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Mrs. Roche: No, I do not agree with the hon. Lady. She was part of the governing party in the previous Parliament, so I am sure she was aware--indeed, perhaps she even made representations to the effect--that, at the end of that Government's deregulation initiative, they had created more regulations than they had abolished. So we will take no lectures from the Conservative party about deregulation.
Dr. Nick Palmer (Broxtowe): Those of us who have staggered out at this unearthly hour on a Friday morning are a little disturbed to find Opposition Members using a debate on innovation to trot out their well-rehearsed, discredited campaign themes. I hope that the rest of the debate will focus on the subject that we are here to discuss.
Mrs. Roche: I am grateful to my hon. Friend. I had hoped that the debate would be constructive and civilised. Even though I am in politics, I remain optimistic, and I am looking forward to the rest of this morning's proceedings.
As I was saying, at a stroke, we could reduce the paperwork that slows down companies, especially small and medium-sized enterprises. Although obvious, such things are not necessarily easy--otherwise, of course, they would have been done long ago. Nevertheless, we shall continue to pursue them; that is certainly one of our goals.
Another task that falls to the Government is the creation of a climate that encourages innovation. In the Department of Trade and Industry, that is spearheaded by the innovation unit. The unit is a mixed team of senior secondees from business and the academic world and officials. They work throughout the length and breadth of Britain. Their role is to challenge the status quo, encourage radical thinking and promote changes in culture and behaviour so that innovation becomes the norm in companies and organisations throughout the economy.
Such an approach has paid off. Examples of the unit's achievements include an improved understanding of the process of innovation, which has been widely acclaimed and adopted by both large and small companies; best practice guidelines on longer-term investment and development for use by company management and investors; and the R and D scoreboard, which is a key annual international benchmark for use by companies and investors. The unit is therefore concerned with creating the climate within which innovation can truly flourish.
Another important ingredient of innovation is looking at options for the future. We need strategic thinking--looking to the interests of industries and firms that have not yet been invented. That is why my right hon. Friend
the President of the Board of Trade announced on 23 July that she was considering the establishment of a specialist unit in the DTI. Indeed, I was very struck while listening to her recently speak about future industries. She said that our children and grandchildren would, in the next century, be working in industries of which we had not yet dreamed. I thought that that was a very graphic way of illustrating the tremendous possibilities that investment in innovation can bring.
My right hon. Friend said that she wanted us to develop a much clearer understanding of what the industries and markets of the future, and their particular needs, are likely to be. We need to avoid, as far as possible, taking regulatory decisions now which could limit or kill opportunities for the development of new ideas in the future.
Dr. Ian Gibson (Norwich, North):
Does my hon. Friend agree that another exciting initiative is the millennium products venture, in which the creativity of scientists and, especially, young people will be encouraged and rewarded in 2000? No doubt Britain will be at the forefront of some development comparable with penicillin.
Mrs. Roche:
I am grateful to my hon. Friend for bringing that exciting challenge to the House's attention. I had the great privilege of being with the Prime Minister when he launched the challenge on behalf of the Design Council. What was so exciting about that event was the range of innovation and ideas, both from some of our prestigious large companies and from some small companies. For anybody excited by Britain's future, it was a momentous event. I wish to pay tribute to the Design Council for organising the challenge, and I wish it well.
The innovation unit's role will be to build up an understanding, and to ensure that tomorrow's needs inform the thinking of today's decision makers. A steering group is also being established that will look at the barriers to growth faced by small, technology-based businesses and will co-ordinate action to remove those barriers. It will be supported by the Department of Trade and Industry, the Confederation of British Industry, the Bank of England and the Treasury, and will build on the CBI's excellent "Tech-Stars" report and the Bank of England's "Financing of Technology-Based Small Firms" report.
We hope that the steering group will take a close look not only at the problems these firms can face in raising finance but at issues such as building management teams, developing entrepreneurship and market focus and realising the potential of corporate alliances. The Department is interested in the opportunities for large and small businesses to work together for mutual benefit. All those issues are important to the growth and success of a new firm, and we look forward to practical and useful work coming forward from the steering group.
At the outset, I defined innovation as the successful exploitation of new ideas. All the words in that definition are important, and each is vital for national success. It is well known that British scientists, engineers and inventors have more than their fair share of good and creative ideas. In the past, however, we have not been so strong at turning those ideas into commercially successful products
and services that people want to buy. Anybody examining Britain's post-war history would accept that, and I believe that both the British economy and our people are poorer for that.
If we are to continue to create the wealth and employment which will secure the well-being of future generations, we need to ensure that our existing industries remain at the forefront of technical and commercial developments, and that we are in the first wave when a new industry or technology comes into being. Nothing is more dispiriting than to see good British innovation and design developed elsewhere, and the Government intend to address that problem.
The seeds for success need to be planted today, not tomorrow. Primarily, they are planted by our companies and individual entrepreneurs, seeing opportunities and moving quickly and effectively to take them. We are now seeing, in some of our newer industries--for example, biotechnology--serial entrepreneurs who start several successful and creative businesses.
As I said, the Government can create the climate which helps that process, but they cannot make it happen. We need to work in partnership. The Government can, however, play a major role as a collector and disseminator of information about what works and what does not work. The Department of Trade and Industry is in a unique position through its sponsor directorates, and through specialist organisations such as the innovation unit, to carry on a close dialogue with companies and other organisations, and to publicise widely what they tell us.
We have found that the most innovative and successful companies, whatever their size or line of business, exhibit some remarkably similar characteristics: leadership and vision; application of knowledge and developments in science, engineering and technology; constant learning from others; high levels of skill and good people management; and, above all, the development of new or improved products, services and processes which are well designed. They must not only meet but exceed the needs and expectations of customers. One of the most pleasurable aspects of my job is visiting some of those companies, which exhibit some, if not all, of those ingredients--the mystery x-factor that demonstrates the successful, entrepreneurial firm.
To succeed, businesses must embrace both the challenges and opportunities offered by fast-moving and longer-term developments in technology and markets. They must be outward looking. They must develop closer links with the knowledge base, whether world-class university or local further education college. Companies of all sizes will find that that brings direct benefits to their business, as well as helping recruitment strategies and getting products to market more quickly.
Another key recipe for success is to learn from and to seek to emulate the best in the field and to be ambitious. I therefore welcome the CBI's campaign to increase the uptake of benchmarking and best practice. As I said in October, I believe above all that our business links network has the potential to transform the performance of our small businesses.
I want to see the creation of a network of business links that delivers high-quality services to all of the businesses in their communities, but business links can help our companies to be world-class only if the support they provide is itself up to that standard. They will need to
refocus their services to become more customer-driven, more creative and more entrepreneurial in style. I set out those performance expectations in the document that I published last month.
We have also asked the accreditation board for business links to make the element of entrepreneurship a key part of the accreditation process. From April 1998, each business link will need to measure its impact on the productivity, profitability and export performance of local business. Results will be published in a national league table, to measure progress and to allow each business link to benchmark its performance.
I want to see all our small and medium-sized businesses becoming learning organisations, able to respond to changes and opportunities in their markets as they arise. I am ambitious for those companies, and they deserve world-class business support. I am confident that our business link network will provide it.
To provide a further source of practical help for small businesses, we launched the enterprise zone on 4 November. It provides firms with easy access through the internet to sources of authoritative business information and advice on, for example, regulations, sources of finance and potential export markets. Key sites have been, and will continue to be, identified by experts and will be linked to the enterprise zone.
Through the enterprise zone, small firms can find the information they need quickly and easily. It will also encourage more of them to use the internet as a source of information. Two thirds already have personal computers and modems and are internet-ready.
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