Oral statement to Parliament

Our Hi-Tech Future

Economic Growth Growth is the Coalition’s highest priority for 2012. It is going to be a year of serious economic challenges. We are better…

Economic Growth

Growth is the Coalition’s highest priority for 2012. It is going to be a year of serious economic challenges. We are better prepared for them than most because we took tough decisions on the deficit early on. We have set out our plans for getting a grip on public spending and we are sticking to them. That will enable us to bring down the enormous deficit we inherited.

Sorting out the mess in the public finances itself helps get the economy moving as it helps to keep interest rates low. But that is not the whole story. There are a host of ways in which the Government is supporting growth by raising the performance of the economy: cutting red tape, a tax and benefit system that rewards work, high quality education and skills, reforming the planning regime so that our new infrastructure can be built expeditiously. George Osborne and Vince Cable are driving forward such an agenda across Whitehall in the Growth review.

That list of our growth policies applies horizontally across most sectors of the economy. Investing in energy or transport or better schools is a good thing without taking any view about whether the future of our economy is manufacturing or life sciences or financial services. There is widespread wariness of so-called “vertical” policies that focus on particular sectors and technologies and it is very understandable. The more specific the return, the greater the chance that it can be financed privately. Moreover, we fear governments do not have the knowledge to back particular technologies and have made a mess of such policies in the past. Governments picking winners can easily become losers picking Government programmes.

Recent British Governments have therefore preferred generic growth policies rather than vertical ones which focus on particular sectors or technologies. These are essential foundations but it only takes you so far and today I want to show how much further the Coalition is going and why. Soon you find that you are having to take some kind of view about specific sectors and technologies too. Which source of energy do you encourage? When it comes to transport which places do you link up and why? The Jubilee line extension has been great for London but I well remember how its original impetus in the 1980s came from the need to provide access to Canary Wharf: if it had been a link to a manufacturing centre not office blocks for financial services it might have been seen as a much more controversial example of industrial policy. We have achieved an extraordinary surge in apprenticeships but I am struck by how many commentators believe they should be in particular sectors such as engineering or life sciences: indeed part of the appeal of apprenticeships is their historic association with such sectors.

Governments find themselves making decisions about allocation of resources and we should not pretend we do not. The Coalition’s pledge to rebalance the economy depends on taking such a view. Indeed when money is tight these type of decisions are even more acute. And in the rest of this speech I want to set out how we do this in our strategy for the UK’s science and research base and how it can help generate high tech growth.

People do of course ask: “So where is the growth going to come from?” Nobody can know for certain. But that does not mean that we do not have the faintest idea. A lot of it will come from our established, high performing sectors which continue to innovate and improve productivity. We can discern already some of the scientific discoveries and technologies that will shape our future.

Today I want to set out what we are doing to secure this future for us and I am grateful to Policy Exchange and the Campaign for Science and Engineering (CaSE) for the opportunity to do so. This tackles that deep-seated anxiety about the prospects for the younger generation in the global economy of the future.

When you ask people what worries them most it is that their children will not have the same kind of opportunities in life as we have had. I understand that fear - indeed I wrote a book about it. But our great national assets - our universities, our science facilities and researchers, our extraordinary accomplishments in the arts and humanities - are the best single hope for making our way in the high-tech world of the future. They might not solve all our economic problems next year, though they can help even with this. But if properly nurtured they can ensure that Britain will be up there as a leading location for research in the physical and life sciences and beyond. Britain can be the preferred location for companies’ R&D. We can have world-class industries using cutting edge technologies. We can have a prosperous future with a role in the world.

Our research base

Our research community is the most productive in the world. In the words of the recent Elsevier report, “The UK is the clear leader among all eight comparator countries (Canada, China, France, Germany, Italy, Japan, UK, US) on citations per unit spend on Gross Expenditure on Research & Development.” With 3% of the world’s researchers, we generate 6% of the world’s academic articles, 11% of citations, and 14% of the most cited papers, second only to the US. Quite simply we have more articles per researcher, more citations per researcher and more usage per article than researchers in US, China, Japan and Germany. We can be proud of this achievement.

It is very broadly based too. The Elsevier report states: “ Relative to the world average, the UK has generally a well rounded portfolio, with a strong and increasing emphasis in clinical sciences, health & medical sciences, social sciences, business and humanities.” They identify no fewer than 400 research areas where we have a distinctive research strength, and many of them are world-class.

It is quite extraordinary for an economy of our size to have strength in so many different areas. No other country of our size has achieved this. It is particularly important as so much research is increasingly interdisciplinary. Our goal is nothing less than to ensure we have a continuing presence in the key areas of scientific research. We should not have the illusion that we can lead in all the scientific and technical advances of the future. But such chauvinism is unnecessary. What we can aim to have is the absorptive capacity to understand and draw on scientific and technological advances across disciplines and across the world.

This broad research base emphatically includes the arts, humanities and social sciences. They are all part of the science and research ring fence. Increasingly for example research in the physical sciences is linked to human behaviour - not just designing a low carbon vehicle but understanding what makes people choose to drive it - or not. In allocating research funding I have therefore followed the advice of the learned societies and others that we should not shift the balance of funding between the main disciplines. Eric Schmidt of Google caught the mood in his MacTaggart lecture when he said that this arts v sciences debate really ought to be dead and buried and instead we should recognise how complementary they are. I like the idea that instead of just thinking about STEM, Science, Technology, Engineering, and Maths, we should add the Arts so it becomes STEAM.

One reason our research is so good is that ministers have so little scope to interfere. Our science and research programme budget of £4.6 billion is not just protected in cash terms, it is also protected by the Haldane principle that Ministers do not decide on funding for particular research projects or particular university departments. It also rests on the gold standard of peer review. We are talking here about free enquiry where you are judged by your peers not by the minister for science nor the government as a whole nor by academic patronage.

This last protection is underestimated. We do not have a baronial system in which ageing professors dispense posts and patronage and younger academics have to defer to them for decades as they patiently wait their turn. One reason why so many young researchers from across Europe choose to work in the UK is that opportunities for them are much greater here. We will continue to support and monitor the compact on conditions for young researchers, especially women for whom the requirement to be mobile around the country with little allowance for family responsibilities can be particularly onerous. I welcome the latest initiative by HEFCE to make better allowance for maternity leave in assessing researchers’ output for the Research Excellence Framework.

We must continue to sustain our research base in tough times. If you look at the decisions the Coalition has already made you can see how committed we are to science and research. In fact I can confirm the Government’s aim is quite simple if very ambitious: it is that we should be the best place in the world to do science. This ambition is about more than money. It is about respect and celebration of the spirit of scientific enquiry with everything from world-leading science journals and lively science writing to world class museums and events. It is something Government has to practise too with science advisers in every department, the Foresight horizon-scanning enquiries of the Government Office for Science and evidence-based policy drawing on latest advances in science such as behavioural economics. It also means:

  • Tackling the pernicious effects on scientific enquiry of the current law on libel.

  • Continuing to keep our country open to leading scientists who wish to work here and making a big contribution to global science projects such as managing the Square Kilometre Array and the key role of our scientists in CERN and in the JET and ITER projects for nuclear fusion.

  • An ever wider interest in science with growing attendance at our burgeoning science festivals and Fairs, extensive coverage of science on the BBC and the media more widely.

  • More students doing science at school, college and university, with new science departments opening as Lancaster University are doing in Chemistry.

  • Imaginative exercises in citizen’s science such as Galaxy Zoo which started in Oxford with volunteers classifying new galaxies.

  • World-leading Learned Societies such as the Royal Society, which has just celebrated its 350th anniversary and a network of leading charities such as the Wellcome Trust and Cancer Research UK backing scientific research and enquiry.

It does of course also mean proper funding for science and research. I realise that there are always pressures for more and we cannot afford to do everything we would like to do. Nevertheless, as countries around the world face budget pressures, our ring- fenced cash-protected science and research funding budget is a good settlement in tough times.

The breakdown of current spending is between four main areas roughly as follows. £1.6 billion goes direct to universities in recognition of research excellence. £150 million goes through Higher Education Innovation Funding to reward universities that have knowledge exchange with the wider world, especially contributing to economic growth. £100 million goes direct to the Learned Societies (the Royal Society, the Royal Academy of Engineering and the British Academy) to fund leading researchers and also make small grants for particularly worthwhile research projects.

The Research Councils and the UK Space Agency between them spend the remaining £2.75 billion. The Research Councils divide this into two main categories - responsive funding and directed funding competitions. They estimate that about two thirds of their funding is in responsive mode and a third in directed mode. The directed mode focuses on the grand challenges such as energy, living with environmental change, our ageing population and lifelong health and well-being. Blue skies research can however be covered by both categories - our contribution to CERN is directed to a very specific project but is also pretty fundamental. And Research Councils do respond to bids for funding for some quite applied research.

Research Councils devote a lot of time and effort to identifying significant ground-breaking areas of research that they should support. They scan the horizon to try to ensure we have a coherent and broad research base in this country. They work with business and Government to identify these priorities. But there comes a point when the Research Councils have to think about impact and priorities. I know this is controversial - and I do receive mass letters from aggrieved sections of academia who fear the Research Councils have failed to recognise their special significance. But it has to be done and the Councils try to do it in an open way that commands the consent of the research community they serve. We must never end up in the position where an individual researcher with a novel idea judged to be of real academic merit is excluded from funding just because it does not fit some preordained plan.

Today I am releasing reports on the impact of this Research Council funding. We are familiar with how American research funding helped with the creation of great American businesses like Google. But we have similar examples here. The UK’s largest software company, Autonomy, was started by Dr Mike Lynch at Cambridge University in 1996 based on work conducted during his PhD supported by the Engineering and Physical Sciences Research Council in the UK. Autonomy was sold to Hewlett Packard in August 2011 for over £7 billion. The EPSRC have just been recognised by Proctor & Gamble for their globally best in class support to P&G by a government body. Innovations in solar energy panels and offshore renewable energy are being supported with substantial research funding.

  • Impact doesn’t just mean commerce. Professor Theo Farrell, an ESRC/AHRC Fellow undertook an assessment of the British Army’s performance in Operation Moshtarak, a 2010 offensive to clear the Taliban from central Helmand Province in southern Afghanistan. The resulting classified report was briefed to Army chiefs, and has informed doctrine development and pre-deployment training.

Our ring-fence protects research activity. When money is tight we had to give current spending on activity high priority. That is one reason why for the first time the ring fence includes the main forms of current spending on science and research. But the ring fence excludes capital as there is some discretion in the timing of major capital projects. The Government does however understand the importance of investing in science capital as is shown by George Osborne’s excellent decisions over the past year to invest a further £470 million in science capital in top of our original plans. That will go on new facilities, the e-infrastructure needed for world class science, and the further development of our National Campuses at Harwell, Daresbury, Norwich and Babraham. This will bring together world class facilities and researchers and the companies that can benefit from them - contributing further to our high value added growth agenda.

Much of the money from the Research Councils as well as from other sources flows to our universities. In some countries like Germany research tends to happen outside universities - in their Max Planck institutes for example. We have our own outstanding independent research institutes as well, from the Institute for Fiscal Studies to the Institute for Animal Health. The new Crick Institute will be a world leading centre for life sciences. But by and large publicly funded research in Britain is likely to be conducted in our universities. That in turn puts them at the heart of our high tech agenda. Only the other day Professor Eric Thomas, the President of UUK, perhaps influenced by too many Dickensian Christmas cards, told me that if the British economy has been a stagecoach stuck in the mud then our universities are one of the horses that can pull it out. He is absolutely right.

We currently have 12 universities in the top 100 and 32 in the top 200 according to the Times Higher Education rankings. It is 19 in the top 100 and 30 in the top 200 according to QS. And in the Shanghai rankings it is 10 and 19. The exact numbers and individual universities vary according to the different weighting in the different schemes. But all the university rating agencies agree that only the US does better than we do. Today I set our ambition of aiming for the number of our universities in the top 100 to grow. When you look at our relative weaknesses in these league tables it tends to be teaching and external income. These are the areas where we need to raise our game even more. We are not managing decline we are investing in success. A crucial reason for our controversial changes to the funding of teaching in universities is to ensure they remain well funded even when money is tough. There is no more fair and progressive way of financing university teaching than to expect graduates earning over £21,000 to pay back for it.

We are fortunate in having one of the strongest networks of universities in the world. Part of its dynamism has been the ceaseless process of creating new institutions as well as the capacity of existing institutions to grow and develop. University College London was created as a secular alternative to the Oxbridge duopoly. Then we had the great civic universities, the Colleges of Advanced Technology, the plate glass universities and the polytechnics. We have also had new research institutes, campuses, and science parks. That process of creating new institutions should not stop even when times are tough and there is no spare public money. We have to bridge the gap between limited public funding and continuing strong demand for higher education and research.

Globalisation is still at its early stages when it comes to Higher Education. The next round of new institutions may well link existing British universities with international partners. The surge in international investment in science and technology would make this a key part of the mission of a new foundation. It might be that today’s institutions propose a new campus or a new international partnership. Or it might be new providers wanting to enter with different models. Today I can announce therefore that the Coalition is inviting proposals for a new type of university with a focus on science and technology and on postgraduates. Local economic partnerships, universities, businesses and international partners can come together to put forward proposals for new institutions.

There will be no additional Government funding. This time we will be looking to private finance and perhaps sponsorship from some of the businesses that are keen to recruit more British graduates. For example, we will not be diverting funding from support for undergraduate students. It is an opportunity to seize the new freedoms which we proposed in our White Paper last year. We already have a lot of interest and we want to move this to the next level. As proposals are developed we will be able to identify any specific obstacles that need to be removed including by legislation where necessary. A major city might wish to offer a site as Mayor Bloomberg has just done so successfully with his competition for a new graduate school in New York. We will be discussing with the interested organisations how best to carry this initiative forward. I am confident that with ingenuity we can grow our research base and our universities even when times are tough.

Linking the research base and the wider economy

There is enormous scope for universities to go further and build even stronger links with the wider economy. They are after all at the heart of the innovation clusters which will drive our economy in the future. Their external income has increased to £3 billion. But there is more we can do.

We have our own challenges. We have relatively low rates of paper co-authorship between industry and academia. We generate just 2.2% of global patents. Business spend on R&D, at £16 billion, is low as a percentage of GDP. This problem has been debated for a long time. The great economist Alfred Marshall wrote in 1919:

“the small band of British scientific men have made revolutionary discoveries in science; but yet the chief fruits of their work have been reaped by businesses in Germany and other countries where industry and science have been in close touch with one another.” (Alfred Marshall, Industry and Trade).

We are tackling this age-old problem that we are good at generating great ideas in our universities but less good at turning them into the products and businesses of the future. And we can point to successes such as ARM, Autonomy, Rolls Royce, GSK Jaguar Land Rover and many other companies which have exceptional links to our universities. But we need more of them.

We are reforming IP and backing open innovation in our universities. We are liberating them from the idea that the only measure of their contribution to the wider economy is setting up a tech transfer office and then counting patents. We are extending Innovation vouchers to encourage more small businesses to draw on the resource available in our universities. There is still untapped potential in universities that can be drawn out by organisations like Imperial Innovations or Isis Innovation. I can announce today that our ambition is for university knowledge exchange income from external sources to grow by 10% over the next three years.

The classic model expects venture capitalists to be following what is happening in universities and to invest in the IP after the university has spun out a company. This is the conventional sausage machine and it can work on some occasions but it is not widespread or straightforward. We have expected venture capital firms to finance early stage start-ups much further upstream than is realistic. Then we beat up on ourselves that our venture capitalists do not take risks they do in the US when even there the model is rather different.

In the US Federal funding comes from a wide range of agencies - the National Institute for Health, the National Science Foundation and of course DARPA, the Defense Advanced Research Projects Agency. They can support research closer to market than Research Councils do. What Americans mean by defence is whatever is necessary for national greatness including ensuring a capacity in any blue skies technology. And then the SBIR the Small Business Innovation Research programme means American start-ups have a chance of getting Federal contracts for their innovative products even as they are still developing them. All this means that you can get federal funding to see you through from idea to product. This eases the pressures on venture capitalists. America does have a much bigger venture capital sector and it is a great advantage to them. But we should look behind the rhetoric at what has been called America’s “ hidden developmental state” explained here by Professor Mazzucato. The land of free enterprise has an innovation and research system which depends on federal and state government just like everywhere else in the Western world.

The Technology Strategy Board bridges this gap between the Research Councils’ funding for activities in universities and fully commercial development by business. They are working with Research Councils and aligning their funding where that is possible. A crucial weapon in their armoury will be Smart Awards which provide proof of concept and proof of market funding for businesses, then support for the further development of prototype products. Often SMEs are caught in a Catch 22 dilemma where they cannot leverage investment until they have this proof but they haven’t got the relatively small sums you need to pay to get the proof. It was David Young who first introduced Smart Awards in the late eighties to bridge this gap. They were very successful. The very achievement of getting a Smart Award was a signal to perhaps an angel investor that this was a project worth investing in. Under the last Government they were dissipated amongst different RDAs and lost their brand name. Now we are bringing them back as a nationwide scheme run by the TSB.

These Smart awards span all sectors. But as well as these broadly based schemes we also have to spot specific areas of scientific and technological advance. Nobody can know for sure what are going to be the big technologies of the future but that is not a reason for inaction. Let me now explain the three stages of our high tech policy as we look out for the future prospects.

Identifying key areas of scientific and technological advance

There is a big difference between business sectors and technologies. They overlap but are not the same. We have some crucial business sectors that are seen as high tech - such as aerospace or space. We also have perhaps less glamorous business sectors where innovation is increasingly important - delivering social care, agriculture, utilities, transport and distribution.

Part of Britain’s weak productivity performance has been low levels of investment and innovation in some of these sectors. But they can be transformed by absorbing new technologies - the warehousing and distribution of goods around the UK has been transformed over the past twenty years by new IT systems. Increasingly satellites and space-based systems will transform the accuracy of the spreading of fertiliser and patterns of planting in agriculture. These changes will happen not as the result of technologies developed specifically for say the agricultural sector but as a result of the application of technologies developed elsewhere. They may well be general purpose technologies that spread widely across the economy as electricity or satellites or the internet have done. We need to judge the technologies that will matter in the future. We may not get it right - we won’t always - but we have to try. We are not picking individual business sectors but Government is backing the development of specific key technologies.

In the US they developed a neat way of summarising the big technological advances - the National Science Foundation called them Bio, Nano, Info, and Cogno or BNIC for short. We have heard about the BRICs, the countries where the future growth will come from: the BNICs are the technologies it could well be coming from. This has been a theme of American science policy for over a decade now and it has generated some rather overheated debate about the possible convergence of these technologies. There may be something in this. We can see for example the “wet” biological sciences linking ever more closely with the data processing capacities of “dry” IT as a “ new biology” emerges. Other countries have conducted similar exercises. The High Tech Strategy for Germany lists the following cross-cutting technologies: nanotechnologies, biotechnology, microsystems technology, optical technologies, materials technologies and production technologies.

We did our own exercise and published the results last year in a report, “Technology and Innovation Futures: UK Growth Opportunities for the 2020s”. It was very British, inductive not deductive, listing the main areas of technological and scientific research over the next decade, drawing on consultations with the academic community. Our experts in the Government Office for Science identified 53 specific future technologies and innovations. They then put them in the following broad categories:

  • Biotechnology and Pharmaceuticals;
  • Materials and Nanotechnology;
  • Digital and Networks;
  • Energy and low carbon technologies.

Overall our horizon scanning broadly matches that of the world’s biggest scientific power. America’s Cogno and Info very roughly come together as our Digital and Networks. Unlike the US we identify a distinctive low carbon technology area so the C in BNIC could stand for Carbo instead. These lists are inevitably imperfect. They change. But they are important. They act as a check on eccentric or lop-sided decisions by making sure we have a clear overview of the main areas we need to invest in. If we are to live up to our ambitions we need coherent programmes for investing in these broad areas of research. That is what we are doing.

Judging whether to back specific technologies as they get closer to market

Then as you get closer to market you try to back in particular the technologies which have the greatest potential. This is where the TSB has to exercise a professional judgement on what to support. The TSB’s job is to help “turn today’s emerging technologies into tomorrow’s industries.”

Rigorous scrutiny of the cost-effectiveness of investment is necessary. The TSB and BIS apply some crucial tests. The key criteria for backing a technology are that we must have an academic and research presence; the business capability to develop products and services based on the technology; and a good chance of a sizeable global market.

On that basis the TSB identifies technologies where they see particular potential for the UK. Their most recent assessment suggests for example particularly promising technologies for us are synthetic biology, energy efficient computing and energy harvesting.

The TSB is also setting up a network of elite technology innovation centres, now called Catapult Centres. We have already created three, and I can announce today that the fourth will be in the area of satellite applications. This will provide business with access to in-orbit test facilities to develop and demonstrate new satellite technologies. It will also provide access to advanced systems for data capture and analysis, supporting the development of new services delivered by satellites. These could be in a wide range of areas such as distance learning and telemedicine, urban planning, precision agriculture, traffic management and meteorology.

Practical leadership from Government

Then Government can help drive forward the development and application of key technologies. I tend to follow quite a standard model for doing this because it seems to work. I first discovered it in the space sector, where a Space Leadership Council was formed in March 2010. It had been set up by Paul Drayson when he was science minister in the last Government. It has been the basis for a template used more widely in BIS - not just by me but by Vince Cable and Mark Prisk as well.

You start by convening a group which has to include leading academic researchers, Research Councils, agencies sponsoring commercialisation like the TSB and of course businesses themselves. They discuss what is happening so everyone can understand the links between the research agenda and commercial opportunities. You ask if they would like to meet again and they normally do. Then you set it up a bit more formally as a leadership council usually co-chaired by a BIS minister and someone from industry. The Council then commissions a technology road map. It is usually written by an expert advised by a group and gives a rough idea of the technological changes that the industry and researchers are expecting over the next five to ten years. So for example Professor Sir Keith O’Nions, Rector of Imperial College kindly prepared a space technology road map last year. That is a basis for everyone to take decisions on where to invest. Some of this may fall to government but business has to make a matching investment in return. That it rests on an agreed plan makes that easier.

This kind of model is being applied right across BIS. As well as in the space sector this sort of activity is also being led in for example the automotive, aerospace, and life sciences sectors. I can announce today that I am setting up further such leadership councils in e-Infrastructure and in synthetic biology. These are not instruments for ministers to impose their will on reluctant sectors. Nor are they devices to increase public spending. We act as conveners bringing together the key players and driving forward investment and innovation. Sometimes the simple fact that such a group exists increases the confidence of a key new sector.

A check list for our high tech strategy

Now let’s finally just review how we are doing in living up to the challenge of these important high tech sectors. We can work through the BNIC list.

Bio is covered by the life sciences strategy which the Prime Minister launched a month ago. It is an ambitious agenda for keeping and strengthening our position in this crucial sector. Our progress is going to be reviewed by two formidable outside experts - Professor Sir John Bell and Chris Brinsmead. But it isn’t the final word. I will continue to work with Andrew Lansley and the Treasury on new ideas for the future. So for example we announced a Bio-medical Catalyst Fund with the Medical Research Council and the TSB backing ideas as they traverse the so-called “valley of death” from research lab to commercialisation. There is £180 million of public money in this fund but it could be even bigger if we could entice some corporate venture funds in as well. That is something I want to see.

Bio is not just human health. We have great strengths in biological sciences more widely. After the elimination of Smallpox thirty years ago the UN celebrated the global elimination of a second virus last year. It was rinderpest which affects cattle and other ungulates and blighted agriculture in Africa and elsewhere. British scientists based at the Institute of Animal Health played a key role in this. We have great achievements in crop science too. At the moment we get on average about 9 tonnes of wheat per hectare. The target set by the BBSRC is to get to 20 tonnes per hectare within 20 years. That would be nothing less than a second agricultural revolution and it is essential to feeding the world as wheat provides a fifth of the calories consumed by mankind.

Synthetic biology has been driven by developments in next generation sequencing, DNA synthesis, and systems engineering. It is a potential platform technology with possible applications including bio-energy, industrial biotechnology and chemicals. I have asked leading researchers and business experts in a group chaired by Dr Lionel Clarke of Shell to produce a synthetic biology roadmap to set out the timeframe and actions to establish a world leading synthetic biology industry in the UK. They should report in the Spring after which we intend to convene a new Synthetic Biology Leadership Council to look at how we can deliver that road map.

The very term nano-technology was popularised by Federal agencies in the US. It covers a range of technologies across a range of markets. I have convened the key players to sketch out its future relevance to the UK. It is clear graphene is one very significant example of nano-technology. We are committed to establishing a Graphene Global Research and Technology Hub which will provide access to specialist facilities and expertise. TSB and EPSRC have been working together on this.

Info and cogno cover many things. The rapid growth of Tech City is a classic example of what can be achieved by sustained attention from the very top of Government. Behind it lies our national capacity in high performance computing. We were in danger of losing our position with very few of the world’s most powerful 500 computers. Increasingly research today involves handling large data sets - be it from CERN, meteorological data, the Hubble telescope, the sequencing of individual genomes, or indeed just keeping up with the academic literature itself with more than a million academic papers in the life sciences published every year. There is more to computing capacity than raw power: software matters too. So we have invested an extra £165 million to ensure our researchers have access to powerful computers and the software to harness them. We also commissioned Dominic Tildesley of Unilever to report on the significance of e-infrastructure for business. I am releasing his report today. It sets out very clearly practical examples of how business can use high powered computing. Companies like Jaguar Land Rover or Rolls Royce need to be able to model completely the functioning of a motor car or a turbine. The more you can do virtually the more rapidly you can test and introduce new products. That is why they say that to out-compete you must out-compute. We will act on his recommendation of an e-Infrastructure Leadership Council to ensure there are strong links between academic research programmes and business applications.

Then Carbo is low carbon energy. We already have sponsored research on low carbon cars. The TSB’s investment in low carbon vehicles in partnership with the EPSRC played a significant role in Nissan’s decision to base the production of the entirely electric LEAF model and its advanced batteries in Sunderland. High on our agenda now is nuclear fission and fusion after a challenging report from the Science and Technology Committee of the House of Lords. We will be considering it carefully to ensure we get most advantage from our historic strengths in these sectors.

This is a very quick review but it is clear that the Coalition is committed to a high tech future for our country and is doing everything possible to secure this future source of growth.

Conclusion

Today I have set out 8 steps to high-tech growth:

  1. set the Government’s goal that we should be the best place in the world to do science;
  2. released a series of reports showing what the research sponsored by the Research Councils is achieving;
  3. set out our ambition to have more universities in the world’s top 100;
  4. announced that we have invited proposals for new types of university with a focus on science and technology and on postgraduates;
  5. announced our ambition for universities’ knowledge exchange funding from external sources to grow by 10% over the next three years;
  6. announced that the next Catapult Centre will be in the application of satellite technology;
  7. announced that I am setting up leadership councils in e-Infrastructure and in synthetic biology;
  8. and released a new report on e-infrastructure strategy.

The critics of our economic policies focus on arguments about a short-term stimulus but what really matters is long term growth. That is what our high tech enterprise strategy is all about. Times like this have persuaded many of us that it is necessary to back the technologies of the future so that we can rebalance our economy. Every Government tries to do it. The only question is whether you recognise it and do it properly or whether you just let it happen as the aggregate of the host of decisions you have to take anyway. This Coalition, faced with the crucial challenge of sustaining growth after the deepest recession since the War, has a strategy for high tech enterprise. We can be proud of it because it is coherent, serious and rests on a commitment to the future of our country and its economic base.

Rt Hon David Willetts MP
4 January 2012

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