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Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)The Knowledge 2000 Conference |
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The phrase "knowledge based economy" has rapidly entered the English vocabulary over the last few years. It is useful shorthand for the changes taking place in markets across the globe. But sometimes we can be over reliant on the phrase and forget what lies behind it. The knowledge economy is bringing about a fundamental change in our country and economy. The shift from an industrial to a knowledge-based economy at the beginning of the 21st century is quite as profound as the move from an agricultural to an industrial economy at the beginning of the 19th century. If we look around the world today there is one main characteristic of the global economy. That is change. Only twenty years ago phone conversations travelled by copper wires which carried less than one page of information per second. Today, a strand of optical fibre as thin as a human hair can transmit in a single second the equivalent of over 90,000 volumes of an encyclopaedia. There could be more innovation in the next twenty years than at any time in the last two hundred. This change is driven by two factors which reinforce each other. Rapid development of technology and opening up of markets across the globe. Dynamic markets, international competition and new technology are vital spurs to economic growth and innovation. Open markets bring new ideas and people, stimulating innovation and creative skills. Wealth creation and rising prosperity depend upon the application of knowledge. In this modern economy, the main source of value and competitive advantage is human and intellectual capital. For most of our history wealth and power has come from the control of physical assets - land, raw materials, coal, iron and steel. In this, the 21st, century it will come from human capital. Knowledge needs to be created, located, adapted and exploited. Applying knowledge to develop new products, new processes and new services which reduce costs, meet customer demands and open new market opportunities. The new economy, - the knowledge driven economy - has as its cornerstones learning, skills, innovation and enterprise. Successful economies and societies will be those that can adapt to the demands of rapid change, that are flexible and creative and manage change rather than being submerged by it. That find ways to include all their people. But the market left to its own devices all too often fails to educate or equip individuals for this world of rapid change. We can only do it together - to deliver the skills that people need for the challenges we face. First and foremost, Government must provide a stable macro-economic environment. Stability matters more than ever in the new economy of the 21st century. Because more than ever businesses need to invest in knowledge - be it through R&D, or through training, as well as taking reasonable risks to stay ahead in fast moving markets. We can ill-afford this vital investment to be put off through fears about the economy and its long term stability. But getting the infrastructure right is only the beginning. We need to take a wide range of action to improve our competitive position in the knowledge driven economy. Government must promote competitive markets, and encourage long-term research and investment. We must open markets and ensure effective competition, to stimulate innovation. We must invest in education and the skills which business needs. David Blunkett and other speakers later today will have more to say about this. We can not underestimate the importance of skills. Education and training are the key to meeting the economic challenges we face in the 21st century We must exploit our science base and promote innovation to create world-class ideas, breakthrough technologies and high value businesses. Firms must master the art of innovation. Where product lead times are becoming shorter, companies need constantly to develop and adopt the best products, techniques and practices available to them. During the course of today we will hear from a number of British companies how they have reaped the benefits of innovation. Business must raise their sights, collaborate, compete, share ideas, invest in research and development, and also take responsible risks. Companies must take up the new digital technologies and exploit the opportunities of e-commerce. The Prime Minister has set a goal to make Britain the best place in world to do e-commerce. That will be crucial if we are to be at the forefront of the knowledge driven economy. Universities must become an integral part of the economy, developing stronger links with business and commercial applications for their research. We must help people adapt to the new world of fast-changing markets and shifting work patterns without sacrificing their quality of life. In a modern economy there is a responsibility on Government to ensure minimum standards of fairness and treatment for all in society; a responsibility on business to work in partnership and ensure that the task of making a reality of the flexible labour market does not fall solely on working people. It is the task of government, business and unions to lead people through this process of change. We must do so not only in Britain but in Europe. Europe is our main market. Our economic success is intrinsically linked with that of the rest of Europe. The Portuguese Government are holding a European summit in Lisbon at the end of March with the aim of agreeing an agenda for making Europe the most dynamic and competitive economic area in the world by 2010. This will be focusing on economic reforms needed to meet the challenges of the knowledge economy. Looking at ways of cutting start-up costs for new businesses in Europe, improving access to finance for small firms and high growth companies, and driving through the telecoms liberalisation needed to cut costs and widening access to e-commerce and the internet. The UK Government has been working closely with Portugal and other member states in preparing this agenda, which should mark a turning point in the economic direction of Europe. I am therefore delighted that we are joined today by Antonio Guterres, the Prime Minister of Portugal. The challenge we face is to both embrace the knowledge economy and ensure that in the process we avoid widening the inequalities that already exist in our society. The knowledge economy requires the opportunity rich society - so that all can benefit. Today provides us with an opportunity to identify how together we can meet the challenges that lie ahead. |
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Other speeches by Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)
(the following are available from the archive) |
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