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24 Jan 2007 : Column 494WH—continued

RDAs have scientific committees, but some of them are appalling. I have had a running battle with the one in East Anglia about wanting to call Norwich a science city. It wants to know why I want to call Norwich a science city. It has three major research centres, a university with five departments, C-Red and the Tyndall centre on climate change, and science schools. The agency told me that there is no use in having a science city because there is no money in it. When I asked, “What do you mean, no money in it?” it replied that it does not get any money from the DTI or Government. But that is not the point. As Nottingham and York have found out, the
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point is that people will work together. It is about young scientists in schools who want to do science interacting with industries, universities and structures. It is about building up a complex.

I once asked Sir David King what he thought a science city was and he said, “Oh you just stick a notice up and say this is a science city.” I said, “Yes, but you’ve got to build something behind that as well.” People are basically interested in science, technology and engineering and want to make things happen. We have to use every device. Calling Norwich a science city will not cost a penny but it will bring together people from different areas.

Dr. Kumar: My experience in our area of the north-east is very different from the hon. Gentleman’s. We had tremendous support from one north-east RDA in helping to set up a centre for process innovation three years ago. The agency went out of its way to make things happen for us, so I am alarmed by his comments. There must be something wrong in his agency. Ours has been a tremendous success. A lot of effort has been put in by all those involved.

Dr. Gibson: Of course, there is variation between agencies. I can look at agencies where things are happening too. I believe that RDAs meet once or twice a year. Why do not they learn from their scientific committees? The best can tell the worst what they can do. They have lots of money, but I shall not be critical about where that money goes, even though there are local reporters present who have heard me talk about that already. There is lots of money about in RDAs. If science and technology can get the right development for good innovations, that should be a priority. Spreading it around is not the way to do things. We are trying to improve the function and lives of people across the board, but some RDAs do not have the money because there is no money in it. Money is accumulated when people interact and get the support that they need from industry and other groups.

A whole load of issues still need to be looked at, such as the differences between regions and spin-offs. What are spin-offs? Every meeting I went to with Lord Sainsbury—the last Minister for Science and Innovation—was all about spin-off companies and clusters. Do hon. Members remember the idea of clusters and that all the companies should be in the same place? That idea seems to have died a death. Why does it happen in other places and not here?

Dr. Kumar: In the north-east, we have one of the most successful clusters in the vibrant chemical cluster. It has worked because there is spirit and a desire for the companies, academics and think-tanks to work together for the cluster to flourish. It has been going for three or four years in great spirit.

Dr. Gibson: I absolutely accept that it can happen. When it does happen, it is because individuals who have ideas and who want to work together make it happen. Underwriting all that is the idea that innovation is important. It is about getting people with ideas together. One does not have to have brains to be an innovator; one simply has to think of other ways of doing things. That has obviously happened in the hon.
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Gentleman’s part of the world through collaboration between universities, industry and school, but it does not happen in other places, so the hon. Gentleman is lucky. We have to make it happen, but who will do it? I have lots more to say, but I think that I have gone on for too long.

Public procurement is another area that we should look at. The Government have millions of pounds to spend. A document has come out of the CBI and my favourite company, Qinetiq, which used to work only for the Ministry of Defence. I know from my time on the Select Committee on Science and Technology—the hon. Member for Esher and Walton (Mr. Taylor) will remember this—that Qinetiq made many discoveries, but put them in the bin if they were not useful to the military. That has changed. It may now develop something—a new plastic, for example—that is not useful in a gun but might be of use in a kitchen or elsewhere. Some of us have been to the company and seen how successful it is.

Qinetiq’s document talks about procurement pulling ideas and discoveries into the marketplace. That is what it needs. The document also says that the United States has an organisation that undertakes such work, and it recommends one for Britain. It is a major document, which challenges the way in which we do things. Important discoveries should not be put in the bin; they should be pulled through. The document says that regional development agencies may be important in some areas, but that generally we need one in this country. I cannot remember how many billions are invested in procurement, but it is much more than that which is invested in research and development. Nine times as much goes in, I think. It is billions. Using that money, we should encourage production and take activity into the public sector.

The issue is about risk and vision, too. People have to take a risk and think that innovation will happen. We think of ourselves as a risk-averse society. We are rather conservative and we do not want to make things happen. Our education is much the same. Young people learn about Newton, but we do not ask them for new ideas. The links between universities and businesses could be much improved, as the Campaign for Science and Engineering in the UK continually says. It also says that public procurement and the pulling through of new ideas and discoveries is important.

The public, too, have a large part to play. They can sometimes stimulate people to think about how they want to develop something that people want. The flow is not one-way but two-way: we make people’s lives different, they become part of that culture, and they say, “Why don’t you do it this way? Why don’t you invest in something like this?”

I always remember the argument about matches that one could strike more than once without having to put them in the bin—and the argument about why one could not do so. I never quite understood it, but I was crazy and young at the time. One can make such discoveries, but what is important is a system that the public can influence.

People make those things happen. Other people will talk about innovation in their areas, where they see it and at what level: big, small, in small ways and so on. At the end of the day, however, we must say to the
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Department of Trade and Industry, “You produce lovely documents, you’re a lovely Department and we love you dearly. You’re like the Home Office: we love you dearly.” But sometimes we must ask, “What are the important things that are going on in your Department, which you should perhaps take out?”

I have always been and always will be in favour of a Ministry of Science. We talk about different Departments talking to each other. Oh yes, they tell me they do it, but I do not believe it. I should have a Ministry of Science where the staff are all stuck in one place and talk about scientific and creative ideas. We could put the arts in there, too—I do not mind. They can talk about things together, and say, “This is what we’re capable of doing. How do we make it happen?” If people do not drink coffee together, they do not work together. The family who drink coffee together, stay together.

Several hon. Members rose—

Mr. Peter Atkinson (in the Chair): Order. Before I call Mr. Ian Taylor, may I remind hon. Members that there is just over a quarter of an hour left before the winding-up speeches start? If everybody wants to get in, they will have to ration their remarks considerably.

3.13 pm

Mr. Ian Taylor (Esher and Walton) (Con): Thank you, Mr. Atkinson. I shall obey your ruling.

First, I welcome the Minister to his position—particularly because he is a Member of the House of Commons. Although I much admired his predecessor, he sat in the other House, which meant that debates in this House on science or space were less well informed. I am sure that they will no longer be like that.

I shall provide the Minister with one memory from when I was Minister for Science and Technology at the Department of Trade and Industry. I was about to give a speech at the university of Durham, but the vice-chancellor misread the agenda and announced the speech that the person after me was to make on catalysis and its impact on industry. I could not remember what I knew about catalysis and its impact on industry, so after pausing for breath and thought, I said, “I’m from the DTI and I’m here to help,” and someone in the audience said, “That’s an innovation.” Early on in my ministerial career, I learned what innovation was.

I largely agree with the hon. Member for Norwich, North (Dr. Gibson), although at Coventry City football matches we do not discuss endogenous growth theory. It obviously means that among my local support, I am less elevated than the hon. Gentleman.

Let me focus. First, the international challenge is no longer about outsourcing, but about the knowledge economy that is obviously growing in countries such as India and China in particular, although other Asian countries are catching up rapidly. The battle is not only to produce engineers and scientists of quality, but to make the UK an attractive place for them to work. We must attract them to this country.

Secondly, we must change the culture in this country so that it is much more receptive to those people who
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make the knowledge economy possible. One bizarre characteristic of this country is that we love new gadgets and applications and we want instant solutions to complex problems, but we do not admire as heroes the people who make it possible—the engineers and the scientists. We must therefore have people with skills in this country.

I do not have time to go into the problems in education, but the Prime Minister admitted in a speech in November that the Government have not succeeded in securing the right scientific output from schools. That is a serious problem—the present Government did not create it, but they face it—which has a knock-on effect for universities: they do not have the right mix of people. We must work out how to encourage more young people to study science, engineering and computational subjects, including mathematics.

My third point, which the hon. Gentleman picked up, is that in this country, the people who admire scientists tend to admire them because they work in blue-skies areas and make discoveries. The problem is that we do not have the same esteem for people who turn a discovery into an application. The Minister must consider the research assessment exercise and work out how a bibliometric approach that values publications and citations can be adjusted to value departments with a good track record of turning a discovery into an application. Such work is usually multidisciplinary, taking place not only within one institution, but between different institutions.

I have been doing some thinking for the Conservative party, which is not a contradiction in terms, despite the fact that in our last election manifesto, we did not mention science. That was our mistake, and we are now doing some serious thinking. My hon. Friend the shadow Chancellor said in an article in The Daily Telegraph on 22 November:

as part of remaking our economic policy. Hooray! It is in the national interest that we all take an interest in those subjects.

My committee has made two proposals. First, we should use smart public procurement, which the hon. Gentleman mentioned. The figure for Government purchases is about £150 billion, against an Office of Science and Innovation budget of £3.4 billion. We should also use set-aside, which the Americans use, so that small and medium-sized companies benefit from Government procurement.

Our second idea is for an innovative projects agency. I was delighted when, on 30 November, the Financial Times said:

The reality is simple. Many of the things that the hon. Gentleman mentioned and those in the Department’s documentation are so spread out that they do not make a collective impact. Many are based on a linear approach to knowledge transfer, which is not appropriate for most of this country’s industries, excluding perhaps the pharmaceutical industry. Another problem is that the hon. Gentleman and the Department push at the supply side, whereas I want to emphasise demand pull.

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We have suggested the innovative projects agency, which would have a budget of £1 billion taken from existing sources, so I am not promising vast sums of new money. When one looks at the figures, it is interesting to consider the regional development agencies, for which I do not have a high regard. I think we could do a lot better: perhaps the best people from the RDAs could work with the innovative projects agency. The RDAs have several hundred million pounds that could go towards the agency’s budget. Some of the DTI’s activities could be transferred to it, and the Technology Strategy Board, which has a budget of £178 million, would be absorbed, too.

Those are key ideas that would help people in this country to collaborate to ensure that ideas are taken from discovery to application—obviously, that application would be commercial. I am enthused by those ideas, and I hope that the excitement resulting from a big initiative that we propose would permeate society more widely. It is essential that British people see that scientists and engineers can provide solutions that help to improve quality of life. That would be a great innovation in itself and it is one of the challenges that we all face.

3.21 pm

Dr. Desmond Turner (Brighton, Kemptown) (Lab): I shall speak extremely briefly—for less than five minutes, if I can. For me, there is something of a feeling of déj vu every time we discuss innovation. My hon. Friend the Member for Norwich, North (Dr. Gibson) and I have been involved in this field for more than 10 years during our time on the Select Committee on Science and Technology. It seems to me that the same problems are still with us to a large extent. The position is not quite as bad or grim as it was when we started, but we have not yet cracked the solutions. We have not made it possible for a bright scientist or engineer to get his or her idea or product to the market without going through some pretty awful challenges.

The science is almost the easy bit. Most people think that the original science is the difficult bit, but in many ways it is not. The engineering is not that difficult either because there are problems that people can work with. The difficulty is taking the idea, spinning out a company and ensuring it survives until it develops into one that earns revenue and can stand on its own feet. That is incredibly challenging and difficult. I have watched many companies go through the process; no company’s history is the same as any other’s, but they all have a lot of things in common.

All the support mechanisms, for example, tend to be far too diffuse and slow to respond—I am talking about conditions in the UK, not in America in silicon valley or in the Boston, Massachusetts corridor. It is difficult for companies here to access the capital support at low interest they need when they need it. If they fail, they run into the biggest brick wall of all. If they are quite near market when they fail, they face the catastrophic cultural attitude towards business failure that exists in this country, which is to condemn someone as a pariah. In America, they just say, “Hard luck. Try again. You’ve done it twice, you’re going to be even better the third time. We’ll back you.” That is totally different to the English culture. In England, failure means it is curtains.

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The other possibility is that such companies find themselves simply swallowed up. If they have virtually got to the point of going to market, but do not have the capital to go further, a larger, established, less innovative company will just pick them up for nothing and take the benefit of all the work that has gone into the original company, which will not get any benefit from the process. The British venture capital industry has no solution to that problem at present. It will not invest in anything that is too small or a risk. It will start to invest seriously only when it can virtually see the profits on the table. That is not a promising situation. We in this country do not have the business angels that other countries, notably the US, have. There are one or two, but they are a rare breed. We need to do an awful lot to develop and improve the commercial circumstances surrounding the process that currently make it so difficult. The Department of Trade and Industry has a major role to play. I am not suggesting that it should put money towards the process, but there is an awful lot it can do to facilitate it.

The problem is not exclusive to the UK. We have found exactly the same complaints in Australia. Perhaps it is a phenomenon of the English-speaking world as opposed to the American-speaking world, but clearly there are a lot of problems to overcome. It is not just a question of willingness to be entrepreneurial or innovative, or of scientific or engineering genius, but of getting the whole package together. The commercial elements are just as important and that is where the greatest difficulties lie.

3.26 pm

Dr. Brian Iddon (Bolton, South-East) (Lab): I congratulate my hon. Friend the Member for Norwich, North (Dr. Gibson) on securing the debate. I declare a registered interest in that I am a fellow of the Royal Society of Chemistry and I am its parliamentary adviser on the Labour Benches.

In my view, innovation is a spectrum of activity. It is not just the production of an idea or the invention of a new product, but everything downstream and upstream of that. I do not think that people can work in isolation to produce an invention: they gain ideas from other people and we have to create the right policies and culture. I congratulate the Government because I think that we are getting there. We are not there yet, but more money is going in and the policies are becoming right.

There has been a lot of criticism of regional development agencies, and I have to say that the one in the north-west is one of the best. It was certainly the first to spin out a science council. It is innovative and willing to take risks, and I shall refer to one of the risks it has taken. I am chairman of this particular enterprise, which is called the Bolton technical innovation centre.

A schoolteacher in Bolton came up with an idea, and I want everyone to know about it. He thought that if we can bring children to perform in orchestras much better than they would individually at school by, for example, creating a music centre in the town, we could do the same thing for science, technology, engineering and mathematics. That was his idea: to bring children together from different schools all over the Bolton area and further afield to help them to excel in STEM subjects.

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