1.  INTRODUCTION

  Oxford Instruments is a publicly quoted high technology company with origins in the University of Oxford. Sales of ca. £150 million per annum in instrumentation for healthcare, industry and research are supported by an R&D budget in excess of £10 million per annum net of additional research contracts. Exports and overseas sales amount to 85 per cent of revenues and the company maintains strong links to the science bases in the UK, the USA, Europe and East Asia (particularly Japan and Singapore).

2.  SUMMARY

  Oxford Instruments plc wishes to draw to the attention of the Committee the central importance to our evolution as a company of fundamental scientific research carried out in a number of UK universities and Government Laboratories. Government schemes to promote collaboration between industry and the science base have also played a critical role in a number of our major development programmes. Looking to the future, we are optimistic regarding the provision of finance for new high technology companies provided that attention is given to the seedcorn/incubator sector. Overall, we are also strong supporters of the Technology Foresight Programme. We remain concerned, however, that the correct balance be maintained between the current emphasis on the industrial relevance of research and the pursuit of new knowledge which is not perceived to be of immediate application. World class excellence in Science and Engineering has been a central feature in our national culture for more than two centuries and we urge that fundamental research should continue to be accorded the highest priority as we move towards the new Millennium.

3.  THE INDUSTRIAL APPLICATION OF GOVERNMENT FUNDED RESEARCH

  Virtually all the major technological breakthroughs in the development of Oxford Instruments have arisen from work originally carried out in the Government funded Science Base. Superconducting magnets, developed in the Clarendon Laboratory at Oxford University formed the early core of the business; nuclear magnetic resonance developments took place in conjunction with the Biochemistry Department at Oxford (under Sir Rex Richards); magnets for the MRI scanners were developed in collaboration with Sir Peter Mansfield's group at Nottingham (and others elsewhere). This tradition continues today in fields as diverse as the development of high field magnets, "down hole" NMR for oil exploration, gravity mapping, nanotechnology and high temperature superconductivity. (Also see 4 below).

4.  GOVERNMENT LABORATORIES

  In addition to the work cited above, a number of other developments which took place in partnership with Government Laboratories are worth noting, including:

(a)  The Helium Dilution Refrigerator

  Technology transferred to the company from AERE Harwell. Almost 30 years on, this product still enjoys (in its modern variants) a dominant market share in low temperature applications in materials and condensed matter physics.

(b)  Silicon Detectors for X-ray Analysis

  Also transferred from AERE Harwell to Link Systems Ltd—now, following its acquisition, the £20 million Microanalysis division of Oxford Instruments. The products are deployed in areas such as forensic science, semiconductor manufacturing and aerospace.

(c)  The "Helios" Synchrotron

  Developed in conjunction with the Daresbury Laboratory, this $25 million device may revolutionise the semiconductor chip industry early in the next millennium. Systems have already been sold to IBM in the USA and the NSTB in Singapore.

  We would like to make it clear that the businesses which have been built on the basis of the technologies developed in these Government (or former Government) Laboratories would not exist today without the knowledge generated in those laboratories and in a number of cases the people transferred to the industrial sector.

5.  GOVERNMENT COLLABORATIVE SCHEMES

  The company is an enthusiastic supporter of the Government's schemes designed to promote collaboration between the science base and industry.

  Examples involving Oxford Instruments include:

(a)  "Link"

  The 750 MHz NMR magnet developed with Oxford University and ICI; neutron radiography systems developed with Rolls Royce and Birmingham University.

(b)  Foresight Challenge

  The company, in partnership with EEV Ltd, Imperial College, London and Manchester Universities and PPARC is engaged in a major programme to develop new X-ray detectors for research, industrial analysis and medical applications.

(c)  Teaching Company Scheme

  A number of Teaching Company collaborations have been established within the operating business units.

(d)  Support for Innovation (SFI)

  The Helios synchrotron project (vi) was originally started with a £1 million SFI grant from the DTi—to which Oxford Instruments added £ many millions in further development expenditure, a clear example of "additionality".

6.  FINANCIAL SUPPORT

  In its earliest days, Oxford Instruments survived in the manner of many young SME's via bank loans and capital from the founders and their families. Financial stability, however, arrived in the early 1970's when3 i's (then ICFC) brought in both new equity funding and encouragement to develop professional management. This investment was a turning point in Oxford's development.

  Today, there are many more organisations within the investment banking and venture capital industries which can fulfil this role and it is our belief that ample funding is usually available for most young companies in high technology. If there is a gap, it may well be in the incubator/seedcorn area (cf Sir Martin Wood's activities at "The Oxford Trust").

  Where a challenge does exist, we believe, is in the creation of a climate which encourages potential entrepreneurs, particularly in our universities, to "take the plunge" and establish their own start up company. Early results from a renewed campaign at Isis Innovation Ltd, Oxford University's IPR company, clearly demonstrate the latent enthusiasm for "spin-out" activities when finance, encouragement and professional advice are readily on offer.

  More mature high technology companies will inevitably face the further challenges which lie ahead in the UK as a publicly quoted company. Much is made of the conflict perceived between the financial markets and such listed companies, little of which we would agree with ("you can't buck the market"). Nevertheless, it is interesting to note the relative lack of success of the London Market compared with NASDAQ in the USA in promoting high technology stocks.

7.  "FORESIGHT"

  Oxford Instruments is a keen supporter of the concept of "Foresight" and of the current programme. We see the main benefits as the extensive industrial/academic network which has been created, the sharing of values which has resulted from this networking, and the mutual respect and understanding between industry and the science base which has been enhanced by Foresight activities.

  If there is a danger, we see it as what some would regard as the move towards "directed" research, perhaps at the expense of that which is often referred to as "curiosity driven". MRI, for example, is the product of good fundamental research, driven initially by a quest for new knowledge. Thereafter, awareness of the potential opportunity and serendipity played their parts—as well as good planning and "focus" when the opportunity was clearly identified.

  We are anxious that in seeking to optimise the industrial applications of research in general we do not compromise the historic propensity of the UK's national science base for world class fundamental scientific discovery. Out of these discoveries, in both the life and the physical sciences, come the opportunities for industrial applications leading to wealth creation.

8.  EPSRC

  As the Chairman of Oxford Instruments is also Chairman of the Particle Physics and Astronomy Research Council, it would seem inappropriate for us to comment on the EPSRC. We would, however, wish to stress the central importance of the EPSRC's role and that we have very fruitful relationships with a number of university departments which in turn are funded by EPSRC.

9.  INTELLECTUAL PROPERTY AND PREVIOUS RECOMMENDATIONS

  Finally, for reasons of brevity, we do not wish to comment at this time on either the issue of Intellectual Property or on the implementation the previous recommendations of the Science and Technology Committee.

11 March 1998