§ Mr. HunterTo ask the Secretary of State for Trade and Industry what criteria he uses in determining whether or not research applications for his Department's funding are near market.
§ Mr. LeighThe DTI does not normally support near-market R and D under its innovation programmes. Research and development work is prima facie near-market if its primary objective is the development of a specific product or process for commercial sale or use. Typically, near-market R and D will display low technological risks, and the returns from the project will mostly accrue to the firm itself, with externalities or wider benefits being relatively minor. Such risks as there are will largely be commercial. Commercial risks are generally inappropriate for Government to underpin.
However, exceptions may be made where, for instance, enterprises may lack some of the necessary information to enable them to make a sensible judgment on their competitive position or on the way the market will develop, for example in the case of small firms, or where commercial outcomes may be significantly affected by future United Kingdom, foreign or international legislation. Moreover, Government support may be considered if a project exhibits a significant degree of both technical risk and wider benefits, or if it exhibits one of these characteristics to a very marked degree, or for other policy reasons such as the promotion of international collaboration or the facilitation of exports. The case for support would be strengthened if other forms of market failure were shown to exist. The project would also need to satisfy established criteria such as additionality, viability, degree of innovation and value for money.