The Catapult Effect- Using Short Term Crisis to Catapult Long Term Success

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British values, ideas and its rich intellectual tradition are celebrated at home and admired around the world. However, certain aspects of British culture and economic ideology have proven serious impediments to the forging of close working relationships between the science community, government, and private industry. They are sometimes noted as key reasons that adoption of the German model of innovation would be difficult in the United Kingdom.

In countries like Germany and Taiwan, which have proven adept at translating scientific knowledge into competitive products, scientists, engineers, technicians, and skilled factory workers are admired throughout the broader society. That is less so in Britain, a fact that is reflected in phenomena such as the lower priority historically accorded science and engineering curricula at some universities, the tendency of young people to avoid careers in these fields, and ultimately, shortages of personnel with the education and skills needed by technology intensive domestic companies.

A UK Competitive Weakness.

Institute for Public Policy Research. Look at the national stereotypes. Scientists are egghead lab-coated geeks; engineers are metal-bashing factory workers or mechanics fixing broken appliances. The German and Taiwanese innovation models relentlessly drive findings derived from basic research into the factory and marketplace.

The net result is that…you reap what you sow…the technician class for big and growing businesses is sorely in need of more technicians. The work of this team contributed substantially to the development of the electronics industry and atomic energy. Oakley, Brian and Kevin Owen. It rewarded publication and pure research rather than work within industry. That has been a factor. The Dynamics of Industrial Capitalism.

As a result of this belief, the critical linkage between higher education and industry, so essential to the development of long-term. Today, generations after this dynamic was observable, it remains an issue in the U. In countries like Germany, the United States and Taiwan, which are innovation leaders, the government plays a supportive role in coordinating and sometimes funding collaborations between the research base and industry.

Britain and the Experience of Relative Decline The Collapse of British Power. Developing Industrial Policy in the UK. Such government action has been inhibited, albeit not foreclosed, by a longstanding and commonly-held view that the government should not intervene in the economy to promote particular sectors and companies. The first step to achieving this would be the development of a national industrial strategy. Among other things the program provided for government review of whether long-term government capital investment should be undertaken in innovative small and medium companies.

New Industry, New Jobs. The Political Economy of High Technology. The government has announced many useful initiatives to support engineering and manufacturing. But it has gone about things in a piecemeal fashion. The net result is that I suspect for many in this room the name Alvey is entirely new. I commend that you go back and look at the evaluation reports on Alvey. You will see that it made no difference whatsoever to the electronics and IT industries in the United Kingdom in subsequent decades.

Bridging the Valley of Death. That perspective has been partially if not wholly discredited by the events of the past five years. British attitudes that have hampered innovation, are beginning to change. The Chancellor of the Exchequer closed his March budget statement with the following statement:. We want the words: That is how we will create jobs and support families. I find that practically none of that attitude remains. Even worse, it is now clear that the banking and financial services sectors, taken as a whole, did not generate as much added value as has been supposed.

Instead, paper profits were reported which were based on leveraging the price rise of financial assets. Whether this is because of its focus on deficit reduction, which limits the amount of money available to support such an approach, or is the result of an ideological attitude to government intervention, is unclear. In truth, it is probably a mixture of the two. Hermann Hauser Discusses Commercializing Technology. At the end of the s, manufacturing accounted for nearly 30 percent of national GDP and employed 6.

The big British-owned factories of the s are mostly closed or sold off either because of shareholder value demands for profit which encouraged retreat, or as a result of inept privatization which destroyed supply chains. The closure of the factories doomed many of the assembly and process companies that supported them: Import dependency is the legacy…British manufacturing has downsized into workshops, as it loses its industrial districts. The proportion of British companies with 10 or fewer employees grew from 52 percent in to 76 percent in , while the proportion of firms with or more employees shrank from 4 percent to 1 percent during the same period.

A number of observers point out that the dramatic shrinkage of British manufacturing overshadows areas of abiding strength. The United Kingdom is still the ninth largest manufacturing nation on earth. Although the sector has contracted in terms of jobs and percentage of GDP, output is actually 25 percent higher than it was in , reflecting the rapid improvement of labor productivity. But there is also a long tail of low value-added manufacturing firms that compete largely on price.

To do that, you have to have longer-term finance that will buy out the VCs and keep the companies in this country. It may be in partnership with a UK company, but the statistics show that most of these companies are sold overseas because the Americans, Indians and Chinese all have their chequebooks open. Improving Commercialisation of Research. Structural changes in the British manufacturing sector have affected the industrial research infrastructure supporting manufacturing.

Public research institutions supporting British industry have also been downsized. Rolls-Royce told Parliament in that in contrast to Germany:. It has also significantly reduced the scale and scope of remaining centres such as Culham, the National Physical Laboratory and the National Engineering Laboratory. It takes years to create, and very skilled management to keep it vibrant. Once broken up, it is impossible to put it back together again.

Sometimes these strange social organisms run out of creative steam and deserve to die. In fact, in the last years of its life it invented what many of us thought would be one of the defining communications devices of this century and, incidentally, the salvation of its telco owner - the broadband phone. The small firms that increasingly comprise the British manufacturing sector are not well positioned to fill the research and training gaps left by the retreat of the big industrial labs.

When the British government began examining the challenge of knowledge transfer from basic science to industry, it was frequently pointed out that the United Kingdom already had an extensive system of public and private organizations engaged in knowledge transfer, some of them excellent.

A much bigger gap is the fact that they are sub-scale and that they have not been operating in a joined-up way, focused around UK-wide national. Aditya Chakrabortty, economics lead writer for The Guardian, commented in The current UK approach has often resulted in sub-optimal and dispersed investments with the lack of long-term funding certainly damaging the ability of the established centres to: Various surveys of British industrial competitiveness have warned that the country faces a skills deficit in manufacturing.

The Dyson report noted. Part of setting up a TIC model ought to be to try to work out a better model of getting that information out to a community that might actually want to use that. December 15, , Q Frankly, it was a bit of a disaster, because you are not going to create any critical mass of activity if you spread it that thinly. December 15, , Q4 Ev 2. At present, the United Kingdom has one of the lowest literacy rates in Europe.

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Its secondary educational system does not sufficiently foster education in the sciences. That fact makes it harder for British universities to assemble students who are capable of pursuing degree programs in areas such as mathematics, chemistry, the physical sciences, and biology. This skills shortage is particularly acute in the manufacturing sector.

In a recent survey, 20 percent of manufacturers reported skills gaps, while 31 percent of high-tech manufacturing firms had recruited people from outside the UK owing to a lack of suitably qualified people from within the UK. Head, Department of Biochemical Engineering. The Silent Social Revolution: In the government initiated the Modern Apprenticeships program, managed by regional Training and Enterprise Councils TECs , providing for employer training of year olds and certification of skills on a sectoral basis. Filling the Skills Gap? The review is headed by Doug Richards, a serial entrepreneur and founder of the School for Startups.

A study found that SMEs—. This ranges from difficulty in getting to work on time, unrealistic expectations of what the role entails and a lack of basic English and Maths. It seems that schools no longer provide this support. Unlocking Talent, Building Skills for All.

Apprentices completing such programs receive a nationally consistent completion certificate. In the apprenticeship programs, the employer offers a paid job at a reduced wage to the employee, plus training and support. The government fully funds apprenticeships for employees aged , and co-pays half the cost with the employer providing the other half, for individuals between 19 and 24 years old.

Government support is reduced for individuals who are 25 or older, those at large employers, and those with prior skills. The Richard Review of Apprenticeships: Another challenge is an acute shortage of employers willing to take on apprentices. In , the number of applications in the United Kingdom for apprenticeships exceeded available positions at companies by a ratio of about 10 to 1.

Changes to the Apprenticeship Programme. The British government has been grappling with the challenge of applied research for decades.

The key British government organizations involved in supporting applied research and innovation are summarized below. It funds individual companies and institutions based on competitive peer review. The TSB is comprised largely of individuals with business experience.

Funds are allocated to universities on the basis of competitive peer review. Until , Regional Development Agencies RDAs were business-based organizations aimed at promoting regional economic development, including innovation and science. The RDAs supported the establishment of innovation clusters adjacent to universities, science parks, and incubators for start-ups. In June , the British government indicated that it would abolish the RDAs in , with future economic development relegated to Local Enterprise Partnerships LEPs , which did not receive any funding from the central government.

The SBRI program uses government procurement to provide business opportunities for small businesses by funding research challenges facing government organizations. The individual projects are funded by the organizations seeking the research, with companies selected in competitive process administered by the TSB with the exception of Health and Defense. The Manufacturing Advisory Service MAS is a government agency established in by the Department of Trade and Industry to provide strategic and technical advice to small and medium enterprises in the United Kingdom.

MAS was originally comprised of regional Centres of Manufacturing Excellence in various parts of the United Kingdom, funded through the regional development agencies. In , with the abolition of the RDAs looming, MAS was reorganized as a national level agency with a 25 percent lower budget. Experience has demonstrated, however, that the complexity of the German system of innovation raises the risk that the wrong lessons can be drawn from it with unfortunate consequences.

In , with the United Kingdom in recession, the Thatcher government began considering measures to bolster the British manufacturing sector.

In the Prince of Wales, who was interested in innovation policy, asked Sir John Fairclough, a computer engineer and former advisor to the Thatcher government, to head a working group to explore how to improve technology transfer. Innovation in Manufacturing History. The Story of Oxford Instruments. These students will go into industry with that much greater experience. Industry was contracting with the institute for the remainder but much of this research was also co-funded by the German research ministry, BMFT, and other EU and German government entities.

Shooting for success: the launch of the Catapult centres

It was noted that according to Dirk-Meintz Polter, Deputy Director of the Fraunhofer, the main vehicle for technology transfer was contract research for industry:. Technology transfer through people is a secondary thing. It is something we want, and encourage, but it is not a primary goal. It is not something we measure. The Faraday Centres also lacked the political and popular support that Fraunhofer enjoys throughout German society. The failure of the Faraday Centres was followed by a succession of major studies by the government, the political parties, and public organizations hammering on the same theme—Britain urgently need to put its science to work for industry In March , the United Kingdom's two leading political parties each released a study examining the potential for utilizing innovation to improve the global competitiveness of British industry.

Although not identical in. Even the pharmaceutical ones are effectively going now. When the new government came to power, science minister David Willetts took the idea forward and asked the TSB to create six to eight Technology and Innovation Centres as they were originally called.

The most obvious choice for the first centre was to focus on high-value manufacturing, not least because the UK already had a number of research facilities such as the Manufacturing Technology Centre MTC that fell into this category and could be brought together under one metaphorical roof. There was also a clear need for a centre focusing on offshore renewable energy that could help develop the rapidly growing wind and marine energy sector. We have to focus all the components of the UK innovation chain into one place and stop competing internally and start competing with China and Germany and America.

The same ideas about developing supply chains and taking the risk out of new technologies by providing the tools to get them to market were also applied to two other sectors identified as having big commercial potential for the UK: Most of the centres have yet to open for business, but the HVM Catapult operates across existing research facilities so it gives us an early glimpse of how the concept works. The model prescribed by Hermann Hauser and taken up readily by the TSB is for one third of the funding for each project to come from industry, one third from government in this case through the TSB , and one third from academia or grant funding sources such as the EU.

The ideas for projects will also come from both universities and businesses, explained Elsy. Then we look to industry to say: Do you need lightweight vehicle structures and do we need to develop that capability to embed it in the UK?

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Do we need next-generation landing gear for aircraft? When a technology is identified, the Catapult can then begin the process of trialling and developing manufacturing processes, producing batches of advanced prototypes and testing them to destruction, and scaling up the fabrication process ready for commercial launch. And a company can benefit from their full range of capabilities on single project rather than working on individual elements separately, according to Dick Elsy.

This also hits on a key question about why the government has decided to effectively subsidise the kind of research that used to be carried out by big companies on their own but that they gave up to boost short-term profits. We have to be world-class in application, quality, cost and in the deployment and integration of technology. The government is even picking winners, or at least picking sectors, something that most free-marketers probably thought they had won the argument against.

But those in favour of the Catapults say government is filling a gap that would otherwise go empty due to market failure. Elsy is keen to stress the commercial focus of the centres, however. Not everyone is convinced the Catapults can do everything they claim to offer. But private sector involvement is strong and the concept has plenty of support. This is a really, really good use of government money to fuel and fund growth in a genuine and lasting way.

Northamptonshire-based Sandwell is an SME specialising in shot peening a metalworking process for small batches of complex components for sectors such as motorsport. As well as providing funding to support the project, the MTC developed a software package to control an eight-axis robotic system and identified the best 3D scanning system for creating accompanying CAD files. Catapult is brave initiative.

These projects can deliver in the right climate.

Catapult centres are attracting a growing number of members who see them not only as an opportunity to do business with the tier one and two companies but crucially to work with these beacons of excellence to showcase their technology.

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