18 May 1990 - 20 May 1990

Obstacles to the Translation of Scientific and Technological Advances into Industrial Production and Economic Wealth

Chair: Sir John Kingman FRS

A conference with Soviet participation at Ditchley

The second conference held at Ditchley with Soviet, US and British participation followed the pattern established by the first in November 1987, with simultaneous translation and all discussion in plenary. The subject, however, the suggestion of the USSR State Committee for Science and Technology (GKNT), though broad in scope, was nevertheless more clearly focused than in the earlier meeting. To fit the pattern of the meetings, the topic was divided as follows, one for each session: the nature of the problem and the factors in a society which encourage the successful transfer of technology so as to create wealth; the balance between fundamental and applied research and the funding of each; commercial exploitation and the characteristics in business or industry which promote it; finance and management; education and training; and the conclusions. This division worked reasonably well, and participants were most meticulous both in observing the agenda and in time-keeping.

At the start it became apparent that participants from North America and the UK on the one hand and from the Soviet Union on the other, approached the problem from very different angles: while the Westerners (for want of a better term) saw the problems in a national or industrial framework, the Easterners tended to see “technology transfer” in terms of transfer across international frontiers and to look for solutions through international cooperation, whether government to government or through joint ventures. In particular they seemed to have in mind the tapping of sources of capital for the development of Soviet technologies of known value which lay largely unutilised for lack of hard currency, rouble investment not being a problem. Underlying this difference of approach there was also a rejection by the Westerners of governments as controllers or directors of research or development (although not of an element of government funding for certain types of effort, which was recognised as an essential complement to private and industrial finance). The Easterners, on the other hand, partly no doubt because of the tradition of the system which they were avowedly trying to change, saw a continuing, if reducing, role for government, not only as provider of finance and of an appropriate legal framework, but also as regulator and to a large extent as arbiter of the directions for the research effort

As a result of this difference, most marked in the Soviet approach to such global issues as the environment and the fight against AIDS, where it was argued only international cooperative efforts could guarantee that the right targets were addressed and the resulting remedies would be available to all at affordable cost, much of the opening debate seemed to be at cross-purposes. In the Western view, because governments (and other bureaucracies) were not good pickers of “winners” and were slow to drop “losers” (because politically it was never easy to admit to a mistake), the best hope of producing a crop of winners was through “massive parallelism”, i.e. the encouragement of research down a wide variety of avenues. Moreover, it was necessary to be prepared to carry the cost of a high proportion of losers as well. While they seemed to accept this in principle, there seemed also to be a propensity among the Soviet participants, to hanker after the more centralised system to which they were accustomed.

In this context, there was agreement that no clear distinction could be drawn between fundamental and applied science: not only did the situation vary from one industry to another (e.g. the pharmaceutical industry was technology-led, and the market for a new product had to be created, while the motor industry was consumer-led and had to adapt through intensive market research to consumer needs), but even when the distinction seemed clearest, the boundary was in fact blurred. The importance of consumer demand and of understanding the market for a product was stressed; and it was noted that the technologically inferior product might, in some circumstances of the market, prove the more successful.

Similarly, there could be no objective criteria for deciding how much in total should be spent on research or how much of that total should go to fundamental research. To a large extent the market must regulate the allocation of resources, and a multiplicity of sources of funds would maximise the chances of producing winners.

In transferring technology from the laboratory to the production floor, then, the keys were management, marketing and market research, design and full cost accounting, to quote Mr. Gorbachev, so that an enterprise knew the true cost of its products and could judge whether they were profitable. Moreover, it was the individual scientist whose skills produced the winners and means had to be found, through appropriate rewards, often but not necessarily money, status also being important, to motivate him or her.

In examining education and training, we concentrated on tertiary education, while noting that training was a life-long process and that the primary and secondary levels laid the foundation for the production of skilled workers and an educated democracy. The shift in the balance in funding tertiary education in the UK away from preponderantly government finance to a point where in some cases the government only provided some 50% of the funding, was healthy and because of the cooperation with industry, academic staff had sometimes introduced important revisions to the content of academic courses. In the UK, and perhaps elsewhere, the problem of attracting graduates into manufacturing had not been solved and given demographic trends and the demands of industry, there was a great need to expand the intake to universities and polytechnics from its present low level of only some 14% of the eligible population. It was argued further that it was important for the quality of teaching for university staff to be engaged also in high quality research: the concentration of research effort in central institutions militated against that, though there was no single rule. The possibilities of using TV and radio as educational tools were also noted, though they were no substitute for personal tuition.

In the context of training, a number of schemes were noted under which Soviet managers and technologists were undergoing courses in Western management techniques in the US, the UK, France, and elsewhere. These were a success, the experience of working in Western business being particularly valuable: the absence of a common business language was the principal problem, and that might explain in part the relatively poor success rate of joint ventures (out of 2100 registered, 70% were inactive because the Western partner had not put up the promised investment).

In a short summary of 9 hours of discussion much has had to be omitted. The following specific points, however, seemed to emerge:

(a)          A strong call for international cooperation in research in such areas of concern to all mankind as the climate and the environment, and diseases such as AIDS (the existing international research into nuclear fusion was noted). The point was also made, however, that international agreements could complicate and import undesirable rigidity.

(b)          The interplay between what science could provide and the demands made by the market required subtle management and thorough and continuing market research.

(c)           There was no clear line between fundamental and applied science nor any objective criterion for the allocation of resources, but it was essential to maintain “a healthy science base”, i.e. sufficient scientists working in the area of basic science, to support the applied science sector.

(d)          Both command and market economies had faults: it should not necessarily be a case of 100% one or the other. Perhaps there was an historic opportunity to produce a system which minimised the faults and avoided the brutalities of each.

(e)          There was a need for an international data-base of available technologies (cf. the International Centre for Scientific and Technical Information in Moscow which caters for the Soviet Union’s allies). The various patent registration offices should not be ignored as a source. (Current reform of patent laws in the Soviet Union should take account of the best international practice.)

(f)           The importance of education, at all levels, and throughout life could not be over-estimated. TV and radio could be a useful tool.

(g)          Governments and bureaucracies, including bankers, were bad pickers of “winners” and slow to drop losers: a multiplicity of research effort was more likely to produce a range of ideas from which winners could be chosen - by managements which understood science as well as the market.

This Note reflects the Director's personal impressions of the conference. No participant is in any way committed to its content or expression. 

Conference Chairman: Sir John Kingman FRS
Vice Chancellor, University of Bristol; Director, IBM UK Holdings Ltd, Beecham Group pic; Member, Council, British Technology Group; a Governor of the Ditchley Foundation


Professor John Ashworth

Vice Chancellor, Salford University; Director-designate, London School of Economics and Political Science; Chairman, National Computing Centre; Director, Granada TV; Member, Programme Committee, Ditchley Foundation
Dr Julian Cooper
Faculty of Commerce and Social Science, University of Birmingham
Mr Tony Egginton
Deputy Chairman and Director of Programmes, Science and Engineering Research Council
Mr David Fishlock
Science Editor, Financial Times
Mr Ian Harvey
Chief Executive, British Technology Group
Mr Ralph Land OBE
General Manager, Eastern Export Operations, Rank Xerox Ltd, London; Member, East European Trade Council
Mr David Logan
Minister and Deputy Head of Mission, British Embassy, Moscow
Sir Charles Reece
Non-executive Director: APV pic, British Biotechnology Group; Member: Advisory Council on Science and Technology (ACOST), Advisory Committee on Industry, Committee of Vice-Chancellors and Principals, Science and Engineering Research Council, Parliamentary and Scientific Committee (Vice-Chairman)

Dr Keith Bostian

Executive Director, Microbiology and Molecular Genetics, Merck Sharp and Dohme Research Laboratories, Rahway, New Jersey
Dr Debajyoti Chatterji
Chief Executive, Technical Activities, The BOC Group; Director, BOC Foundation
Dr Ralph E Christoffersen
Vice President, Research, SmithKIine Beecham Pharmaceuticals
Dr Robert J Mackin Jr
Program Director for Technology, Jet Propulsion Laboratory, Pasadena, Ca
Dr John Redmond
Vice President, Research and Engineering, GTE Corporation and President, GTE Laboratories Inc.; Senior Member, Institute of Electrical and Electronic Engineers; Member, American Association for the Advancement of Science, Industry Advisory Committee of the US, National Research Council
Dr John Wiesenfeld
Deputy Vice President for Research, Cornell University

Mr V. A. Bykov

Minister of the Medical Industry of the USSR
Professor V. P. Groshev
President of the Union of Managers of the USSR; Rector of the Moscow Institute of Management
Mr D. M. Gvishiani
Academician; Director of the All-Union Scientific Research Institute of Systems Studies of the USSR Academy of Sciences
Mr P. A. Ishutin
Head of the Social-Economic Department of the Central Committee of the CPSU
Mr AI Kiselev
Director General of the Khrunichev Factory
Mr G. A. Mesiats
Academician; Vice President of the USSR Academy of Sciences; Chairman of the Scientific Council for External Economic Expertise of Scientific Developments
Mr Alexander K Serdyuk
Deputy Head of the USSR Stale Committee for Science and Technology (GKNT) Directorate for Scientific and Technological Collaboration; Member of the USSR/UK Joint Commission on Economic, Scientific and Technical Collaboration
Dr V. V. Yezhkov
Deputy Chairman of USSR State Committee for Science and Technology (GKNT)

Supporting Staff
Mr A V Alekseev

Assistant to the Minister for the Medical Industry of the USSR
Dr B D Antonyuk
Adviser to the Chairman of GKNT
Mr N. N. Buzaev
Deputy Head of the Department of GKNT dealing with protocol matters and accreditation of foreign firms. Chief administrator for the delegation
Mr V S Shcherbakov
Leading Specialist in the GKNT Directorate for Scientific and Technological Collaboration. Responsible for UK affairs
Professor Yuri Shevelev
Scientific Counsellor, Soviet Embassy, London