European industry joins for high-tech push

A new word has become fashionable in European industry during the past few years: collaboration. European companies, particularly in the fast-moving electronics sector, are increasingly banding together to face the commercial challenge from companies in the United States and Japan.

This applies especially to research. A number of projects have been organized both at the government level and by companies themselves. These include the European Commission's Esprit program and the Eureka program now under discussion by 17 West European countries. They aim to get better commercial results from the $40 billion a year that Western Europe as a whole spends on research and development.

This is coming at a time when the US is looking for partners in its high-tech Strategic Defense Initiative. In Brussels Wednesday, US and British officials reached agreement on British technological involvement in the so-called ``star wars'' program. British Defense Minister Michael Heseltine said that, although no US guarantees were made on the level of British involvement, he expects British companies to receive SDI work on the order of $1.5 billion. US negotiations are continuing with West Germany on

SDI cooperation.

Beyond SDI, however, Europe must try to close the technology gap with the US and Japan. Too often, European nations have tended to back their own ``national champions,'' neglecting vital issues such as reducing trade barriers or reaching agreement on technical standards to make it easy for companies to market their products widely.

``We all accept the diagnosis that Europe innovates badly, but it is not very good at products,'' says Geoffrey Pattie, Britain's minister for industry and information technology. ``Government activities such as Eureka can loosen up the rigidities.''

So far Eureka is just a loose set of proposals set forth mainly by France. These were considered by 17 European nations at a meeting in Paris in July and will be discussed again in Hannover, West Germany, on next Tuesday and Wednesday.

Eureka is intended to give companies and governments a way of clubbing together on a range of research programs. The projects will be funded in a variety of ways: Some countries may put up 100 percent funding to back their industries on specific projects, while others will contribute smaller amounts. European jargon for this approach is ``variable geometry.''

Some initial Eureka ideas include transportation systems such as high-speed trains, air-traffic-control computers, space research, and home entertainment equipment. The key to Eureka is that it would back market-oriented ideas rather than individual pieces of technology that may be a long way from being incorporated into products.

France says it is willing to earmark 1 billion francs ($125 million) for the program's first year of operation, and West Germany is prepared to inject 300 million marks ($115 million). Details on the total cash should become clearer later this fall.

Four of Europe's biggest electronics companies -- GEC of Britain, Thomson of France, Siemens of West Germany, and Philips of Holland -- are studying the possibility of joint projects under Eureka auspices.

Most likely, Eureka would be run by a small steering group of civil servants from four or five nations. Some countries, however, want to ensure that the European Commission has as little to do with Eureka as possible. The secretariat could easily smother Eureka with bureaucracy and is already snowed under with attempting to harmonize the affairs of the 10 countries in the European Community (which will increase next year as Portugal and Spain join).

The EC is, however, credited with success in the shape of Esprit, a pan-European series of technology-oriented research programs that started last year. Under Esprit, the EC is to make grants to companies and academic institutions in areas such as computer software, factory automation, and office systems. The first batch of 104 projects, announced in January, brought together 265 companies, universities, and research institutes.

Companies involved in the work put up funding equal to the government grants. The research is intended to be ``precompetitive'' -- at any stage an individual company can leave the project and work to bring out a product based on the research.

Esprit is only indirectly involved in product development, an area in which European companies are weak. But it is hoped that research cooperation will spill over into joint commercial ventures. Already GEC and Thomson have followed up collaborative research in chipmaking with product-development studies.

Collaborative projects organized solely by companies include a joint research center in computers that ICL of Britain, Bull of France, and Siemens of Germany have set up in Munich. Philips and Siemens are working together on new forms of semiconductor chips. And in telecommunications, CIT Alcatel of France, Siemens, Plessey of Britain, and Italtel of Italy have collaborated on new exchanges and transmission techniques.

European companies are also trying to strengthen links with universities. Siemens is to spend 100 million marks ($38 million) over five years to fund research at German universities, partly to gain access to scientific expertise. In many parts of Europe, governments, universities, and companies are jointly setting up science parks on the fringe of campuses to encourage contact between the research world and the commercial sphere.

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