Table Of Content_ HOUSE OF LORDS SESSION 1993-94
SELECT COMMITTEE ON
SCIENCE AND TECHNOLOGY
INTERNATIONAL INVESTMENT
IN UK SCIENCE
EVIDENCE
Ordered to be printed 31st October 1994
LONDON: HMSO
£27.30 net
HL Paper 36-II
HOUSE OF LORDS SESSION 1993-94
SELECT COMMITTEE ON
SCIENCE AND TECHNOLOGY
INTERNATIONAL INVESTMENT
IN UK SCIENCE
EVIDENCE
Ordered to be printed 31st October 1994
LONDON: HMSO
£27.30 net
INFORMATION SERVICE §
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CONTENTS
Page
BINA ENS1 S ANE DD) 29 Ol SEE RA ae OR ERR AN OS oC. SeT a eRe PT Vv
ORAL EVIDENCE
Imperial College of Science, Technology and Medicine 23 February 1994 ............. 1
Oxrondel/niversitysis-Hebrary 1994... ssteeadeei diy. of. Ce. RIE WE. Be Bs 1
Department of Trade and Industry 23 February 1994 ......c.ec.e c.ece. e.e e .ee e 25
Dprandrew Webster i16 Marchit99447 se ieieents ite aa bots SRP pageant1 36
Association of the British Pharmaceutical Industry 23 March 1994 .................4. 48
Loughborough University of Technology and UMIST 30 March 1994................. 63
British Council 30 March 1994........ 1 yee ca alg erate yer OdS PR ae ae AeD a PERE my A Bs,
Committee of Vice-Chancellors and Principals 20 April 1994 ................-00005 89
Natural Environment Research Council 20 April 1994 ...0..0.... e.ee. eee. ee e 98
Biotechnology and Biological Sciences Research Council 27 April 1994 .............. 107
vader Bic nsman 025) Nao eo adil aia ocn,innaynpadecs spud .puheumpPeecaceiti Cog BRM OEE 119
Committee of Scottish Higher Education Principals 25 May 1994 ................4.: 131
Royal Academy of Engineering 8 June 1994 ... 0.0... cece cee cece ences 145
MAMIE OCECIV SIUC VO9 4 ea grtit contc ers, oreor ayo, »,o le,o ,a ye,0 -%,%, 22,0,+ ,%,6 .40, QETLEICT © Se-IRAS B 159
POCINEIT [AlCCOMM gic, JUNC olS e GeaeBI L. odies Sohs ech oie Sok ou) afer a 6.6 ecg sitioye one ole g eigs 168
IBM (UK) Laboratories Ltd and Olivetti Research Centre Ltd 22 June 1994 ........... 181
WRITTEN EVIDENCE
Government Departments
Poraistex’ot Agriculture, Fishenes and FOOd 2x. i xtispaver.Crerone-sajnoarosnoarsvnsevottaoyrs eiMnGe BsO N 187
Deparment. for Education -gcssiet nedicacianehope Majareh set enn, Aes eal Ee aa OM LON et BG 188
EATEN Hane EMV ONIN CHE wats oe ain while id Fle chelate ache dis saw ob © 05% 0G oralb he 189
One ean C OlNOUCWaN CIELICC Ney Wile Wiis ott las cle Nd siege a lacs ajels ini 'ss ch be vise hos 189
Ae eer 6c) Alg Por Rage is PME LS rae PARA QT Onn Sere ee ee eRo re ee 193
PMRU RALO NB RC MNOTI okc anes onisge ds ecede eso ps e« Peons vl n Youc sc oceapenen onenouayancass exepeis MOI ME ORES. SeldsPAUES 80 U 197
Office of Science and Technology «......0..0D.E<Q s0RRsRvIOeORs cL.iJ oebca.e ineolnwesr . 199
Bag ath th| EAC AT SHOU SUNY ech i coadvnssnnes <b- mnidennsdenn nopc hakras ocaseshiteess ovens, MAROLNODRES NCQ. 199
DIOP AGMCMUOR T CANSPOKE, 96 5; coon cele citrate dad veasscccncvesoss LQOMMMIAPSE 10 WNZIIURL AQUOS 200
RS RPEe ee ee esc cps vn vene texensuaverot-versvoesncenqeracOgGsMoMhya teErRatMaAr,on cTraRnIeS 200
Research Councils
Biotechnology and Biological Sciences Research Council .....0..00 .cec.e e.e e.e ee es 202
er tse SATAN ee ee a Vie bw ew cleo e ele ba ewe 203
iv
Natural Environment. Research Council! . oo)h3.3 00 ou a Ses os «wo 0 ee eet es a aos 205
Science and Engineering Research Council... 2.2.2.0... cece cece ee eee eee eee ee eens 208
Higher Education Funding Councils
Higher Education Funding Council for England ...........e.ee. ee.e. ee .ee. e-e e ns 212
Scottish Higher Education Funding Council... 2.22.5. 0 0.20 e cence eee tease eee Z12
Higher Education Funding Council for Wales ....00. .ce ee.e ee.e ce.ce e.ee .eee e ens yA)
Regional Development Organisations
Invest in Britain Bureau’ oii. ene sak ods og oie ce ee ee ee ae oe 215
Scottish Enterprise! SS een ea ois oe oan ater ee tees eee ea WY
Welsh Development Agency. . ins 500 ce nce ie spe aes REND Ae See ale ROOK ccle 220
Industrial Development Board for Northern Ireland .....0.... .eee. ee.e e.e e e.e ee ns 221
Companies
Bayer plee. 0s) comets ers os eae vajei'aln is.a ly.# Become) Siebel 5g olc lei ae Aa ce 224
British Aerospace’ ple}.io i. 1.2. sat sess po tise ea eee een ete. oto nes ae ee 224
British Gas)... iors hata vice rene EROS DO Lee ES ee 225
British Technology Group tds he i eel iia ade ae rete ae aCe he As res ee 2nh
Ciba-Geigy/plera. 22) ccf braisis tein wlahalbvane tom Lie «10 atera tot en aera ik nes aks ee el ee ne ee 229
Elf;Petroleum UK. ple ssc apd. Of. Tends > hash: eatin’ ble' stn vbr. ity bien Gee 230
GEC Alsthom. Lace 34 Seles sens ele dee dint sowi abatar at'e eka eR nehe ee ea a ine ole ee oa
Glaxo Holdings ple. ..isish sce nat stata tesr ales ola li everdt stares ote Metetate CONES Seve GUAUURUSERIMGR, Oo TRE 233
Heochst ‘UK ttre ce ier atd ain We uta a alee a ae cate Ne Tete ek ce cata een eee a 239
Kobe Steel’s European Research Laporatory :../cte sis wicie ciate eG = sueler cists doa ale ee 240
Lilly Research Centre Didi, frien ro Sates bs I eae Og da ee 241
Matra Marconi Spaces ity iis coun eis wks «fas eset Riabdie, oa etS ool se ine tee kh ato 242
Merck Sharp & Dobie to sence eatet cropo ca: hated stato to ft iatetie abele tera hatiti haat he Oats IEA Ft LD 245
Nissan Motors, (GBy TAGs Fire shoe so Wee! By ee ee ne ae 246
PHZer Lt |.) te eis MR eae eeslcs diev nl ap & ote RWI SCON ace Shp ite MioL aue”E tat Rae ene tee ee 246
Philips Electronics . pode ahapeoes «4.4 geting ts eithwaen te ea ele hea bb eet eee 248
Rhéne-Powleney . 7 gen eel ie eiighe, «leet ole emus celat se is es ts hen e a 250
Rhone-Poulene Agriculture: Lid (o'.010) ao: eee erie © «nik yen eee em eoc h ea 250
Roche Products Ltd nid satsis ieee ale REA nee Soagee tere GM GUE she 6h aea e ee 251
Rolls-Royce ple vg. 65 vce eh aes 6 Fa EES amo ican onO e nee ee ee fla!
Sharp Laboratories of;Europe Lid ./..7. fo ois sun eases bie cow cee ene i ee 22
SHEMENS PIC 07.0, oo\csepesertasvahsteacskeds iAeMu scasSeorheai aieoecd,ye ysalec a e 255
Toshiba Cambridge. Research Centre Ltd 0)... .:.2:<)..0.2, bisists. «0.010101. SME ed, BO) 255
Other
Chemical Industriés: Association ..::-..:.:cisccis.c: cissessstetel bldgs tacelenesslchocs eesnhspsrsb erOenSeEi 257
Alex Crawford, Editor, Laboratory News «0.00.06. « ane ERO On. WER BOSSI. We 258
Tnstitute.of Biology. ..).60-....cniislees osserebsiiteleertlceigeincuss eMIgRErIOaRLs eORrE eAble)s vUOa dnnOer e 263
Poughborough University of Technology (.i..04..0.ic:ic.le/s 0SscEh ieAe cSbe 263
Manchester Business School... ;.5:csccdsid: cepotons ada vesefade teeta La:o cw aive heeds ee 269
Royal Academy of Engineerifig:.4)2 02) ei ee eld os a 271
Science Policy Research Unit, University of Sussex .................cceceeceeeuees 274
University of Sunderland
CALL FOR EVIDENCE
Sub-Committee I (Lord Walton of Detchant, Chairman) has begun an enquiry
into International Investment in UK Science, and invites written submissions on this
topic. The Committee aims to make a report to the House of Lords by July.
By “International investment in UK science”, the Committee means overseas
investment in research in science, engineering or medicine carried on in the UK,
whether for civil or defence purposes. We are interested in investment from overseas
sources, whether commercial or public-sector, and whether from within or outside the
EC. We are interested in such investment in any form: research units, either free-
standing or associated with a manufacturing plant; research contracts with universities,
Research Councils, government research establishments or the private sector;
undirected funding of science (eg supporting a chair); support of overseas research
students (though we do not intend to reopen the question of the fees charged to such
students); or other modes. In the case of a multinational company or international
collaborative research programme, we are interested only to the extent that research
conducted in the UK is supported by funds allocated overseas.
The Committee seeks answers to the following questions:
1. What is the extent, nature and variety of overseas investment in UK
science? How does this compare with investment by UK interests in
science overseas?
Abe What factors influence potential investors in deciding whether to come
to the UK for science, or to go elsewhere? (whether elsewhere in the EC,
or elsewhere in the world)
2: What are the benefits to the parties concerned, and the wider UK
economy? (both short- and long-term, both tangible and intangible -
including such matters as training, employment, intellectual property,
access to and exploitation of results, one form of investment attracting
another)
4. What is the level of expenditure by investors, and are there costs (direct,
indirect or intangible) to the hosts?
= What are the policy implications for the British government and British
science?
INSTRUCTIONS TO WITNESSES
Evidence should be submitted to the Clerk of Sub-Committee I (International
Investment in UK Science), Select Committee on Science and Technology, House of
Lords, LONDON, SW1A OPW.
The final deadline for submissions is 29 May.
Evidence must be clearly typed or printed on one side of A4 paper and take the
form of an original copy. Long submissions should include a summary. Evidence
becomes the property of the Committee, and may be printed. You may publicise your
evidence between submission and publication, but in doing so you must indicate that
it was prepared for the Committee.
Persons who submit written evidence may be invited to give oral evidence. Oral
evidence is usually given in public at Westminster, and transcripts are published.
You may follow the progress of the enquiry from the Weekly Agenda of House
of Lords Select Committees. This is free, and may be ordered from Miss Sue Hunt,
Committee Office, House of Lords, LONDON, SW1A OPW (071-219 5791).
Further information from the Clerk, Andrew Makower, House of Lords,
LONDON, SWI1A OPW. Tel: 071-219 6798, Fax: 071-219 6715.
Members of Sub-Committee I are:
. Butterfield
. Dean of Beswick
Desai
. McColl of Dulwich
Nathan
. Nelson of Stafford
. Perry of Southwark
. Perry of Walton
Porter of Luddenham
. Selborne
Tombs
anao=cawoooaainlnPmbhnnlell t l . s W alton of Detchant (Chairman)
MINUTES OF EVIDENCE
TAKEN BEFORE THE SCIENCE AND TECHNOLOGY COMMITTEE
WEDNESDAY 23 FEBRUARY 1994
Present:
Butterfield, L. Porter of Luddenham, L.
Desai, L. Selborne, E.
McColl of Dulwich|,L . Walton of Detchant, L.
Nelson of Stafford, L. (Chairman)
Perry of Walton, L.
Memorandum by Imperial College
Answers to possible questions as supplied by the Sub-Committee Secretariat:
1. Please describe the extent and manner of overseas investment in your departments concerned with science and
technology. We are interested both in research and post-graduate students.
Over the four years between 1 August 1989 and 31 July 1993 the average value per annum of new projects
accepted into Imperial College’s portfolio of Research Grants and Contracts was £46.5 million. The portfolio
included 2,602 research projects during the period.
Of these, 495 (ie 19.0 per cent by number) were supported by overseas organisations. Their annual value
was £8.7 million (ie 18.7 per cent by value of all Research Grants and Contracts accepted). The source of funds
by country was as follows:
£m % of
whole portfolio
European Commission Programmes 4.397 9:5
European Union countries 0.344 0.7
Non-EU Europe 0.664 1.
USA 1.496 23
Japan 1.005 Ze
All others 0.782 1.6
Total 8.688 18.7
(UK 37.851 81.3)
It should be noted that the Japan entry in the above table includes a one-half contribution of £0.625 million
per annum from the Japan Research and Development Corporation (a body of the Japanese Government)
towards a major joint project in microelectronics also supported by the UK Science and Engineering Research
Council. This project stemmed from an agreement reached at Prime Ministerial level on co-operation in
science between UK and Japan.
A further type of research support is via Sponsored Posts. The income of Imperial College from this source
in 1992-93 totalled £1.7 million. Slightly less than 20 per cent of this income came from companies whose
principal operating base is not in the UK.
In 1992-93 the College had 509 PhD students from outside Europe, producing income from fees of £3.8
million.
Imperial College was given The Queen’s Award for Export Achievement 1990 for its contribution to
invisible exports in the form of fees paid by overseas students attending the College and commissioned
research from overseas organisations.
2. (For Oxford)
3. Do you actively seek overseas investment? How? From which countries?
Because of the international nature of research, academics from Imperial College are constantly in contact
with fellow researchers in other countries, engaging in collaborative projects (for example, within the EC
Framework Programme), working at international laboratories (such as CERN, Geneva), attending
international scientific conferences, etc. The extensive network of contacts thereby established—and
constantly refreshed—encompasses many overseas organisations in government, industry and the charitable
sector. A common outcome is that individual academics are approached to undertake commissioned research
projects at the College. Academics also approach potential overseas sponsors of research by responding to
2 MINUTES OF EVIDENCE TAKEN BEFORE THE
ee
23 February 1994] [Continued
public invitations to apply for support from overseas charities, particularly American ones. They also solicit
support from overseas governmental bodies which mount co-operative international programmes in
research, eg USA and Japan.
The College centrally mounts no major promotional efforts abroad to enhance its portfolio of research
projects. It relies rather on the above network of contacts to sustain the present level of research support from
overseas. The network is strongest in Europe, followed by the USA and then the Far East, as reflected in the
respective value of projects in the above table.
Recruitment of overseas students, including research students, is tackled more systematically through the
College’s International Office. This Office regularly sends representatives to student recruitment fairs in
various parts of the world. (Some 38 per cent of research students presently at the College come from outside
Europe. Strong links with Commonwealth countries, first established by Imperial College in the early years
of this century, are still maintained today.)
4. How does overseas investment affect your university’s priorities or activities and those of individual
departments?
In general, very little. In one particular unit, our Interdisciplinary Research Centre for Semiconductor
Materials has had the majority of its financial support provided by the Science and Engineering Research
Council, but this has been augmented by significant funding from Japan Government Agencies and from
Japanese industry. To compensate for this, the group concerned has made a determined effort to relate more
closely to UK and EU activities, and as a result a number of important collaborative projects are being
undertaken.
5. Who are your competitors in attracting overseas investment? (other institutions, other countries)
Where the research in question is very specialised, the only possible competition may be from a few other
university groups, probably distributed across the world, working in the same niche scientific area. An astute
sponsor will be aware of the track records of these groups and act accordingly.
Where the work is less specialised, the competition is likely to come from other universities of similar
research standing, probably in the same country as the sponsor.
6. What are overseas investors looking for? Why do they come here? What would constitute a “‘return”’ on their
“investment’’? Within what timeframe?
In many instances the investor is looking for no more than a means of maintaining a watching brief in an
advanced area of science or technology. If a UK university research group is working at the very forefront of
a rapidly advancing area, a very efficient way for an industrial company to keep in touch with the very latest
developments is to sponsor a post in the research group in question. The postholder would be expected to visit
the overseas sponsor once or twice a year for discussions with the sponsor’s own technical staff. Additionally
the sponsor might offer to the university a research grant or contract, and in such circumstances it may seek
rights to exploit commercially results arising from the research.
Sponsors come to the UK because of the world-leading research groups to be found here.
The attitude to “return” on “investment” differs greatly from one sponsor to another. In general it appears
that overseas companies are prepared to support longer range research projects whereas UK companies tend
to support only research nearer the market-place. A number of overseas organisations sponsoring research at
Imperial College have indicated their willingness to support work which they judge is unlikely to produce
results which can be turned into commercial products or processes within less than five to 10 years. It has to
be said that in general UK companies concentrate their support on research with shorter term commercial
potential.
7. What benefits do you gain from overseas investment in your research? What benefits does the UK gain? (direct
or indirect, short-term and long-term)
As described in Section | above, about 10 per cent of the College’s research income comes from overseas
sources (excluding that from European Commission programmes). Without this support the College’s
portfolio of research would be 10 per cent smaller, for it is unlikely that the shortfall could be made up from
UK sources. The College thus benefits from overseas support by having a more vigorous research
programme, in both a scientific and a financial sense.
Because of the overseas sponsorship of research in its academic institutions, the UK is also likely to benefit,
both indirectly and directly, from access to a large total research effort. Many of the research groups at
Imperial College work simultaneously with a large number of sponsors, mainly from Europe but some from
overseas. The general expertise and competence of a group largely depends on the range of different research
problems it has tackled. The net result of the element of overseas support is that there are perhaps 10 per cent
more trained researchers contributing to advancing the UK science base.
