The purpose of the meeting was to bring together leading
people from the marine industries and from Government research establishments
and Agencies to discuss issues linked to the transfer of expertise from
government to industry; a short summary paper is to be forwarded to government.
The meeting was attended by 28 people, of whom half
represented commercial companies.
Four sessions were organised, in each of which a presentation on a
particular topic was followed by open discussion, led by the session
chairman. The sessions on 26th
March were chaired by Ian Townend (ABP Mer Ltd) and Trevor Guymer (SOC): Paul
Ridout (Ocean Scientific Ltd) and Mike Cowling (Glasgow Marine Technology
Centre) were chairmen on the 27th March. The meeting concluded with a final discussion session to
consider any points not previously addressed.
Privatisation, Agencies and Trading Funds
The session was introduced by Bob Moss, UK Hydrographic
Office, who outlined the experience of UKHO in making the transition to Trading
Fund status. The remit is to
provide products and services in four main categories, Defence, National, Civil
and Commercial on a self-funding basis.
The Trading Fund approach is working well. This is reflected, inter alia, in the fact that although Defence
represents the largest customer, less than 15% of revenue is currently derived
from this source. Challenges
include low cost competition, the need to provide enhanced functionality in
products, with faster/cheaper delivery, against a background of changing
regulations and international constraints. However, UKHO has advantages in its existing capabilities,
status and market share, as well as in economy of scale in production and
distribution. Future marketing
strategy seeks to retain a viable future revenue stream by entering new market
sectors, and by developing new cooperative approaches through licensing and
joint ventures. Furthermore, the
substantial proportion of UKHO’s revenue is generated from interests
outside the UK – a reflection of the fact that the majority of the
world’s merchant fleet no longer sails under UK flag or ownership but
still predominantly uses UKHO’s products.
Discussion explored, in a non-specific manner, some
contrasts perceived between organisations with Trading Fund status and
commercial companies. Small
companies sometimes feel that they are at a disadvantage when competing with
the much larger former government organisations – for example in ability
to take risk – though it is acknowledged that to a degree the two kinds
of organisation address different market areas. Trading Fund status does not imply that such organisations
are not subject to full commercial pressures, and future investment capital
does not arrive via subsidy, which is made available only for core public
service activities. Bare financial
statistics do not always fully reflect an ability to create wealth; the licence-partnering
mechanism of technology transfer has in the case of UKHO, for example, resulted
in the creation of a new knowledge-based industry.
The fact remains that Trust Funds and privatised
organisations have established themselves well in the marketplace; small
companies must adapt to the situation, and either compete head-on or explore
ways in which they can integrate their activities. However, there is a concern that with the privatisation of
government research and development, underpinning applied research is no longer
being funded because it is insufficiently profitable – and in the UK
there exist no organisations such as TNO (Netherlands) or the Fraunhofer
Institutes (Germany).
Ian Downey, British National Space Centre, made the introductory
presentation for this session. UK
Space Strategy, last set in 1999, is currently under review, with the
consultation period concluding on 30th April. Currently two thirds of funds are
devoted to activities undertaken jointly within ESA, encompassing Earthwatch
and Space exploration. It is also
a critical time for Space activities at the European level with a Green Paper
in preparation on European Space policy.
EU policy decisions require input from ESA in areas such as regional
monitoring, land cover change, security aspects, and regional aid
development. It is important that
assets such as ENVISAT and the GALILEO satellite navigation system be brought
together to meet such needs. There
are major opportunities for thus combining imaging, navigation and
communications systems in innovative service provision – and the UK has a
world-class applications industry able to contribute.
However, a major issue now arises in ensuring continuity of
provision of space data products to the user. Thus far, the emphasis has been on technological push,
funding has been on an R&D basis.
The transition now has to be made to operational funding, with large
associated infrastructure costs.
The situation is now urgent for the proposed JASON 2 system, but will arise
again and again. How is it to be
resolved?
Discussion centred on the need to ascertain the extent of
the customer base and to establish a coordination mechanism across what is a
potentially wide user spectrum.
Formerly a single entity could state a requirement, but now no one
organisation considers this to be its responsibility. In this respect JASON 2 is a microcosm of the wider issue of
decision-making capability and responsibility. The issue is national rather than purely governmental: it is
complicated by the fact that few commercial companies can look ahead more than
a year or two, whereas timescales involved are longer term.
Cost-benefit analysis presents difficulties also. This can be done for programmes as a
whole, but is more difficult for individual technologies, particularly where
replacement of tried technologies may be involved; funding of both may be
required over a period of time.
End user requirements at the level of information needs, rather than
data and data products, might be studied to assess commonalities.
BNSC is to consult member organisations on future strategy,
but it was suggested that additional representation of views is needed and
commercial thrust should be in evidence.
The Small Business Research Initiative (SBRI)
Karen Woodhall (NERC) outlined experience gained so far with
this scheme, under which Research Councils can procure a part of their research
from SMEs. First awards were made
in April 2002; a second call is imminent.
The intention is to add value to grant in aid by procuring R&D
likely to lead to new products and services. In NERC procedures will be modified in the future to reflect
experience gained so far and to create a more flexible approach to promoting
and enabling knowledge transfer.
In particular a Knowledge Transfer Fund will be set up with money (2.5%)
top-sliced from Thematic Programmes and this will in future have a NERC-wide
remit.
Discussion revolved around the effectiveness of proposal
selection, the speed with which the scheme is being implemented – and the
extent to which the views of the Thematic Programmes should be taken into
account. Points made include the
need for better publicity for the scheme and results of awards; also greater
transparency in the decision making process, especially on the commercial
side. In the latter respect the
proposed publication of criteria on the SBRI website is welcomed. The commercial performance criteria on which
an industrial partner is assessed should moreover include profitability rather
than merely turnover. As regards
speed of implementation a new programme of this nature takes time to establish
fully and is dependent on the quality of proposals received – proposals
which are genuinely commercially orientated – otherwise delay can
result. The scheme is moving in
the right direction. The approach
to be adopted by NERC in the future, which also includes a simple Procurement
Panel, should improve matters further.
Paul Ridout, Chair AMSI,
who outlined the many ways in which Trade Associations benefit industry and the
customer, introduced the final session.
In the recent formation of AMSI the aims include the promotion of the marine
environmental business, supplying a coordinating mechanism for industry,
creation of awareness and helping to influence future legislation. A good beginning has been made, but a
‘critical mass’ has not yet been achieved and it is now necessary
to choose between different strategies for the future, ie whether to operate as
a virtual association with limited resources, or to try to grow into a fully
functional organisation and, if so, how to achieve this. At present AMSI is feeling its way,
getting to know other organisations.
As it develops further a number of issues have to be addressed, eg
extending beyond purely national membership; affiliating to umbrella
organisations such as SMI.
The views expressed in discussion clearly considered that
fragmentation in the industry – mirrored also in other industries –
is a handicap and has held government back from doing business. A collective view from industry is
vital and efforts to develop this are to be strongly encouraged.
General Discussion
The short concluding discussion revisited the topic of
unfair competition following privatisation of former government laboratories,
and the degree to which recent privatisations could be said to follow a
different model to those in the past.
Attention was also drawn to forthcoming legislation from
Brussels concerning freedom of access to environmental information. As a result of the new regulations
embracing aspects of research and survey data held by public authorities or
bodies with public responsibilities for the environment, organisations such as
NERC and the UKHO would now be affected.
A paper reviewing future strategy options for accessing
value added data is currently in preparation by UKMIC and will be disseminated
shortly.
Peter Collar
April 2003