Written by David Gow – this article appeared in The Times on 16 May 2011
A fleet of zero-emission, hydrogen-powered black cabs could be ferrying athletes, officials or spectators to and from east London during the 2012 Olympic Games under a government-backed project.
The technology strategy board (TSB) has invested in a unique consortium of UK companies that have produced the first two taxis to be run on hydrogen fuel cells – and operating on the capital’s streets since March this year.
Auto industry executives have hailed the TSB’s risk-sharing role in this and other projects as a key element of plans to revive British manufacturing by attracting investment in innovative companies capable of not just commercial success but beating global competitors.
Simon Wood, technical consultant to Lotus Engineering, a consortium member, said the TSB’s willingness to take on risk had helped bring together companies big and small that would otherwise have been incompatible.
“Would we all have come together without the TSB? That is most unlikely, nay impossible,” he says of the “eclectic” consortium headed by Intelligent Energy, a fuel-cell specialist spun off from Loughborough University, black cab-maker LTI, braking experts TRW, and Lotus.
Wood, a member of the Automotive Council’s technology group, says the board, set up in 2007, represents a break from old government ideas of “picking winners” or funding “wacky ideas” as its approach is structured and focused on industry.
“We’re probably doing double the amount of pure research that we were doing ten years ago because the TSB provides half of the funding,” he declares. “It’s much more cohesive; they have a plan and it enables companies to take risk too.”
The board, established when Labour was in power and sustained by the new coalition government, has invested around £1bn in UK innovation so far and has an annual budget of around £200m.
It plays a key role in supporting companies through what Don Newton, group technical director at battery-supplier Axeon, calls the “valley of death” commercialisation phase. Axeon – and Lotus – are in another consortium headed by Jaguar Land Rover and Nissan to produce prototype range-extended electric vehicles (REEVs).
Newton’s firm, owned by hedge fund Ironshield, supplies lithium-ion batteries for the project. He says the TSB has helped it develop its capability both in terms of testing and verifying new, advanced electro-chemistries (such as nickel cobalt manganese) and identifying UK firms capable of bridging the “valley of death” stepping stones.
“If this model can be successfully proven, it opens the door to high value-added ‘sticky technology’ staying in the UK in a strategically critical area, thus boosting the prospects for UK jobs and potentially developing a British Automotive Tier 1 supplier capable of competing on a world stage,” he insists.
The board, executives agree, can be instrumental in providing the missing link between very strong blue-skies research at universities and commercial end-use application – a gap that has consistently seen British firms lose first-mover advantage to foreign competitors.
Charles Morgan, head of the eponymous car-maker, says UK universities are very good at engineering, with first-class research attracting thousands of foreign students. “What I’m trying to do is encourage companies to use these extraordinary skills and locate here.”
He sees knowledge transfer partnerships – part-sponsored by the TSB and designed to boost links between academia and business – as key to future success. Morgan works with Oxford, Cranfield and Birmingham City Universities on the LIFECar2 electric car project.
A proponent of the view that the UK should become a centre for small, flexible, innovative manufacturers rather than mass production firms, he says this will enable British companies to compete with bigger German or Japanese companies. The increased R&D tax allowance in the March 2011 Budget will help this, he adds.
“The UK has the ability to compete and some of the engineering by, say, BMW will be done here. Look at the Mini and fuel-efficient engines…Because it’s German-owned doesn’t mean it doesn’t use British know-how…What we’re lacking here is British-owned companies,” Morgan says.
Simon Wood says that British small firms may need to scale up to compete with the likes of German Mittelstand companies with, say, 200 staff. He adds that Britain may also renounce ‘real parts’ production on cost grounds, preferring instead – like Axeon – to do high-end final assembly here and repatriate IP revenue streams.
Axeon’s Don Newton comments: “We may have lacked scalpel sharpness in the past but, in the new low-carbon economy where every product area is a clean sheet of paper, we can compete with the big foreign boys. There‘s an element in the British mentality which says, we will make it work and happen.”