The Duke of York’s speech at the Research and Development Conference in Düsseldorf, Germany, 27 February 2007
Good morning. I am delighted to be here today in Düsseldorf in my role as the UK’s Special Representative for International Trade and Investment to support the work of UKTI and to see an impressive cross-section of German business represented at this conference.
I last visited in 2005 and it clearly demonstrated to me the strong economic links that exist between our two countries. I was struck at that time by the strong collaboration that exists between science and technology here in Germany and the synergy with the UK. All those who have chosen to invest in the UK have done so as a result, I believe, of the excellent commercial relations that exist between our two countries and the open environment the UK offers to investors. This is not a new phenomenon, as far back as the second half of the nineteenth century Anglo-Irish engineers played a significant role in bringing cutting-edge mining technology and innovative forms of industrial organisation to Germany. Today, this tradition of mutual exchange of new technologies continues in many sectors and has become an important aspect of the modern business relationship between Germany and the UK.
I want now to turn to our bi-lateral trade and investment relationship. The UK is the number one location in Europe for German investors: over 3000 German subsidiaries are already present in the UK employing more than 300, 000 people and generating a turnover of €115 billion. 90% of all German companies with a turnover exceeding €250 million are already operating in the UK. The UK exported goods and services to Germany in the region of €34 billion in 2005 coming a close second after the US at €48 billion. In the same period, German exports to the UK amounted to €55 billion, making it the third biggest export market after France and the US.
A recent survey carried out by the German Chamber of Commerce revealed that a third of German companies interviewed carried out some of their research and development overseas. Among the key drivers listed were – proximity to market, a better research legislation environment and labour market flexibility, all of which I am glad to say can be found in the UK.
Britain has a long and proven track record of innovation, research and development which has encouraged leading-edge companies to make considerable R&D investments in the UK and thereby securing significant commercial benefits. Roke Manor, a subsidiary of Siemens, which I visited last year to celebrate their 50th Anniversary, is a prime example of such a company with their leading edge research in Defence Projects. The number of foreign R&D investment projects being undertaken in the UK increased by 63% per cent in the last 12 months alone compared to the previous year. Government spending on R&D in Britain will have almost doubled by 2008 to £3.4 billion although this is of course not the only source of financing. With a 40% share, the UK is the largest market for Venture Capital in Europe and we have a “Business Angel” network that is the envy of many. There is plenty of opportunity for IPOs or expansions in need of additional funds, be they well established companies or rising stars. Mr. Peter Linthwaite of the British Venture Capital Association will be providing more detail later this morning.
There are 32 Innovation Relay Centres (IRC) in the UK facilitating the transfer of innovative technologies to and from European companies or research departments. These are support service providers mainly funded by public organisations such as university technology centres, chambers of commerce, the regional development agencies or national innovation agencies drawing on European funds. In addition there are 17 Knowledge Transfer Network organisations focussing on specific fields of technology with the objective of improving the UK’s innovation performance. They are funded directly by the British Government.
A recent survey on Science and Research carried out by the European Commission revealed that European companies expect to increase their R&D investment at a rate of around 5% per year, a considerable increase on previous years. At such a rate, European companies would be doing as well as their US counterparts for the first time in several years. It is the declared goal of the British Government to maximise the opportunities in this field in order to remain one of the leading research nations. One of UK Trade & Investment’s important roles is to facilitate and support international collaboration between companies, universities and research institutes by taking a pragmatic approach. In fact we believe that British pragmatism combined with German attention to detail and organisational excellence will be a winning formula in driving forward our shared desire for innovation.
UK universities and associated research centres enjoy an excellent international reputation and have substantial experience in working closely with all parts of the private sector in undertaking leading-edge R&D. It is said that Professors in the UK typically carry two business cards: a university one, and a company one. Our Academics work keenly with industry and venture capital providers and as a result, many spin-off companies have been created. Over the last 3 years alone 25 former spin-off companies have gone public with a collective market value of £1.5 billion.
One such example is Cambridge Display Technology Ltd., perhaps one of the most exciting developments in the display industry in the last fifteen years. The company uses polymer light emitting diodes for a multitude of applications in the electronic industry. Starting in the Cavendish Laboratory at Cambridge University in 1989, the first licenses were secured in 1996 and in 2004 the company was successfully floated. It now has a current market valuation of $125 million and the most extensive IP portfolio for P-OLED materials and devices, indeed a very impressive story from small beginnings.
Last March I visited yet another successful spin-off from Loughborough University – Intelligent Energy plc, dealing with PEM fuel cell technology for a diverse range of applications – from refrigerating vaccines in rural Africa to providing energy, not only for commercial and domestic supply, but also transport. The technology is capable of generating hydrogen from a wide range of available fuels, ranging from traditional fossil fuels to bio-mass and other renewables. Innovative fuel cell technologies, coupled with an intelligent approach are making clean power achievable anywhere today.
Commercial R&D in the UK can take various forms including setting up your own facility, collaborating with universities, forming a partnership with a British company or contract research. More than £5.5 billion was spent on R&D in Higher Education Institutions, of which almost three quarters was provided by the Government, 14% from charities and the remainder from industry and overseas sources. Without any doubt the UK is at the forefront of leading-edge and market-near research: so if you are looking for a slice of this cake, please don’t just look to the US or the Far East – there is plenty of it much closer to home.
UK Trade & Investment in Germany have been working for some time now on developing a specific programme to increase the volume of contract research placed by German companies in the UK. A report was commissioned in 2003 to take a closer look at the UK/German R&D scene. Richard Lambert who now heads up the Confederation of British Industries found that Germany and the UK broadly speaking had similar ideas in a European context although our approaches varied in terms of practice and sectoral focus. What was absolutely clear was that more could be achieved by working even more closely together.
Today’s conference is another step in this direction. The complimenting strengths of our leading companies and research communities are a formidable force to be reckoned with – so let’s make the most of it.
The general session this morning should give you knowledge of the UK R and D landscape and this afternoon will be an ideal opportunity to hear in-depth what the UK has to offer Germany in five specific areas – nanotechnology, oncology, marine renewables, RFID and semiconductors, which have been identified as the first window of opportunity for future co-operation. I very much look forward to hearing about the outcome of the workshops and partnering event and wish you every success with potential collaborative ventures.