on either deciding or communicating innovation priorities. For those directly involved in the Panels or working groups, which includes employees of our company, there have been some gains in influencing conclusions or in extending our networks of contacts. It is difficult to identify any area in which we have gained information or insight as a result of the process however. For industry at large in the UK who have not been personally involved in the bodies created it appears to us that Foresight has failed to have any effect upon their operation or decisions.

  9.  It may be that in its present form the Foresight Programme is too large in scope, and attempts to respond to too many interest groups, to define any genuinely focused strategy for innovation. As a means of debate it has the real involvement of too few people to achieve more than could be done by seeking views of expert individuals or companies. It may be helpful to consider alternative approaches such as that followed in the USA where there is focus on topics considered politically to be of national strategic importance. The Presidential task force on Energy consulted hundreds of experts to produce a genuinely authoritative report, published in November 1997, that will guide specific innovation actions.

  10.  The Engineering and Physical Sciences Research Council is perceived to have a prime responsibility to maintain the scientific base within the Universities, and it is with the latter that we have direct contact. Technology transfer is effected through research contracts placed directly with Universities (typically around £1 million each year), which feed directly into the design data, rules, and methodologies that are critical to the design of our products. We include in this Teaching Company Schemes and CASE awards which we find highly effective mechanisms. There are also consultancy arrangements with specific academic experts (usually as part of such contracts) which is a broader form of technology transfer, and finally the recruitment of typically twenty-five people each year following postgraduate education enabled by EPSRC. The latter is the most effective transfer for us, providing personnel who bring with them awareness of the most current engineering science.

  11.  Our products are typically of large scale and designed to work as part of a national infrastructure. In their development a critical feature is demonstration of performance which can often be done only "in the field" and at a large scale. With the disappearance of monopoly operators who shared responsibility for innovation we increasingly lack in the UK the facilities to undertake these demonstrations, which can inhibit the ability to take innovative developments through to the stage of international marketing. We believe that the UK, nationally, is increasingly at a competitive disadvantage internationally in this respect.

10 March 1998