Definitions of R & D : report with evidence.

  • Great Britain. Parliament. House of Lords. Science and Technology Committee.
Date:
1990
Catalogue details

Licence: Open Government Licence

Credit: Definitions of R & D : report with evidence. Source: Wellcome Collection.

    69/148 (page 67)
    [Chairman contd.] it is not too much of a difficulty. Given the level of definition which we have been discussing today, for instance, I think that would be perfectly adequate as a basis on which one could base a tax system. The Germans and the French also I believe have had basically tax alleviation systems of a different type, but I would honestly believe the level we are talking about, using properly interpreted Frascati, would be a perfectly adequate| basis for such a system. 155. If we could just get back again to this, we are going to take evidence from the Ministry of Defence. Where do you think the major distortion comes? Is it in the aerospace field? Is it in the naval field? In what field is it—or is it in all fields? (Mr Yates) From the analysis we did and the cross-check from the British expenditure with the American, which is more clear about its definition, we came to the conclusion that the distortions were of the same order of magnitude in all three categories, land, air and sea. It is not confined to any one. Lord Erroll of Hale 156. I would like to put it the other way around. Supposing you did not have this elaborate statistical exercise at all, would you regret its absence? Would you have any suggestions as to what might be put in the place of the present system? It cannot be wholly bad, on the other hand it does not appear to be wholly good, because of all the complications which arise. Could this Committee spend a little time re- appraising the whole system and possibly suggesting another system? Would you welcome such a proposal or would you say it is not worth the effort, particularly if you were on this Committee? (Mr Yates) I use the word motivation again! I think it is difficult to conceive of a set of definitions which is much better than the Frascati ones. That would be the basis of anything I would go for. As to whether it is all worthwhile anyway, which I suspect was where you started, I think if the UK had a growth of its GNP which was the same over a long period of time as other countries and that we had a manufacturing base that was nearer to 30 per cent of the GNP than 20 per cent, I would not be very worried about it. But in fact, given that I believe there is an overstatement error, by accident, of the R&D and that research and development is a great driver particularly of high technology industries, and it is their growth which is crucial to the growth of the modern economy, I think it is very important to understand the process. Therefore I greatly welcome what your Lordships are doing and I think it is important to pursue it. Lord Kearton 157. The lack of civil R&D is a symptom really? (Mr Yates) Yes, it is. Lord Clitheroe 158. There is a problem of course that as far as the MOD is concerned in producing these statistics, there is some desire to show there is a lot of research and development going on in the UK, and there is a problem on the other side for many companies I would suggest because if they show very high numbers of R&D they then become much more vulnerable, their profits are down and they look on the whole not too good. So there is an understandable difference between the numbers which are produced, and perhaps the actual situation is not all bad. (Mr Yates) There must be pressures in different areas to under-record or over-record, or wish to do so. I believe the distortions are significant enough because the MOD figure is quite large and I am talking about £1 billion of R&D that is not done in the UK that we wish was done. That is so significant that I think it is important to pursue it. Once that is redressed you can be much more relaxed about some of the details, the minutiae, of the definitions and so on. Lord Kearton 159. Now that Austin Rover is part of the Aerospace group, have you had a chance to look at the research and development activities of Austin Rover? (Mr Yates) Yes. 160. What is your opinion of the work that Bhattacharyya is doing at Warwick? (Mr Yates) He has obviously made a lot of significant contributions there but the pattern of research and development in the automotive industry in their published accounts is different again. So that is another distortion one has to watch out for. The other thing is that the automotive industry is a mature industry in the technological sense, so it is incrementally improving, steadily by a _ very creditable amount, and a lot of the improvements come from manufacturing technology, and not just from new products, which is also often over-looked. That is true throughout most of the industry and a great deal of work has been done in Rover not only by Bhattacharyya but also with contacts with Honda and a lot of people. Chairman] Mr Yates, I thank you and your colleagues very much indeed for answering our questions so clearly and helpfully; it will be of enormous help to us as we proceed on our study and advance towards confrontation with the Ministry of Defence! Thank you.