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Most captains of industry in Britain want the government to take a bigger
role in directing industrial and academic research. This is the principal
message from a survey of more than 700 directors in British companies
by the London-based consultancy company KPMG Peat Marwick.

Rod Dowler and his team at KPMG found that while 46 per cent of companies
wanted no government intervention in industrial research, 50 per cent wanted
more direction from government in the form of advice and cash. This conflicts
with the government’s own strategy, which is to avoid tampering in industry.

KPMG found that the strongest support for intervention came from within
the automotive, aerospace and information technology industries. But directors
of oil, chemicals and food companies opposed intervention.

Supporters of intervention said a government policy on R&D would
provide ‘focus and direction’ for the country’s industrial research effort.
Also, it would ‘expose the need for government funding’. Last year, the
Department of Trade and Industry withdrew direct support for industrial
R&D, a policy which drew widespread criticism (This Week, 7 May). ‘The
government should have a focus on R&D, because it controls what happens
in the science base, and is a large customer for R&D,’ says Dowler.

Respondents also felt overwhelmingly that the City does not understand
the importance of R&D to industry. A huge 82 per cent of the interviewees
from companies listed on the London Stock Exchange felt that stockbrokers
misunderstand industry’s investment priorities. And 21 per cent of managing
directors condemned the short-termism of the City. The same proportion felt
that the City did not appreciate the link between R&D and future growth.

The survey found that three-quarters of managing directors felt that
research directors had a large say in the firm’s overall strategy (see Graph).
The influence of research directors was considered smallest in food and
oil companies, and in businesses making parts for road vehicles.

Dowler says many respondents criticised the lack of engineers in senior
management, saying that this blinded companies to technological opportunities.
‘I think we need more engineers in boardrooms,’ says Dowler. ‘In Germany
and the US, they have much higher status.’ KPMG also found strong support
for tax relief related to spending on R&D, another policy rejected by
the government. ‘Tax incentives were considered particularly important to
promote R&D in Britain,’ says the KPMG survey. More than half the R&D
directors interviewed considered their links with academic institutions
to be increasingly important to their R&D strategy. Least interested
in this area were food companies, with 61 per cent considering links to
be of little or no importance.

Separate interviews with 12 City analysts revealed that 10 were unaware
of the government’s White Paper on science published in 1992. They agreed
that they look only at short-term performance, which may be at odds with
R&D strategies. But they complained that companies are too secretive
about their R&D plans.