Carol David Daniel (pictured), head of technology transfer and commercialisation in the enterprise office, City University, London, is writing in a personal capacity.

It still beggars belief that the establishment cannot see the obvious failings in its own strategies.

When I worked in industry many years ago, the UK was awash with corporate research and development (R&D) labs that mainly did D, including Ferranti, STL, Plessey, Marconi. I worked for GEC Hirst Research for a number of years and GEC had several specialist centres or labs. All are now gone.

So what is UK plc’s strategy? For iniversity research to pick up the baton? I see a few flaws.

l Universities focus on R, not D.

l They publish everything, as the government will only give universities money if they have high-grade publications through the Research Excellence Framework.

l Who benefits from all these publications? China, the US and Germany would be a good guess.

l Universities are crap at D. At GEC I had milestones and targets to meet within budget and I had to fill in a timesheet to account for my time. I was not distracted by teaching or bureaucracy.

l The bulk of government R spending goes on a handful of universities – Oxford, Cambridge, UCL, Imperial, Southampton and a few so-called Russell Group universities; l Who is doing the D, how much is spent on it and how well are they doing it?

I put the above paradox to David Willetts, the UK’s Minister for Universities and Science, last year at one of those innovation conferences and as usual for a politician did not get a straight answer.

There are pitfalls as well as benefits in putting all your eggs in a complacent basket. If Oxford and Cambridge are so good then they don’t need taxpayers’ money to prop them up so the money can be spent on more diversification of research on a competitive basis with other universities.

Technology has been hijacked by the information technology (IT) community and media. Technology is now almost synonymous with software in the UK, all the hardware and the interfaces – displays for example – are not made here. Development of software as declared by companies, from one man and his dog to Capita, skews the D spend somewhat.

The so-called catapult centres, modelled or inspired by Germany’s Fraunhofer-Gesellschaft, have a budget of £200m ($300m) over four years as I recall. Well the Fraunhofer turnover last year was €1.6bn ($2bn). Yes, €1.6bn every year. The majority of this funding, one way or the other, either through direct or indirect subsidy, comes from the German state. Fraunhofer-Gesellschaft provides German companies with subsidised R&D but mainly D.

I recall one UK government investment in a technology centre involved a room full of bought-in computers and developers – most of the money went on the building, a saleable asset if it all goes wrong. If you want innovation that will lead to new businesses there has to be something more. However many computers and bodies you bring in, India and China will eventually match and surpass this.

Fundamentally there is a big D gap in the wider sense of technology.

Venture capitalists (VCs) in my experience are essentially bankers. They will take very little risk and secure their investment in a way that minimises their loss even if it goes badly wrong.

Because they are mainly bean-counters they have little ability to think outside the box and consider where the issues are in what is potentially a lucrative business proposition and fixing them, such as if the team is no good, bolster the team, if there is a technical flaw, get in some other technical resource or licence it in.

Waiting for thousands of business propositions to flow through the letterbox and filtering them down to a handful because they are the only ones that appear to tick all the boxes is not the way to manage this innovation process.

In addition, VCs focus on the financials, so they have little grasp of the implications of the technology, market acceptance, potential and vision without second-hand input.

So, in acceptance of this parlous state of affairs they claim only one in 10 investments pays for all the lack of performance in the other investments. If I was in this game I would be seeking a far better hit rate than that and making the changes necessary to achieve, say, three in 10.

I do find corporate venturers a little more forgiving and understanding and certainly found BP corporate venturing a breath of fresh air compared with VCs when we did the Heliex Power investment.