Definitions of R & D : report with evidence.
- Great Britain. Parliament. House of Lords. Science and Technology Committee.
- Date:
- 1990
Licence: Open Government Licence
Credit: Definitions of R & D : report with evidence. Source: Wellcome Collection.
63/148 (page 61)
![Co ee 23 November 1989 ] [Continued oor ee eer Ee interface areas and the interpretation of the definitions quite well but it is a difficult subject which takes many pages. A more concise and “‘user friendly” set of definitions and supporting documentation is probably the most effective improvement which could be made. It is important that the UK puts its own house in order, and if at all possible, the internationally agreed approach established by Frascati should be retained. J. Arnall, Head of R&D 23rd February 1989 | Companies, called in and examined. Chairman 97. Mr Yates, we are very grateful to you and your colleagues for having come along to talk to us this afternoon and answer our questions and for the various pieces of paper you have sent us, including extracts from lectures you yourself have made, and Dr Stewart’s paper. If I could just bring you up to date as to where we are, we started off with the study at the beginning of the year. It arose out of dissatisfaction which previous studies has caused in our mind about definitions of research and development and their use for either policy purposes or making comparisons either between industries or nationally or internationally. We spent the early part of our study trying to make certain we were asking the right questions. That took us a few months, and we had help from you and others in advising us as to what questions to ask. We sent out to 31 different organisations including industry, government departments, accountancy and others. We did not send out exactly the same questions to all concerned. The Sub-Committee then turned its-attention to the greenhouse effect while the backroom boys tried to digest all the evidence we received. We have now reached the stage where we have looked at all this evidence and we want to tackle some major issues that arise out of this, in which we realise you have taken a great deal of interest, in particular the major question of the distortion caused by the MOD’s figures. So perhaps you would like to introduce your colleagues and, if you wish, make a general statement before we ask questions. (Mr Yates) If I may first introduce my colleagues, Dr Stewart who was with the MOD has now been helping in some of these activities over the last two or three years. Mr John Arnall of British Aerospace is the head of research and development. I understand from your remarks that you fully appreciate the difficulties; it is a rather complex subject and any attempt to produce meaningful apparently simple statistics can be very misleading. I got increasingly interested, partly for reasons of internal management in the company and the efficiency with which we did our research and development, and I tried to make comparisons with the competition but also recognised that the significant difference in the way the MOD recorded their costs, which was perfectly satisfactory for MOD purposes, did lead to traps if you added it in simply to the rest of the civil sector, which thereby overstated the total research and development apparently in the United Kingdom. That worried me because I felt that we were not aware of a significant situation, when apparently there was a deficit in relation to other countries— similar countries—and it was really at that point, about three years ago, when we started to look into some of these things in some detail. Since then there have been a series of studies to which you referred. I think probably they have got nearly as far as is necessary. It is one of these situations—rather like trying to find the length of the periphery of the United Kingdom, when you start looking at finer and finer detail and you start worrying about individual pebbles on the beach—or wonder whether the chap in the lab making the tea is actually doing research and development or not. There is a point beyond which it is not worth going. I believe we have got toa good practical situation now where one can reasonably understand, where—although there are quite a lot more things, particularly in the civil sector, where we do not understand everything very well— it is much better. Perhaps that is an answer to your question. 98. Then do you think SSAP 13 is going to make a significant difference to the accuracy of our knowledge of the R & D going on in industry? (Mr Yates) I think it will help, but it really addresses the profit and loss account of the company. So there would be two things missing from that, one of which could' be costs of research and development which are counted under the overhead costs of the company and therefore do not appear. Secondly, it may not take account of research done under contract. For instance, in our case in British Aerospace many companies are under contract to the Ministry of Defence or even the DTI, so in that sense one would tend to understate it. But the Frascati definition is satisfactory, but SSAP 13 might miss out the points I have made. 99. If I am right SSAP 13 only asks for an overall statement of the R & D and does not expect it to be broken up into research and development. (Mr Yates) No, I think there are two aspects, if I may. One is differentiation between research and development. I think it is important actually that differentiation is made, partly to understand the](https://iiif.wellcomecollection.org/image/b32218540_0063.jp2/full/800%2C/0/default.jpg)
