UK: INNOVATING FOR WEALTH CREATION.

UK: INNOVATING FOR WEALTH CREATION. - The Government must set clear priorities for its R and D investment if it is to remedy deficiencies and get a good return for the nation.

by Brian Eyre.
Last Updated: 31 Aug 2010

The Government must set clear priorities for its R and D investment if it is to remedy deficiencies and get a good return for the nation.

In a speech last summer on the forthcoming Science and Technology White Paper, William Waldegrave, Chancellor of the Duchy of Lancaster and the minister responsible for science and technology, listed several key questions on which he was seeking views. Particularly pertinent were: why does the UK seem to be less successful than its competitors in bringing inventions to the marketplace and why is this the case in some industries more than in others?

These and the other questions raised by Waldegrave reflect a widespread concern about the decline in the UK's industrial base, particularly in the manufacturing sector. The importance of industry in underpinning the UK economy has also been highlighted by the prime minister. Furthermore, the Department of Trade and Industry and the Confederation of British Industry have recently launched a joint initiative promoting the importance of innovation in industry.

The concern the Government has expressed and its implied willingness to play a part in rectifying the situation is very encouraging - provided this results in effective action. The Government invests £5 billion per annum of taxpayers' money in research and development in the defence and civil sectors. It is fair, therefore, to expect government investment to provide a good return to the nation. One area where this is particularly important is in the training of prospective engineers and scientists in our universities and other higher educational institutes.

Despite the overall decline in funding, we are still among the world's leaders in innovative technology in many fields. Certainly our relative lack of success in marketing innovative technology is not because our engineers and scientists lack good ideas or because our research and development is not of the highest quality. The real problem is that we have not been more competent in translating these achievements - especially from government-backed research in our universities and national laboratories - into successful, commercially-viable products and services.

This brings me to a key point in the debate behind the White Paper, namely, that the main motivation for government funded-research and development should be wealth creation, rather than intellectually-driven curiosity (so-called blue skies).

While I do not deny that there is an important role for blue-skies research (which must be based on backing highly talented people), I feel strongly that wealth creation should be the dominant consideration in deciding priorities for support. This does not mean that the focus should only be on short-term objectives, or that the Government should adopt a highly prescriptive approach in deciding what to fund. History has shown that government attempts to select and back winners have often resulted in failure.

Adopting wealth creation as the main objective means backing research that is aimed at realising commercial goals. It is important that the Government has a clearly-defined framework for such an investment programme.

This framework must be agreed in partnership with industry - not just with the relatively few large and successful companies who already have an effective voice at the highest level, but also with the many thousands of smaller companies that form such an important component of our industrial base. This, of course, will not be easy and will require much more effective communication than currently exists.

While the successful exploitation of our innovative research is clearly important, we should also not ignore the need, particularly for the SMEs (small and medium-sized enterprises) to exploit existing technology more effectively, whatever its source. Such companies often have limited resources and require cost-effective means of obtaining access to technology transfer.

Considerable expertise already exists for building such interfaces, particularly in the IRTOs (independent research and technology organisations). AEA Technology, for example, has extensive experience of working with both academia and a wide range of companies through training programmes, as well as through specific contracts and joint ventures.

Although there is much to do to improve and widen this interface with the Government on a national basis, I have preferred to focus on the importance of the Government's role in promoting its investment in R and D, having been stimulated by the debate on the forthcoming White Paper.

Nevertheless, this should not detract from the fact that industry has a key responsibility to do much more to invest in and exploit new technology. But the Government is certainly the major player. It does need to set clear priorities for its investment and it does need to co-ordinate the various elements of this investment across department boundaries more effectively.

We must hope that the White Paper addresses these key issues and is able to point the way to overcoming the present deficiencies. Waldegrave's questions elicited a huge response. This reflects the importance we all attach to the above issues and shows how much our expectations have been raised by the White Paper.

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