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Innovation Policy

Thank you, Mr. Atkinson. I shall obey your ruling. First, I welcome the Minister to his position—particularly because he is a Member of the House of Commons. Although I much admired his predecessor, he sat in the other House, which meant that debates in this House on science or space were less well informed. I am sure that they will no longer be like that. I shall provide the Minister with one memory from when I was Minister for Science and Technology at the Department of Trade and Industry. I was about to give a speech at the university of Durham, but the vice-chancellor misread the agenda and announced the speech that the person after me was to make on catalysis and its impact on industry. I could not remember what I knew about catalysis and its impact on industry, so after pausing for breath and thought, I said, ““I’m from the DTI and I’m here to help,”” and someone in the audience said, ““That’s an innovation.”” Early on in my ministerial career, I learned what innovation was. I largely agree with the hon. Member for Norwich, North (Dr. Gibson), although at Coventry City football matches we do not discuss endogenous growth theory. It obviously means that among my local support, I am less elevated than the hon. Gentleman. Let me focus. First, the international challenge is no longer about outsourcing, but about the knowledge economy that is obviously growing in countries such as India and China in particular, although other Asian countries are catching up rapidly. The battle is not only to produce engineers and scientists of quality, but to make the UK an attractive place for them to work. We must attract them to this country. Secondly, we must change the culture in this country so that it is much more receptive to those people who make the knowledge economy possible. One bizarre characteristic of this country is that we love new gadgets and applications and we want instant solutions to complex problems, but we do not admire as heroes the people who make it possible—the engineers and the scientists. We must therefore have people with skills in this country. I do not have time to go into the problems in education, but the Prime Minister admitted in a speech in November that the Government have not succeeded in securing the right scientific output from schools. That is a serious problem—the present Government did not create it, but they face it—which has a knock-on effect for universities: they do not have the right mix of people. We must work out how to encourage more young people to study science, engineering and computational subjects, including mathematics. My third point, which the hon. Gentleman picked up, is that in this country, the people who admire scientists tend to admire them because they work in blue-skies areas and make discoveries. The problem is that we do not have the same esteem for people who turn a discovery into an application. The Minister must consider the research assessment exercise and work out how a bibliometric approach that values publications and citations can be adjusted to value departments with a good track record of turning a discovery into an application. Such work is usually multidisciplinary, taking place not only within one institution, but between different institutions. I have been doing some thinking for the Conservative party, which is not a contradiction in terms, despite the fact that in our last election manifesto, we did not mention science. That was our mistake, and we are now doing some serious thinking. My hon. Friend the shadow Chancellor said in an article in The Daily Telegraph on 22 November:"““We are broadening our approach to boost innovation, encourage science””," as part of remaking our economic policy. Hooray! It is in the national interest that we all take an interest in those subjects. My committee has made two proposals. First, we should use smart public procurement, which the hon. Gentleman mentioned. The figure for Government purchases is about £150 billion, against an Office of Science and Innovation budget of £3.4 billion. We should also use set-aside, which the Americans use, so that small and medium-sized companies benefit from Government procurement. Our second idea is for an innovative projects agency. I was delighted when, on 30 November, the Financial Times said:"““It has been one of the big ideas of 2006… the re-emergence of serious thinking about research and innovation in the Tory party””." The reality is simple. Many of the things that the hon. Gentleman mentioned and those in the Department’s documentation are so spread out that they do not make a collective impact. Many are based on a linear approach to knowledge transfer, which is not appropriate for most of this country’s industries, excluding perhaps the pharmaceutical industry. Another problem is that the hon. Gentleman and the Department push at the supply side, whereas I want to emphasise demand pull. We have suggested the innovative projects agency, which would have a budget of £1 billion taken from existing sources, so I am not promising vast sums of new money. When one looks at the figures, it is interesting to consider the regional development agencies, for which I do not have a high regard. I think we could do a lot better: perhaps the best people from the RDAs could work with the innovative projects agency. The RDAs have several hundred million pounds that could go towards the agency’s budget. Some of the DTI’s activities could be transferred to it, and the technology strategy board, which has a budget of £178 million, would be absorbed, too. Those are key ideas that would help people in this country to collaborate to ensure that ideas are taken from discovery to application—obviously, that application would be commercial. I am enthused by those ideas, and I hope that the excitement resulting from a big initiative that we propose would permeate society more widely. It is essential that British people see that scientists and engineers can provide solutions that help to improve quality of life. That would be a great innovation in itself and it is one of the challenges that we all face.