RESPONSE TO QUESTIONS FOLLOWING THE ORAL EVIDENCE SESSION

  1.  We have not had any particular problems with the European Patent Office except for some inconsistencies between the various language versions of the same patent. Many SMEs find their charges very high. In terms of improvements to the service, we would suggest that free access to patent searches via the WWW be available, as is the case with the US equivalent. Members of the Committee may wish to look at the IBM patent server web site (www.patents.ibm.com) to see what can be done.

  On a more general point, there would be an advantage if certain information services such as Dialog were made available to SMEs either free or subsidised.

  2.  The effective exploitation of IPR varies according to sector, with comparable performance in most parts of Europe. The pharmaceutical and life sciences sectors are very good, but the universities are generally poor compared with their US counterparts.

  3.  I do not believe that poor quality management (as a formal, documented, process) is of itself a limitation to growth in comparison with other factors presented in our submission. On the other hand, it is essential that SMEs adopt the quality standards of their marketplace set by larger companies if they are to succeed. Customers within a marketplace do not see smallness as an excuse for low quality. This is true for hardware and software as well as services—for example, an SME producing a "high end" CD player will have to achieve the standards of performance, reliability and documentation set by Sony.

  4.  I am unsure whether there is today a social stigma attached to corporate failure, but the City in general and venture capitalists in particular are unforgiving about earlier failures. This is much less the case where individuals (angels) are backing a venture.

  5.  EASDAQ will in principle improve the ability of high-growth companies to attract investment provided:

—  it keeps fees and bureaucracy in check;

—  class type actions do not become prevalent from disappointed investors;

—  it is well marketed internationally (as is NASDAQ).

  It will greatly benefit from some early successes!

  6.  I personally think that this is the flaw in Foresight.

  7.  A large proportion of business leaders do not have a technical background and may be risk-averse to organic technological development. Ideally, such people need personal exposure to technologically driven business opportunities and should participate in active debate about such opportunities. Because of the competitive problem, such debates would have to be done within a company environment and therefore we have to rely on a Foresight aware individual creating such a debate. Members will see the circularity of this argument.

  8.  I am unconvinced that tax credits of themselves would encourage research and development, given that R&D expense should fit into a comprehensive business case for investment. R&D costs tend to be a small proportion of total costs and the tax credit therefore even smaller. It is unlikely that any business model is so accurate as to rest on a tax credit variable. However, a tax credit would of course be a signal that R&D is a good thing to do!

BRIEF NOTES ON CLARIFICATION ISSUES

  1.  See organisational chart attached (Annex).

  2.  Within the overall staff employed by Generics, approximately 35 per cent are women. Of the scientific and engineering professional staff, 13 per cent are women which we believe to be higher than average given that this group is involved in our hardware and software development as well as in life sciences. For example, of the overall membership of the IEE, only six per cent are women.

  The recruitment and retention of women in technology-based posts is consistent with our mission and supported by our culture. We have created a working environment attractive to the highest quality people. This environment attracts people from many nationalities and different backgrounds; it is attractive to the highest calibre engineers, technologists and scientists whether male or female. Particular cultural aspects which contribute to recruitment and retention of women include:

—  the principles of meritocracy and equality which underpin our management structures and processes, providing a very positive and non-threatening environment without the hierarchical status symbols inherent in more traditional organisational cultures;

—  time flexibility which excludes regulation of start and finish times and includes 24-hour opening of our offices and laboratories, and geographical flexibility enabled by our extensive use of e-mail in the office and at home;

—  our clear commitment to helping working parents balance their commitments at work and outside of work, including availability of sabbatical leave, positive approach to family-related time-off requirements, and our early involvement in Opportunity Links, the pioneering Internet-based information service for parents.

  We are also committed to the ongoing development of all of our staff, as demonstrated by our work to achieve the Investors in People national standard for training and development. This is not only a business imperative but it is inherent in our culture. Career development extends to all employees and individuals have the freedom to develop their career and cultivate their technical know-how in the direction that suits them and their particular circumstances. We have found this to be an attractive approach for all of our employees and potential employees.

  3.  Three examples of Generics' contribution to public sector policy:

Proficiency Testing in the UK

  In 1989 the Community Bureau of Reference (DG XII) of the Commission of the European Communities initiated an assessment of proficiency testing schemes of member states. These proficiency schemes are programmes designed to analyse and compare the performance of standards laboratories. These laboratories provide testing for industry and government ranging from environmental monitoring, such as airborne asbestos fibre counting, to hospital clinical analyses. The proficiency schemes, as well as the participating laboratories, can be private or government sponsored.

  The programme at DG XII intended to identify and evaluate the various proficiency schemes on a state-by-state basis to allow comparisons to be made and eventually community-wide standards to be set. Generics was funded by the Commission to investigate the proficiency testing schemes in the UK. This work entailed identifying and classifying the schemes in operation. Before this investigation had begun there was no central directory or listing of schemes available. Once the schemes were identified, contact persons were located and interviewed according to a standard proforma. The results of these interviews and other available information were assessed and compiled for the Commission. Generics was able to interpret and consolidate information pertaining to a wide variety of technical disciplines, a process which was facilitated by Generics' interdisciplinary approach. The resulting report set a new standard for investigations of this type for DG XII, and was widely circulated by that organisation.

Priority Setting for the National Measurement System

  Scientific Generics has worked with the National Measurement System Policy Unit (NMSPU) of the UK's Department of Trade and Industry to set up a robust, reasonably quantitative, dynamic, priority-setting system. The NMSPU has responsibility for supporting the measurement infrastructure of UK industry as outlined in a government White Paper entitled Measuring up to the Competition, July 1989. Seven policy areas were identified, so that the national measurement system must: enable innovation in UK industry; improve quality in UK industry; inform the content, or enable implementation, of UK or EC regulation; inform public policy; reach a large number of users; support other, dependent, measurement work.

  Historically, development programmes were proposed and managed by government laboratories. After the introduction of the client/supplier principle, and the status change of the laboratories to agencies, management responsibility was passed to the NMSPU, which thereby acquired some 15 development programmes of about 10 projects each. The NMSPU has to negotiate its spending budget, against other spending departments, within the overall DTI budget (itself subject to change), and manage the programmes within that budget. Targets have been set for a proportion of development work to be allotted by public tender.

  To help manage this complex process, the system set up by Scientific Generics is based upon a detailed cost/benefit analysis, at project level, taking into account a variety of inputs including the policy guidelines, external expert judgement and advice, and industrial sector economic weightings. Generics demonstrated that, despite the complex techno-economic environment in which the NMS operates, a suitable cost/benefit indicator can be derived from three principal components:

—  an assessment of benefits, known as the policy score;

—  an economic importance indicator;

—  an estimate of expected costs.

  The methodology was devised and tested, standard forms and software prepared and, for each project, briefing papers and economic importance matrices were produced. For the future, most programmes are expected to be refinements of existing programmes. In particular, the potential exists for optimising policy weightings to maximise the cost/benefit indicators.

  This work is now being updated and reviewed after an eight-year gap in a new project for the DTI.

Mesopic Lights Standards

  We have also recently completed, for the DTI's National Measurement System Policy Unit, an innovative piece of research into visual performance where no standard previously existed. One objective was to provide the Standards sector with a measurement standard that is relevant to modern measurement issues so as to enable innovation in products and systems operating at low light levels. For example, taking account of an increase in human response time as light levels fall.

3 July 1998