Britain tries to get more for its R&D money in the marketplace

By , Special to The Christian Science Monitor

Prime Minister Margaret Thatcher is backing an initiative to free bureaucratic constraints to let loose a new breed of British entrepreneur. Government ministers from Mrs. Thatcher down are trying to encourage small companies to grow in areas of science and technology - sectors in which Britain has long had expertise but has generally lacked commercial muscle.

For a long time, observers of Britain's industrial scene have been worried that the country fails to obtain good commercial results from the money it plows into research and development.

At the last count, this stood at some (STR)7 billion ($10.5 billion) per year , or just over 2 percent of Britain's gross domestic product. Of the total R&D figure, the government contributes about half.

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At a meeting of some of Britain's top-ranking scientists and industrialists last month, Mrs. Thatcher proposed two measures to help ideas evolving from research laboratories move into the marketplace.

University researchers wanting to sell inventions will no longer have to offer their ideas first to the British Technology Group, a state organization. This had been seen as a safeguard against individuals cashing in on research paid for by public funds. But the government thinks the mechanism can delay efforts to get new inventions into the marketplace.

Finance and venture-capital firms are to be allowed into laboratories run by the Ministry of Defense. The ministry spends some (STR)2 billion ($3.5 billion) a year on R&D for weapons systems and other military equipment.

Because of security procedures, companies rarely get to hear about what the military researchers are up to. As a result many ideas that could have commercial value never see the light of day.

As a start, a group of financial institutions has looked at work taking place at the Royal Signals and Radar Establishment in Malvern, Worcester, one of the ministry's top R&D laboratories.

If they see anything they think is commercially useful, the institutions may arrange for other companies to take out licenses on the technology.

The Department of Trade and Industry is also helping small firms move into advanced areas of science and technology. It is spending some (STR)200 million on grants to encourage firms to make new hardware or use it in their production processes.

Although it remains sketchy, the best evidence indicates the government policy is having some effect. According to tax figures, in 1981 the number of new companies exceeded the number of companies that closed by 15,000. This reversed the trend of the previous year, in which 2,000 more companies shut down than opened.

Meanwhile, Britain's ''big four'' banks - Barclays, Midland National, Westminster, and Lloyds - have in the past year hired full-time advisers to help them evaluate proposals for financing ventures that involved science and technology.

This ensures that a would-be, high-tech entrepreneur would obtain a fair hearing from his bank, rather than a blank stare.

University researchers are becoming less isolated from industry. Ironically, one reason for their greater involvement is the cuts in university education by Mrs. Thatcher's government. As government funds have dried up, academic researchers have turned more to industry for cash to finance their experiments. And more of them are willing to ''get their hands dirty'' and start their own companies.

According to Dr. John Bradfield, the senior bursar at Trinity College in Cambridge, researchers are becoming more keen on industrial collaboration. ''A few years ago they would not have thought it the right kind of thing to do,'' he said.

Cambridge is a boom area for new science and technology firms. Five years ago the city contained some 40 small firms in these disciplines. Today there are about 200, in technologies as diverse as optical instruments and biosensors.

According to a bank manager in Cambridge, two small technology-oriented firms start up every week. Many of them are spinoffs from bigger firms in the area or from university laboratories.

One of the biggest success stories in Cambridge is the computer manufacturer Acorn, which will soon start selling in the US. The firm is just five years old, yet sales reached (STR)42 million in the year ending July. It made an (STR)8 million profit.

The one anomaly about all these government support ventures is that they do not fit in with the Conservatives' general policy of not interfering with industry.

Some right-wing politicians hope the projects will be dropped as soon as possible. Meanwhile it appears that Britain's high-tech industries are enjoying all the stimulus they can get.

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