Page last updated at 07:08 GMT, Monday, 11 May 2009 08:08 UK

UK F1: 'Losing innovation race'

By Jorn Madslien
Business reporter, BBC News

2008 British Grand Prix at Silverstone
Red tape and cost pressures 'hinder F1 innovation'.

Changes to the way Formula One (F1) is run by governing body FIA are hampering the UK motorsport industry's ability to innovate, according to a new report.

"The £6bn UK motorsport sector is in danger of losing the global innovation race," the report's author, Professor Rick Delbridge, told BBC News.

New regulation and cost pressures are "closing the spaces where innovation is encouraged - or even allowed", he said.

F1's contribution to society is thus reduced, according to the report.

Formula One's governing body, the FIA was unavailable to comment.

Fewer contributions

Salmon fishing on the river Liffey
Modern fishing lines are a byproduct of F1 technology.

In the past, the vast sums invested in research and development by Formula One firms has led to a wide range of innovations, "many of which have gone on to improve the lives of ordinary people", Professor Delbridge said.

"For many years, Formula One has been a beacon of the UK's engineering and innovation capabilities," he said.

Examples of F1's contribution range from everyday products such as non-slip footwear or improved fishing line, to medically useful aids such as lightweight leg braces or monitoring equipment based on racetrack telemetry technology.

"Such spillover into the real economy is going to be less likely in the future," said Professor Delbridge, whose research was commissioned by the Advanced Institute of Management (AIM).

"Our study shows that innovation activity is under extreme pressure."

Creativity hampered

Professor Delbridge was eager not to "blame" regulation for "stifled experimentation and innovation" in the F1 industry.

Kimi Raikkonen of Finland and Ferrari drives during qualifying for the Chinese Formula One Grand Prix
Ferrari has threatened to leave the sport.

"Regulation does what it does for good reasons," he pointed out.

However, the report's release coincides with a row within the industry about the introduction of a £40m budget cap for teams from 2010.

Separately, last autumn Ferrari threatened to withdraw from the sport over plans to introduce a standard engine for all teams, arguing the rule "would deprive F1 of its competition and technological development".

Professor Delbridge described how caps on investments and other interventions could have "unintended consequences", pointing to how he had been told during his research that "many engineers feel their opportunity to be creative is hampered by regulation".

"Motorsport is highly regulated in order to ensure safety and fair competition," he said, and this was to be applauded.

"However, this has led to the banning of certain materials and the restriction of research to developing more efficient engines, recovery of braking energy and recovery of heat."

Eye on costs

The trend of tighter budgets contributing to a shift away from the sort of risky, experimental research that occasionally delivered radical innovations had also been reinforced by shifts in the industry's ownership structure, Mr Delbridge found.

British Formula One Grand Prix at Silverstone on July 8th 2007
The study finds that UK motorsport firms lag behind other countries in managing diversity and radical innovations
Professor Rick Delbridge

"Over the last decade or so, there's been a larger involvement of large, mainstream carmakers," he said.

Consequently, "concerns around cost are sharper than they were historically", and R&D efforts were increasingly aimed at very specific targets.

Similarly, competitive teams tended to focus on incremental and immediate improvements that offered quick returns on their investments, whereas great innovations tend to "take some time to bear fruit".

Valuable industry

Many recent developments in F1 hampered innovation across the industry, both in the UK and overseas, Professor Delbridge said. However, the impact would be more acutely felt in the UK.

"The UK's 'Motorsport Valley' is held up as the eminent cluster of engineering talent and capacity," he said. "There are more F1 teams and companies in the UK than elsewhere and they are more significant to the UK economy than to the economies of other countries."

Some 4,500 companies are involved in the UK's motorsport sector, employing 25,000 engineers and providing a further 13,500 jobs.

The report also said that the UK sector was further impacted by a greater reluctance to engage with a diverse range of companies to seek out innovative new products and materials.

"There are some indications that some of the UK teams are not as active in seeking out partners," Professor Delbridge said.

Many players were risk averse, with a taste for buying innovations that had already been proven in another sphere, such as aerospace.

And fear of loss of intellectual property meant that companies were reluctant to cooperate with each other.

"The study finds that UK motorsport firms lag behind other countries in managing network diversity and this can reduce the prospects of radical innovations," Professor Delbridge said.

In order to become more successful in the long-run, he said companies and teams should be more open to engage in joint development activities with companies from other sectors or even countries.

UK policy makers should also contribute to maintaining the industry's competitive advantages by assisting inter-sector relationships "for example between aerospace and motorsport industries", and through other measures to "promote and sustain radical innovation", Professor Delbridge said.

Rick Delbridge is a professor at Cardiff University. The Advanced Institute of Management Research's report Racing for Radical Innovation was co-authored by Dr Francesca Mariotti of Stirling University.

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