Select Committee on Science and Technology Appendices to the Minutes of Evidence


Memorandum submitted by British Telecommunications plc

  In general we are in full agreement with the major proposals emerging from the White Paper and in particular welcome the strengthening of links between universities and business and the design blueprints for investment and support to encourage companies to innovate and adopt new technologies. However, we would like to ensure that excellence in R&D is retained and the emphasis on skill building is maintained and is not lost in the drive for a more entrepreneurial culture. Both need to exist side by side.

  We welcome the Government's promises to invest in renewing the infrastructure for science and technology at higher education institutes which is sorely needed. The additional money that will go towards key technology areas that will shape life in the 21st Century such as genomics, nanotechnology and quantum computing is essential if the UK is to improve its position in wealth creation and the quality of life of its people.

  The additional money to support post-graduate research students is also welcome as is the innovation of an extra £4 million to assist in the recruitment and retention of fifty top researchers in the UK. However, we see this as a stop-gap measure, in that we believe that if the UK is to retain top academics, wherever they are in this system, then the overall level of remuneration in higher education needs to be improved. We believe this would also go some way to raising the status of scientists and engineers and make this a vocation that many young people would want to follow.

  As we stated in our previous submission to this Committee, we believe that capturing children's imagination and encouraging them to take up careers in science and engineering must a priority in any policy and technology. We therefore welcome the Science Ambassador's Programme but again believe this should be an ongoing programme which should continuously impact children in both primary and secondary education.

  In terms of Foresight, we are pleased to see that a Foresight fund will be put in place but would very much welcome detailed strategic documents outlining the Government's science and technology programme for each department. These we would envisage as a central plank of government policy. We believe these could be core documents which would allow government, industry and academia to plan for the future. In addition, we believe that a Minister of Cabinet rank with responsibility for science and technology would also send the right messages concerning the Government's priorities in Science and Technology.

  We stressed in our last submission that the programme for Higher Education Reach Out to Business and the Community, HEROBAC, was welcome and really encouraged universities to work with local businesses. It is pleasing to see that this will receive extra money over the next three years. The additional money allocated to new regional innovation funds is something we at BT are particularly interested in, given the emphasis that we have placed on establishing the Cambridge/Ipswich high tech corridor. We are, via our own Brightstar initiative, encouraging clusters and incubators to be set up in the local environment and also at our central R&D site at Adastral Park. The new corporate venturing tax reliefs established by the Finance Act 2000 are unfortunately of no help to BT here—because the rules are so narrowly drawn (not to say unduly complex), none of BT's investments in start up companies set up so far would qualify. This would indicate either a positive policy decision to exclude such companies from the relief or that the relief is itself misdirected.

  We are also encouraging the links between academia and business by our involvement in the Massachusetts Institute of Technology and Cambridge Initiative, CMI, and we have also partnered with University College London to set up on site at Adastral Park. As part of this initiative we are encouraging other industries in the area to be partners in this exciting university venture. In the future, we intend to establish a corresponding business school alongside this technology development. We would be happy to share our experiences in this arena with the Select Committee.

  Two areas which we feel are not fully addressed in the White Paper are the efforts needed to address the skill shortage, particularly in the area of IT and communications. We are not sure how the Government is going to deal with this as it earns only passing comment in the White Paper. We understand that the imposition of new rules by the Inland Revenue under IR35 has made the UK a less attractive location for IT professionals operating through their own company and this must surely run counter to the Government's stated intention of putting the UK at the forefront of the IT revolution.

  In addition, we have some concern over the proposal to change the rules regarding ownership of intellectual property rights, especially within academia. This needs to be carefully considered so as not to drive away industry from investing in academic research. There is real possibility of this happening. A number of years ago industrial development officers in academic institutes tried to claim all the intellectual property rights generated under industrial contracts as belonging to that academic institute. This caused major problems for larger industrial concerns and led to many contracts with academia being cancelled. This was very difficult for pharmaceutical companies in particular who survive solely on their intellectual property, so whilst endorsing entrepreneurialism within universities, we feel the issue of governance over intellectual property rights needs to be thoroughly thought out. We would be happy to take part in any discussions on this topic as we have significant experience in this area. Please contact Dr Graham Davies.

  We would also be happy to provide guidance on the posting of intellectual property rights on internet sites which is not such a simple matter as described in the White Paper. What is posted and how it is written is critical if one is to achieve any significant sales. We would be willing to share our experience with companies such as and uventures who already operate in this space.

  Finally, we reiterate our concern over the scientific debate that goes on in the media. We believe it is essential to have transparency on all topics relating to science and technology if the public at large is to be a partner in this process. However, we would like to see a well reasoned debate taking place on peer reviewed material. Where such debate is conducted in an environment of limited understanding, there is the danger that "the baby will be thrown out with the bath water" and that the potential benefits to the quality of life and to the UK economy as a whole will not be fully realised.

  We would suggest if an increase in R&D is to be achieved it would be worthwhile considering enhanced tax beliefs for large, as well as small companies, as it is within large companies that the vast bulk of R&D is conducted. It is unlikely to cost the Exchequer inordinate amounts in tax relief but may well have a disproportionately beneficial effect on the R&D environment in the UK.

  In conclusion, we believe that this White Paper and its proposals are a significant step forward in raising the profile of science and technology, not forgetting engineering, as a cornerstone in the Government's overall programme.

10 January 2001

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