Links that boost Pace of change

Technology: using strategic alliances, our leading maker of satellite receivers aims to stay on the cutting edge into the next century

When last month a group was launched to develop the sort of technology required to bring alive the future envisaged in the Government's White Paper on digital terrestrial broadcasting, the names of most of those involved were predictable: the BBC, the ITVA, Channel 4, BT, Sony, Motorola, and National Transmitters, the transmitter organisation that was part of the IBA until it was sold off by the Government. Less well known was the eighth member of the group, a consumer electronics company called Pace Micro Technology.

In fact, though, Pace is firmly in place at the cutting edge of broadcasting technology. Having ridden the satellite television wave, it makes one in three of all satellite receivers sold in Europe and 50 per cent of all those in Britain. This has helped it achieve turnover of more than pounds l00m in the last financial year and taken it to fourth place in the Price Waterhouse Middle Market Award for Britain's fastest-growing private companies compiled in association with the Independent on Sunday.

It is now hoping that the next generation of television technology will give it the same sort of boost, and has formed a joint venture with NTL, the transmitter company, with the aim of developing some of the equipment that will enable this revolution to come into being.

Strategic alliances of this sort are a characteristic of the company, founded 13 years ago by Barry Rubery and David Hood.

It got involved with Ferguson, another electronics group, in producing equipment for converting satellite signals into something that a television receiver could understand, and is now looking for other partners to help it exploit what is coming on offer in the coming months and years.

"Clearly, there's a revolution about to take place in television broadcasting. Some of the time the skills that will be needed to produce the sort of product from the year 2000 onwards are skills that we don't already have," said Mr Rubery, adding that the company was in discussions with a number of organisations that could complement what Pace and NTL were doing.

It has also formed links with overseas distributors and manufacturers, particularly in the Far East, where such deals can help ease tariffs and import curbs.

Although connected, this is some way from the company's origins in 1982 as an importer and distributor of computer software. Mr Rubery and his joint managing director, Mr Hood, were friends working,in shipping and television rentals respectively when they decided to exploit the shortage of both software and knowledge about it for the Apple 2 computer. From there they moved on to perform a similar function for the BBC Micro before producing a modem to enable computers to communicate with each other via a telephone line.

Then in 1987 Pace, which is based in Shipley, West Yorkshire, launched its first satellite television receiver and began the move into that sector. It has reached the point where Mr Rubery can claim that "one of the reasons why we've got such a large business in satellite television receivers is because it's really all we do."

He says: "We specialise in it. We're not a consumer electronics company that manufactures all sorts of product. We're able to give it 110 per cent attention."

Constantly on the lookout for new products, Pace devotes about 30 per cent of expenditure to a research and development team of about 100. Mr Rubery is the first to admit that this would probably not be possible if the company was floated on the stock market.

"I've got no doubts that if we were a public company, we'd spend so much time looking over our shoulders to make sure that the shareholders are happy that we wouldn't have time to run the business," he said.

Acknowledging that this was a particular problem for high-technology companies, he said that Pace did not need a stock market flotation, since it had been able to fund itself from profits since the mid-1980s.

A further advantage is that Mr Rubery and Mr Hood are able to retain control over dealings with customers - Mr Rubery's speciality - and development of products, which is Mr Hood's area. "I'm convinced that the hands-on approach is key," Mr Rubery said. "The people at the top are in a position to make decisions. The most important things are products and customers - neither of us has to go down a long process to, say, cut a price by about 2 per cent or include a new feature in a product."

Still friends after knowing each other for 25 years and being in business together for half that time, they have organised the sales, marketing, and financial teams so that they have the time to devote to their respective areas.

So far the approach seems to have worked. Turnover is about pounds 120m and this is expected to more than double by the end of next year, while the number of employees has grown from a handful to more than 800 now.

Who would want to bet against Pace taking the lead in whatever fresh form of broadcasting technology appears on the horizon?