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Mrs. Gorman: I agree with the hon. Gentleman that science and technology play an important role. Will he
also remember that many entrepreneurs, for example, Alan Sugar of Amstrad and Dyson and his magic hoover--I have one, but it is not called a hoover, of course--are people who learned on the job? We must not block the entry of such people both into work and into innovation by loading them down with Government regulations and controls. Does the hon. Gentleman not agree that we must keep the field open and make sure that the Government stay off their backs?
Mr. Timms: I entirely agree with the hon. Lady. That is an important point and my hon. Friend the Minister is also committed to that approach.
My point is that there is much innovation in our universities that is not finding its way to commercial exploitation. Today's debate must be about how we can change that so that small businesses have access to that innovation and can exploit it commercially, in the way that the companies that the hon. Member for Billericay (Mrs. Gorman) mentioned have done so successfully. The example that occurs to me is that of Psion, the London-based manufacturer that has raised several of the points relating to access to innovation and university work. Universities can themselves stimulate the creation of new companies; that has happened in Norwich and Cambridge and we should encourage it more widely.
I welcome the points relating to science parks in the Government response. The United Kingdom Science Park Association sets out as its objectives:
Nearly 10 years ago, I chaired a seminar for interested parties in London to consider how London might learn the lessons arising from the Cambridge phenomenon; but in the 10 years since then, progress has been slow. It is astonishing that London has only 7 per cent. of the quantity of technology park floor space that Birmingham has; and London's quantity of technology park floor space is pathetic when compared with that of any major European city. Technology parks elsewhere in the UK have largely been developed by universities on vacant university land, but London's universities do not own vacant land, so it is not physically possible for them to follow the successful examples of Cambridge, Surrey and Heriot-Watt.
Mr. Prior:
Does the hon. Gentleman recognise that, when looking at London, one has to take into account the City of London, which is probably the most innovative financial centre in the world and is leading the world in a range of financial services and insurance products?
Mr. Timms:
The hon. Gentleman is absolutely right, but there is also a large manufacturing sector in London. I am told that there are more people working in manufacturing in London than in the whole of the northern region. It is therefore vitally important that the businesses that employ those people are innovative and the Government are rightly turning their attention to how that can be achieved.
The hon. Member for Chesham and Amersham mentioned Surrey university. Yesterday, many of us received a letter celebrating 10 years of success from the Surrey research park, which is based at the university of Surrey at Guildford. Dr. Malcolm Parry, general manager of the park, makes the point that
Earlier this year, the Estates Gazette had an article about the state of technology parks in London. It made the point that London is still short of science park space, but that there are schemes in the pipeline that could fill the gap. It says:
The university has made an interesting and exciting proposal: a campus for 10,000 students, situated next to a science park, which will be developed on the successful business park model. I commend Greenwich university's work in seeking to develop close links between research and industry, particularly in small businesses, which hold the key to economic development in the Thames gateway area--that whole swathe of land from Canary wharf, where the Prime Minister is attending the Anglo-French summit today, through east London to north Kent, which will be linked by the high-speed rail link to the channel tunnel. That whole region holds immense potential for the innovative small business sector.
A few yards from where my hon. Friend the Minister launched the small business website earlier this week, at the university of east London, detailed planning is under way for the Thames gateway technology centre, which won £8 million in single regeneration budget funding and is an excellent example of the sort of initiative that we need to encourage. It will provide vital research and development support to small east London manufacturing businesses, in partnership with the university of east London and other universities.
The centre plans to bring together research centres throughout the university, allowing them to strengthen each other through co-location, and placing them at a new site in the royal docks alongside a new business park, which will attract innovative small businesses to locate in it. It will pull together the centres for electrical and electronic engineering, manufacturing engineering, product design, information technology, media and communications, graphic design, fashion and marketing and textile design. The aim is to package what is coming out of all those units so that it can be accessed by small businesses. That is the way to stimulate innovation among those businesses, which is what this debate is all about.
Mr. Ian Taylor (Esher and Walton):
I declare the outside interests that appear in the Register of Members' Interests, which have some relevance to the broad debate.
I can happily truncate my speech, partly by referring to the debate in the House on British invention and innovation on 1 May 1996 at column 1061, which was initiated by the then hon. Member for Dover--the textual analysis of what I said then would bear some resemblance to what the Minister said this morning. Despite differences that we may have on various issues, there is a continuity between my work as Minister for Science and Technology and the Minister's work. I pay tribute to those aspects.
It is important, particularly for smaller businesses, that that there is continuity in initiatives started under one Government, when the electorate, in my judgment unwisely, decided that we should come to Opposition Benches and that the Labour party should occupy Government Benches. Many business men and women whom I have seen since the election are pleased that those initiatives are still there, and that the applications for the various challenges can continue.
The other reason why I can truncate my remarks is that I suspect that some of my colleagues will be eloquent in their criticisms of the Government in relation to the policies into which they may wander, particularly now that they have signed up to the social chapter. I can leave my colleagues to pick up those points.
I want to highlight the challenges that business faces, particularly smaller business. Fifty-three per cent. of the work force work in companies employing 100 people or fewer, and 98 per cent. of all companies have 20 or fewer employees. It is therefore crucial that the Government's efforts, as my hon. Friend the Member for Billericay (Mrs. Gorman) said, do not get in the way of job creation--the drive, entrepreneurial spirit and enthusiasm that smaller business men and women need to create jobs.
It is an onerous responsibility employing someone. It is an even greater responsibility for someone to try to ensure that he gets cash flow, so that he can pay all the bills regularly. I have advised small companies, and sometimes we get lofty in our debates in the House about the day-to-day practical challenges that business men and women face, so it is essential that we do not try to make their life more difficult.
It is also important, however, that Government understand that their responsibility is to contribute to changes in culture which can--and, in an increasingly competitive world, must--impact on those businesses. One of the sad things I found as Minister was the lack of understanding in the whole innovation process of the work of design.
I too pay tribute to the Design Council. It kindly sent me some figures, which I am sure it sent to other Members, which show the impact of design. I am convinced that that impact is genuine at each stage of the process, not just in the final packaging of a product. The aim is to make the product attractive to the customer, useful to him and with an added value that may demarcate it from a product made by a rival company or by a company abroad.
According to research by the London business school, devoting an additional 1 per cent. of turnover to product development and design raises both turnover and profits by 3 to 4 per cent. over five years. Other people may come up with different figures. The point is that there is a bottom-line advantage in investing in good design and in innovation.
Innovation is a difficult concept to understand, but, as the Minister said, it means making better productive use of new ideas--and of old ones in a new context--and it is crucial for British business to innovate. If there is a generalised criticism of small businesses in this country, it is that their failure to innovate will probably mean that many will fail unnecessarily, to put it bluntly.
Large or medium companies at the forefront of competition increasingly speak about the need to transform their product range every three years. That means that the products that they will make profits from in three, four or five years' time are probably only now being thought through or developed. That is a challenge for smaller businesses. The Design Council's figures, which are more up to date than any that I have, show that
I welcome the Design Council's millennium products initiative. It was right and proper to have a showcase for new products developed by British industry. I draw attention to an initiative which I believe the Minister did not mention this morning but for which I have always
been an enthusiast. I refer to the SMART and SPUR initiative--the small firms merit award for science, and support for products under research.
Especially at the SMART award level, the initiative targets companies employing fewer than 50 people, giving them the incentive to work on new ideas and new products. A Government grant can be a godsend to a company that has had no extra funding other than bank borrowing secured on private assets.
There is much talk, and has been much lobbying, about the role of inventors. Trevor Baylis has been very successful with the clockwork radio and is, naturally and rightly, anxious to help other inventors. The difficulty often is that inventors believe that they have the world's greatest ever product, and do not want to share the intellectual property or collaborate. It is a constant effort to encourage them to collaborate.
Sometimes businesses can be sponsors of the development of products. One or two challenge awards are designed to encourage inventors to work with larger companies, so that a good idea passes through what is often one of the most difficult stages--the engineering process to make a good idea into a commercially viable product.
The Year of Engineering Success is another initiative that has continued through the change in Governments. It is designed to raise the status of engineers and engineering in each aspect of our lives, of which it is a crucial part. Engineers are no longer underpaid and not valued by companies. Figures that I recently read show that, of recent graduates entering employment, engineers have a higher average starting salary than many other categories of graduate taken on by companies. Engineers should be regarded as much more central to our future.
"to promote university/industry linkages and the transfer of technology; to promote the formation of high technology firms; to attract firms involved in leading edge technologies; to create new jobs."
I am pleased to hear from the Minister that there is to be a review of the lessons of the Cambridge phenomenon and the experience surrounding the Cambridge science park.
"the Park benefits the Local Community and County in a number of very significant ways, for example, by the creation of approximately 3,000 high quality jobs and attracting more than £300 million to the regional economy."
That sort of example should be replicated much more widely in London.
"One year after the Government Office for London and the London Planning Advisory Committee concluded that a minimum of 200,000 sq m of technology park floorspace was needed in London, only two small schemes have been established--at Brunel University, Uxbridge, and at . . . South Bank University.
The article goes on to quote one of the sector's specialists, who says:
GOU's research had found that, compared with other major UK and world cities, London was underprovided.
The report . . . envisaged 10-15 science parks being set up in London, most of them on no more than 10ha, but with two or three big enough to attract inward investment."
"There is a very real opportunity to combine the skill and experience of science parks in fostering science and technology with the much better approach to master planning, estate development and management marketing found on businesses parks."
One hopeful initiative is the London science park at Dartford. A few weeks ago, I participated in a seminar at the big Glaxo Wellcome pharmaceutical campus in Dartford, hosted by the Member of the European Parliament for Kent, West. Glaxo Wellcome submitted evidence to the House of Lords Select Committee. At the seminar, I met Professor John Parsonage of Greenwich university, the chair of the science and technology parks London group, who is working at Glaxo Wellcome. He is also the chief executive of the London science park initiative.
"just 3% of UK companies have produced a new product in the last five years. In contrast, of the top-performing 25% of companies, 15% had produced a new product in the past five years, and for the top 10%, the figure is 62%".
I hope that small businesses realise the extent of the challenge that that represents for them, and that they must rise to it if they are to develop the new products that will be needed. They should understand the transforming way in which technology is impacting on business, and keep up with the opportunities that technological developments can bring, not only in manufacturing, but in the adaptation of products.
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