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Podium: We are the land of Lara Croft

From a speech by Lord Sainsbury of Turville, the Minister for Science, to the Social Market Foundation

David Sainsbury
Tuesday 01 December 1998 00:02 GMT
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I WANT to begin by stating a principle which was expressed in typically provocative terms by Professor John Kay a few years ago. Kay remarked: "The focus of industrial policy should not be on what we do worse than other people, but on what we do better."

Kay gives many examples of areas in which national competitive advantage seems to have been built - fitted kitchens in Germany, financial services in London and Manhattan, automobiles in Japan, the knitwear producers and shoemakers of Italy - and asks why this has been the case. The most important reason is the opportunity which clusters of firms provide, once a critical mass has been established, for the growth and transfer of skills and knowledge within the sector. "It is on success in creating the networks which facilitate these exchanges that many competitive advantages in today's world depend." Kay concludes.

The competitive strength of each firm within the network derives from the knowledge base to which all contribute and have access. Some aspects of the knowledge base relevant to a particular activity are, of course, specific to that activity, but many are not, and the most important of such non-specific skill bases lies in scientific and technical training.

The levels of scientific education and achievement in British universities are as high as any in the world and this is reflected in the success of British firms in industries which depend on elite science, such as pharmaceuticals, defence electronics, biotechnology and computer software. In these areas, once the product is designed, it has for practical purposes been made. Where, by contrast, countries such as Germany and Japan stand out, is in the technical capabilities of workers further down the ability spectrum. The first thing we need, therefore, in designing policies to enhance competitiveness, is to have a clear idea where our competitive advantages lie. We can then build upon them.

The problem with industrial policies in the past is that they have pursued the opposite of Kay's dictum. British industrial policy was based not on picking winners, but, perversely, on picking losers. Losers that we would have liked to be winners. Attempts to revive British Leyland, for example, through state intervention turned out to be a sorry failure, and predictably so.

But while we should not seek to pick winners, we at the DTI should be vitally concerned to back successful British companies.

The list of Britain's leading sectors is not particularly controversial. They include pharmaceuticals, chemicals, telecommunications, hydrocarbons, biotechnology, electrical engineering, computer software, financial services - all unequivocally knowledge-intensive activities.

It is too often said that we are not good in this country at technology transfer, but we have, in fact, been good at the transfer of elite science to the pharmaceutical, aerospace and biotechnology industries. In many of these new industries we have a strong position in world markets - an advantage we must be careful not to throw away.

For too many people, Britain has a proud heritage. We invented the steam engine, the jet engine, the Hovercraft. The names of Newton, Darwin, and Faraday are known world-wide. Our promotional activities tend to cement this view by plumping for the safe option - Stephenson's Rocket rather than the Psion Organizer.

We need instead to build up knowledge among trading partners of contemporary British hi-tech achievements. The Millennium Products activity is useful here, in showing that the UK is still at the cutting edge of design and technology. We need to show that Britain is the home of Crick, Hawking and Dyson, of world-beating, hi-tech companies such as Oxford Instruments, BP, and Glaxo-Wellcome, and of break-out discoveries such as Dolly, monoclonal antibodies and optical fibres.

I want people when they think of this country to think of such scientific achievements as Thrust, the first supersonic car, rather than Stephenson or Faraday.

I want "Lara Croft" of Eidos's Tomb Raider computer game to be an ambassador for British scientific excellence.

With other themes relating to "the knowledge economy" - education, competition policy, infrastructure - the approach does indeed represent a "third way" industrial policy, one in which government assumes an enabling rather than a directive role.

A government not blinded by the white heat of technology, or interested in picking winners, but concerned with a competitive framework.

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