1.  INTRODUCTION

  1.1 Reinshaw plc was formed 25 years ago, and is now a world wide company employing about 1,500 people, most of them in Gloucestershire. Our main product line is touch trigger probes for the machine tool industry. This product was invented by our Chairman at Rolls Royce to solve a problem with Concorde's engines. Our Deputy Chairman left Rolls Royce to exploit the idea, and now the company has become the World Leader in probes. The company has a turnover approaching £100 million per annum.

  1.2  Our involvement with the LINK scheme has been mainly to develop new product lines for the company, which are then marketed through our overseas subsidiaries and agents.

2.  SUMMARY

  2.1  My personal experience of the LINK schemes are that they are very successful. However, there are a few problems associated with the submission process, and some minor ones in running the programmes, but the benefits, in my view, far outweigh the problems. However, the areas where improvement should be made are the publishing of the assessment criteria before proposals are submitted, and the feedback on rejected proposals.

3.  LEARNT ABOUT LINK

  3.1  Renishaw learnt about the Link schemes through the EPSRC contacts of one of our Managing Directors—Professor David Pitt.

3.1  Reasons for Participating

  3.1.1  The initial reasons for participating in our first LINK scheme were:

(i)  For our prime UK optical component supplier to look into manufacturing methods so that their optical components could be manufactured at a suitable price, so that the overall project would be commercially viable.

(ii)  To allow Renishaw Transducer Systems Ltd, as we were known at the time, to employ a larger R&D department then our turnover permitted, thus allowing for greater cross-fertilisation of ideas.

(iii)  To further develop ideas which we had been jointly considering with Universities and our optical supplier.

  Since our initial project Renishaw has participated in other LINK projects. Our main motives for these schemes have been:

(i)  Get the Universities to take their ideas further than academic publications, and verify their processes in an academic environment.

(ii)  To further develop the concepts which we had devised by the University.

(iii)  Do the technology transfer and look into the production and commercial viability of the project.

(iv)  To introduce new products sooner, because the LINK schemes allow us to employ more people in the R&D section.

3.2  How easy or otherwise we found it in starting a LINK scheme

  3.2.1  Initially, we found the process of achieving funding for a project comparatively easy. However, since then the vetting procedure for LINK schemes seems to be more middle management orientated. For example the Gantt chart needs to demonstrably show transfer of ideas and links between partners. This in theory demonstrates on paper that the partners can and will be communicating with each other. In practice whether the partners actually talk to each other is not controlled by the Gantt chart but upon the aims of the individual institutions and personnel involved. I now have the impression that too much emphasis is now placed on middle management procedures, and not enough on the viability of the concept and whether the consortium is suitable for the project. (This criticism applies even more to the EPSRC, where I have heard too many academics say "It's a waste of time applying for a grant unless it has already been done in the USA").

  3.2.2  My experience of LINK schemes is that I have more problems from the contracted coordinator rather than from DTI personnel. On several occasions I needed clarification on a particular point and the advisor was misleading, whereas the DTI employees were trying to be helpful within their permitted remit. I have felt that from most of the contracted coordinators they were more interested in obtaining bids before the committee. Whereas the correct advice should have been not to submit, because the scheme did not fulfil the committee's ground rules. The obvious question to ask is why does the coordinator need to be someone from outside the DTI? Given a stranger to discuss our proposals, I am happier with a civil servant than an outside contractor, because the civil servant is well trained in confidentiality. With an outsider, we have to check their industrial background, to find out if there may be conflicts of interest between their new role, and their old industrial contacts. All this takes time and human resources.

  3.2.3  One of the ground rules which some LINK scheme committees have adopted is that one must have an end user as a partner. This has blocked Renishaw in submitting some proposals for two reasons:

(i)  With respect to some projects all our potential customers are overseas (non-European in one case), so by definition a successful exporting company could not benefit from the LINK scheme in that instance.

(ii)  With respect to our main market place, we are the worldwide main supplier, thus it is unfair for us to involve a UK customer in our product development, to the detriment of other UK and worldwide customers, by giving them an unfair advantage over our other customers.

  3.2.4  Thus what appears to be a very reasonable suggestion for ensuring the success of a project, actually prevents LINK scheme partnerships from forming.

  3.2.5  Yet another problem we have with LINK schemes is how open we can be with some of our ideas before the committees. In theory they are bound by confidentiality, but, in practice, we can not rely on it.

  3.2.6  The question about who owns IPR is always a tricky one. With potential industrial partners, Renishaw has always taken the view that the partners should be vertically linked, not horizontally, ie one partner is the component supplier, another the instrument builder, and perhaps an end user. It is possible to have more than one component supplier providing they are supplying radically different items. It is also possible to have more than one end user, but they must come from different market places. The problem with the latter is that it can defocus the project. Thus with IPR negotiations Renishaw has not had problems with the industrial partners. This is not true with the academic partners. With a couple of institutions they wanted their royalties regardless. Our companies' view on patents has been: we would only be prepared to pay royalties on commercially significant patents. We have adopted this approach for two reasons:

(i)  It would make it financially worthwhile for the academic institution to pay for an accountant to negotiate the royalties.

(ii)  It only then makes sense to commercially defend a patent through the courts (typical figure—$4 million in the USA). If we are defending the patent then we would expect the academic institution to pay their share of the costs, because if the patent suit fails we would stop paying royalties. Why should Renishaw pay royalties on some IPR which the courts have decided is either in the public domain or belongs to someone else?

  3.2.7  With some academic institutions it has been a hard struggle to convince academic commercial negotiators that it is unrealistic to adopt the approach that Renishaw would pay royalties regardless.

  3.2.8  I now have the feeling that it has become considerably easier to negotiate with them, as their demands have become more realistic as they have gained experience.

3.3  Assessment criteria

  3.3.1  The one area which needs improvement in the submission proposal phase is the inclusion in the guide lines for submission clear statements by which proposals will be assessed—the assessment criteria. This will enable me to submit the proposal in a manner which can then be clearly judged against their criteria, and, when the proposal has been rejected, it would then be easy to obtain clear feedback why the proposal was rejected.

  3.3.2  It would be helpful if there was a clear indication of the expected level of funding for a proposal. At the present moment this is achieved by having a long conversation with the DTI representative, and interpreting the answer. After all, the scheme has been running sufficiently long now, the coordinator should be able to write down the bands without too much difficulty.

  3.3.3  During the assessment procedure I have definitely been left with the impression that getting the middle management procedures correct to be more important than the concept. I wonder if this was because the committees have had projects fail because the consortium were not communicating between partners.

3.4  Problems with running a LINK scheme

  3.4.1  To ensure communications between partners, project monitors are now requesting three monthly management meetings. At the start of the project this may be a sensible idea, but after the first six months it is not. Meetings do not get the partners to communicate. In practice, I have seen them hinder communications, with partners taking the attitude "we will see them in a month, it can wait till then", rather than fax or e-mail the problem. Holding meetings does not ensure that the partners will communicate with each other, although it may help. The project is failing if it takes project management meetings to get the partners to talk to each other.

  3.4.2  One of our in house rules with respect to LINK, or any other schemes, including European, is that the number of partners within the project should be small. The larger the consortium, the more difficult they are to manage, ensure good communication between partners, etc and more likely that the personal agenda of a partner will be to obstruct the project. This will not necessarily be done deliberately, but it will be the consequence of their actions. (When we broke this rule and joined a large European scheme we saw this happen, and hence that project failed).

4.  SUCCESS OF LINK SCHEMES

  3.4.1  Generally our involvement with LINK schemes have been commercially successful in terms of increased turnover and profitability for our company, and for UK limited in our ability to market such products worldwide. The tax we have already paid on those products developed under our initial LINK schemes has more than repaid the Government's contribution to the whole project. This comment does not include the tax paid by our partners. Also we have met our short term objectives: increased personnel in the R&D section, and the speeding up of products to market.

  3.4.2  Recently Renishaw has become involved in some more LINK schemes. However, commercial viability of these projects will take longer to establish, namely because these projects are outside our traditional market place and the additional procedures required (one project is associated with the medical industry and cancer detection). One of the advantages of LINK schemes is that it does permit a company like ourselves to explore different markets and to expand into different product areas.

  3.4.3  We have had one unsuccessful LINK project, but that was when our commercial partner's corporate body decided to close down their corporate UK research facility before they had completed their part of their R&D programme. This meant that they were then unable to supply the components we required for our commercial exploitation of the project.

  3.4.4  Thus Renishaw has met its LINK objectives, both commercially and in personnel terms: being able to recruit people sooner, give them the experience of working with academics, and training them so that they get the relevant information from academic partners so that the company's commercial objectives can be met. The LINK scheme has also met our objectives in that by having a non rigorous commercial relationship with our suppliers, our understanding of each other's requirements has radically improved.

4.  THE IMPACT LINK HAS HAD ON THE COMPANY

  4.1  The major benefit of the LINK schemes on Renishaw are:

(i)  It has significantly helped Renishaw with respect to totally new product lines which have become significant for the company.

(ii)  It has helped Renishaw develop a product which was completely outside Renishaw's traditional market place, and has now become a world leader in its field.

(iii)  It has improved Renishaw's contacts with the DTI. Not only does a Managing Director know people within the DTI, but the Engineers as well.

(iv)  Indirectly, LINK schemes have improved our relationship with NPL.

5.  BARRIERS

  5.1  Renishaw would like to have formed partnerships with NPL and DERA under the LINK scheme, but with the Government treating them financially as if they were academic partners makes this concept for Renishaw more or less a financial non-starter. Their costs are high compared to Universities, and on speculative projects it is hard enough to persuade the board that a project is worthwhile as it is, even though the LINK scheme has a proven track record within the company.

  5.2  The barrier to LINK schemes, which I fortunately have not met yet, is when I know that my key commercial rival sits on the committee. Under those circumstances, I would not submit a bid.

6.  OVERALL ASSESSMENT

  6.1  I think that the LINK scheme has been successful, both for Renishaw and for other UK companies. The scheme would benefit from minor rule changes, but not from a radical reform. The LINK scheme has made a considerable progress in making academics in this country more commercially aware of the needs of UK Ltd, and that UK Ltd has to pay its way. I still think this task is still not yet complete.

29 January 1999