Outlook: Business already has the knowledge

PETER MANDELSON asks us to put aside our cynicism and embrace his vision of the "knowledge-driven economy" with the same gusto that accompanied its unveiling in the House of Commons yesterday. The problem is we have been here before - with Lord Young a decade ago, with Michael Heseltine in the more recent past and just a month ago with the Chancellor, who appears to have stolen much of Mr Mandelson's thunder in his pre-Budget statement.

David Young turned the Department of Trade into the Department for Enterprise and Hezza invented a veritable cottage industry in competitiveness White Papers, benchmarking and all. Now they have transmogrified into the present Secretary of State, who has borrowed liberally from his two predecessors, stuck the word "digital" in front and made it sound all terribly sexy and New Labour.

The truth is that for all the Faraday Partnerships and Technology Champions schemes, there is precious little new money behind Mr Mandelson's initiatives (for which we should perhaps be thankful). Nor is there as much original thinking as nine different press releases and three separate reports would have us believe. Some of the ideas are positively dangerous - such as easing the restrictions which prevent bankrupt businessmen jumping back into life. And some sound dangerously contradictory - like promoting competition as the main driver of modern, efficient markets on the one hand and then urging firms to collaborate on the other. Any businessman with a good idea that makes money is going to want to keep the secret to himself.

But on the whole the confection served up yesterday is fairly harmless. Putting Lord Sainsbury in charge of the drive to create more biotechnology "clusters" (another of those Mandelsonisms) seems as good a way as any of keeping him out of trouble elsewhere.

But the best thing governments can do to encourage greater competitiveness is to stop interfering with the way business operates and, where ever possible, to deregulate, liberalise and reduce the burden of state inspired red tape.

Unfortunately, at the same time as Mr Mandelson is pledging to work with the grain of business, his government is tieing industry up in even more knots - the minimum wage, fairness at work legislation and now the stakeholder pension proposals.

To be fair to Mr Mandelson, his approach is as much about changing attitudes and changing culture, which, in Britain, remains ambivalent, if not hostile, towards entrepreneurship. Mr Mandelson is dead right to want to encourage a sea-change in attitudes. The problem is that this is a process which takes decades, rather that one, or even two parliamentary lifetimes.

But maybe, just maybe, the times are indeed a changin'. A recent survey of youth attitudes showed that most aspired to be millionaires by their mid-thirties. If the entrepreneurial dam is about to break in a way that this finding suggests, then Mr Mandelson could be riding the wave at just the right time.