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.

    87/148 (page 85)
    8 February 1990] [Continued [Lord Flowers contd.] and production. The Americans said they come up against this problem, and the Germans and Dutch and so on. We feel this is not a problem which is unique to the Ministry of Defence. Having said that, I think the general feeling in the group and in other discussions we have with our allies, is that probably Frascati is the best we have got. It is what the OECD use and we do our best to comply with Frascati and present a genuine picture. 232. This takes me on to my second and related question. We have been talking about the development-production border line, one can also talk about the applied-basic border line. You claim, quite correctly I imagine, by the strict interpretation of the rules that the Ministry of Defence does no basic research at all? (Mr Mumford) Yes. 233. But you do do research which is directed towards increasing knowledge and understanding in certain fields which are related to long-term national security needs, and that by strict definition is applied work because it is directed towards certain needs. All I can say is that the actual work you do under that heading, things like material science, use of lasers in investigative areas, properties, materials techniques and so on, are things which many industrial firms and many other government departments I think would call basic research, even though in the long-term they are directed to some purpose. I just wondered whether there again there is a difference of interpretation in what the words mean, whether you may actually be strictly more correct than the others but whereas, as a result, we get false comparisons? (Mr Humphries) We certainly apply that strictly, that particular definition. In our role as spenders of defence money on research we really must see that there is an ultimate defence application to the product of any research that we sponsor. In fact it is one of the key criteria, when we vet the proposals which come to us from the research establishments for the most innovative and far-looking research, that it does fit into exactly that category; that there is an application for it if it pays off in the defence world. 234. However long-term? _ (Mr Humphries) We do set a target of around 10- 15 years pay off. We do not go any further forward it is directed in this way. There is, of course, a spin-off from it. It does produce information which, if it was found in another way, perhaps would have been classified as basic research. We are doing it because we can see an ultimate defence application. Under those circumstances we believe that it is the applied research definition which applies. Lord Flowers:I think you are correct and everyone else is wrong, but that makes the comparisons false. Chairman 235. You will not get the money if it is said to be basic. (Mr Humphries) We would have some very severe questions asked by my colleague on the right about spending money on things that did not have a definite Lord Gregson 236. You must be aware of the discrepancy between yourselves and industry in apportioning the percentage of your spend to R&D, and the Frascati definition is very wide indeed and it cannot be bridged by the sort of points you are making relating to the expenditure. With both the CBI and British Aerospace—if you take the various comments they have made in giving evidence—we are talking about figures like 20 per cent. to 50 per cent. of the expenditure that they spend on your behalf which they feel could be classified as Frascati. It is not true to say you are not aware of the basis on which industry allocates its expenditure, because I know very well that you have looked very carefully at SSAP13 and that is the basis on which industry allocates its expenditure in order not to be qualified by accountants in their annual reports. That information is well documented and has long been available. Considering, in effect, that two-thirds of the money you show in your expenditure accounts is actually spent by industry, there really is an enormous discrepancy between what you are saying and what industry has told us. If I could also turn to the other question of what is spent by the establishment. You may well be aware that I did spend a few years trying to negotiate the purchase of one of your establishments under the Strathcona recommendation. I had to make an assessment of the various activities of that establishment. I must admit that if I had to allocate the various expenditures relative to Frascati it would certainly be at the bottom of industries’ assessment towards the 20 per cent., if not less, rather than towards the 50 per cent. There really is a very enormous difference between what industry thinks you should allocate and what you are telling us could be allocated under Frascati. That makes it very, very difficult to accept the sort of definitions you are providing us with. (Mr Mumford) I do not think I have a great deal to add to what I have already said. We are certainly conscious of the claims made by certain sectors of industry. 237. It is not just the SBAC, it is the CBI as well. (Mr Mumford) I am not sure whether the CBI have told us directly about the results of their studies. Lord Gregson] That is their problem and not ours. Chairman 238. I can quote them. They said, ““The majority of MOD contracts are not in the spirit of Frascati and are essentially routine product development involving no appreciable element of novelty.” That is from the CBI. (Mr Mumford) Some routine development would be caught by Frascati. As I said at the outset, my Lord Chairman, we do have in hand some studies of our own. We are aware of the claims made by industry and clearly they are not something we would want or should brush aside as superficial or misguided in any way. We are prepared to sit down with industry and compare figures. Indeed, it may be when we have taken our studies much further forward that we would be in a better position to