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Last Updated: Friday, 23 November 2007, 12:51 GMT
Qinetiq: from cold war to hard cash
Qinetiq advertisement
Qinetiq does things that other firms can barely dream of
The myth about Qinetiq is that the defence firm's name is a nod to Q, the head of the Secret Service's research department in the James Bond films.

Q, which stands for quartermaster, equipped the British spy with gadgets to fight his Cold War enemies.

But he did not inspire the name of the research firm spawned from a Ministry of Defence privatisation.

The Qinetiq name can be broken down into three parts, a spokesman says.

Qi hints at the firm's energy, net its networking ability and iq its intellect, a spokesman explains.

Cold War roots

Qinetiq's origins do, however, lie in the cold war.

It was formed from the larger part of the Defence Evaluation and Research Agency (DERA), the British government's military research laboratories.

DERA's scientists used their expertise in the struggle with the Soviet Union.

The end of the Cold War saw Prime Minister Margaret Thatcher cut its funding, setting it on the path to privatisation.

Very few companies have their capabilities. It is because we, the taxpayer, paid for it
Paul Beaver, defence analyst

The agency was split in June 2001.

One part became Qinetiq, while the other became the Defence Science and Technology Laboratory (DSTL).

In 2003, the Ministry of Defence sold a 31% stake in Qinetiq to US private equity firm Carlyle Group for 42m, a sale which remains controversial four years later.

Taxpayers could have made more from the sale, executed at a time of weak share prices, a National Audit Office report found.

Carlyle's one third share in Qinetiq has grown in value to 372m, giving it a nine-fold return on its money.

Government and taxpayers have also benefited from Qinetiq's growth.

Licence to research

If it hadn't been for Q branch, "you would have been dead years ago", the fictional Q told Bond in License to Kill.

Qinetiq does not make quite the same claim for its work, but it has channelled some if its military know-how into more everyday products.

Daniel Craig
The firm's links with James Bond are, sadly, a myth

People who have their feet measured in Clarks' shoe stores are being measured by 3-D cameras first used in tank warfare.

In the wake of the Concorde crash in 2000, Qinetiq has devised a system, Tarsier, to look for debris on runways.

A system used to detect mines buried in mud has been applied to a device to measure the heartbeat of unborn babies.

The firm still has its fair share of government work - testing new military hardware for the government - but sales have soared in North America, with heightened security raising demand for products such as airport scanning and border control devices

Employing more than 13,000 people at locations across the UK, Qinetiq has clients ranging from the Pentagon to jet engine firm Rolls-Royce and credit card company Barclaycard.

Hi-tech products include signal processing systems, materials to sound-proof helicopters, as well as stealth technology developed for fighter jets.

Secret of Q's success

Qinetiq's brainier staff - some of them formerly government scientists - and Carlyle's good management have put Qinetiq where it is today, says defence analyst Paul Beaver.

"When you have that vast array of brainpower, you can turn it into all sorts of things."

Crucially, very few firms can do the things that Qinetiq can.

"They are virtually a monopoly. Very few companies have their capabilities. It is because we, the taxpayer, paid for it," Mr Beaver believes.

And it is this that lies at the crux of the NAO report - should the taxpayer have profited more from the sale of government-funded expertise?

But the tricky thing for Qinetiq going forward will be how it can sustain its growth.

"If they decided they want to go into industry, they will upset clients who use them as a commercial research house," says Mr Beaver.

Their growth in the US may shut off some potential markets, such as China.

"The world is not completely their oyster," he feels.

The world may not be big enough for Qinetiq but as Q told Bond in the World is Not Enough: "Never let them see you bleed and always have an escape plan."

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