Mike Carr
Chief Science Officer, BT Group
"Increasing R&D spend is not only a good 'lead' indicator of successes yet to come, it is also a signal of business confidence."
Each year the Government publishes the "R&D Scoreboard" which
provides a snapshot of R&D activity by both the UK’s most active
850 companies, and the 1250 most active globally. Over recent years
the Scoreboard has become the core reference for benchmarking
R&D investment data.
For BT specifically, it has become an invaluable tool. The key strength
is that it provides a comprehensive review of auditable data across
diverse industry sectors. As Chief Science Officer for BT I routinely
use this data as a benchmark input for our internal annual Research
investment case.
Of course it would be possible for BT to independently assemble a
small subset of data found in the Scoreboard by analysing a handful
of reports and accounts directly. However, I have found from
experience that this is ineffective as it generates more questions on
why a particular set of companies was chosen than it answers by
giving a true benchmark on a wide range of companies.
In addition, as an open public document, the Scoreboard data
reference gives confidence to our shareholders that we are taking
appropriate action in the sector we operate in. BT has moved
very rapidly from being a telephone company and has become
a significant broadband and global ICT player. Without wide
shareholder awareness of the metrics involved, our significant yearon-
year R&D increase might have been difficult to understand.
In 2003 BT spent about 2% of its sales revenue on R&D. This year’s
Scoreboard lists us at over 5%. This substantial increase is consistent
with the fast changing market in which BT competes. The increase
can be categorised into three areas:
-
BT’s success in winning significant networked ICT business
globally. These wins, worth several billions of pounds, require
substantial development and integration of new technology.
-
Products and services which take advantage of the new
"broadband" world. Innovative products such as BT Fusion
and BT Vision were not possible on narrowband. Our success
with driving broadband in the UK has created some fantastic
opportunities requiring R&D investment.
-
The creation of our 21st Century Network platform (21CN). This
massive undertaking is all about building a global, flexible, cost
effective network and service infrastructure which can support
the dynamic needs of our future customers.
Increasing R&D spend is not only a good "lead" indicator of successes
yet to come, it is also a signal of business confidence. However, for
many companies, the challenge is to prioritise sufficient funds from
today’s business to be able to invest for the future. Looking at the
Scoreboard it is clear that there is massive R&D investment around the
globe. Driving innovation in the UK through continued investment in
R&D is absolutely key to the UK’s future success. The UK Government
is keen to drive the average UK R&D investment level from its current
level of about 1.8% to 2.5% of GDP. This needs to happen companyby-
company, sector-by-sector. Keeping a close eye on where any
company sits in R&D investment, compared to the Global benchmark,
may well spark a re-examination of investment priorities.
I believe the UK is actually very well placed to take advantage of
increased R&D investment from industry. We have a world class UK
science base (and we need to ensure it remains so) which results
from a long history of leading UK Research Universities and Science
institutions. These have led to an extraordinary record of scientific
discovery in this country. The real challenge is turning these
innovations and opportunities into real products and real services.
Only industry can do this. We must therefore continue to build our
collective investment in applied R&D activities.
