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Lord Sainsbury of Turville

Opening the 1999 British Association Festival of Science,"Prospering Through Science"
Lord Sainsbury of Turville


Monday, October 04, 1999


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Thank you for your kind words of introduction. I am delighted to be here to launch the 1999 Festival, both because this is probably the premier scientific event in this country, and because this year's theme "Prospering Through Science" is of great importance. Science and engineering I believe have a key role to play in wealth creation, and we, therefore, need a science policy that both generously funds fundamental research and also encourages transfer of that knowledge into industry.

Why are science and engineering so important in wealth creation? In today's world markets there are three factors which are radically changing the industrial world in which we live. The first is the increasing trend towards global markets. Developments in transportation, communication and finance made possible the growth of a truly integrated international economy, and shaped the form of a new economic entity, the multinational corporation. As a result, there are very few sheltered home markets left in most developed countries. Almost all markets in tradable products are open to international competition.

Secondly, the dynamics of world markets have been dramatically altered by the increasing role played by Newly Industrialised countries. Because of the growth of literacy which is taking place in the Third World, cheap labour, which once could not be used because it was not productive enough is now reaching productive levels which make it competitive in world markets. And, of course, these countries have lower wages than us.

And, thirdly, science and technology are playing a major role in industry's structural change, destroying the competitive advantage of some companies and giving it a boost in others. Information and communication technologies are revolutionising banking, insurance and the leisure industries, and in some cases creating new industries. UK exports of computer games were worth £432 million in 1997.

The human genome project is going to be of profound significance for the pharmaceuticals and healthcare sectors, offering real hope in the treatment of conditions such as cystic fibrosis and cancer. Later this week there will be the opportunity to discuss the route "From Genome Valley to General Practice".

The space sector long dominated by basic research and public funding has come of age. In 1996 international commercial expenditure exceeded government spending for the first time, and there are large commercial opportunities for the UK in the international markets for space-based telecoms and navigation services, which are expected to be worth some $150bn a year by 2010.

And it is not only new, high-technology industries which are being affected. Science and technology are also have an impact on traditional industries, creating opportunities and threats for them. We should not talk of high-tech and low-tech industries, but only of high-tech and low-tech companies.

In this dynamic, new world we will only be able to maintain and improve our standard of living by exploiting our design skills, our research and engineering skills and our sophisticated management skills. At the same time these scientific developments provide this country with a great opportunity to improve our economic performance because we are very good at science. With 1% of the world?s population we are responsible for 4.5% of the world's spend on science, produce 8% of the world?s scientific papers and receive 9% of the world's citations of them. And we have been highly successful in industries such as pharmaceuticals, defence electronics, biotechnology and computer software, which depend on "elite science". That is why the Government is putting so much emphasis on our policies for science.

But there are a major challenges ahead. We need to make certain that we are investing enough in doing fundamental science of the highest quality, we need to increase interdisciplinary research and we need to increase the exploitation of novel ideas and technologies.

Until New Labour came into office, while overseas governments had been increasing the amount they spent on research, the British Government was reducing it. It was clear that we needed to increase our spending on science, particularly in some of the new areas which will underpin the performance of successful British companies, and despite the very tight financial controls that the Government rightly set itself some £1 billion additional public funds, including £0.7 billion for the Science Budget, have been made available to the science base over the next three years. Coupled with a further £0.4 billion additional funding by the Wellcome Trust in a ground breaking partnership, the total additional funding is £1.4 billion. As a result, by 2001-2002, the Science Budget in real terms will be some 15% above its value in 1998/99.

But it is not just the overall increase in money which is important. It is how we spend it. We have increased the money available to the Research Councils, and for the first time ever they have been given firm allocation for three years, thus allowing them to make firm long-term plans. We have also put £700 million into the Joint Infrastructure Fund to make a start on repairing the damage which has been done in recent years to our scientific infrastructure.

As well as making certain we are investing enough in fundamental science of the highest quality, we need also to increase multidisciplinary research, which is now widely considered to offer some of the best opportunities for exciting scientific breakthroughs. How do we ensure that the highest quality interdisciplinary research has the same change of being funded as the highest quality research from more established areas?

Part of the increased settlement under the Comprehensive Spending Review for the Engineering and Physical Sciences Research Council has been targeted to underpin the biological and life sciences. And part of this allocation has been used to establish a Programme Manager for Life Science Interface, which will support research at the boundary between the Physical Sciences, Engineering and the Life Sciences.

In other interdisciplinary areas which do not have specific initiatives to fund them, and in particular where they span the interests of more than one Research Council, there remain issues about peer reviews panels, and how to compare very different subjects to assess which is more deserving of funding. The Research Councils are very aware of this difficulty, and much progress has been made. However, there is still more which can be done.

The third major challenge we face is innovation. While we have an excellent record of discovery our record of innovation is more variable, and it is clear that there are many more industries and companies that could benefit from a greater use of our science and engineering base. There are not enough businesses in this country, particularly SMEs, which are able to interact effectively with the knowledge base, whose capacity for innovation and enterprise is as great as it should be, and who appreciated how graduate and post-graduate knowledge and skills contribute to improved competitiveness. There is both a supply-side and a demand-side issue, and we need to do better at both.

We must provide incentives to universities and research institutes to transfer their knowledge to industry, but we must also strengthen and extend business capacity for innovation and enterprise. And we have to strengthen the capabilities of business to take scientific and technological knowledge and combine it with knowledge of markets and customer needs to create innovative products, processes and services.

There has been an improvement in recent years in some aspects of our innovation performance with more spin-offs from universities, and the appearance of more business angels, but we still need to do more to capitalise fully on the strength of our science base and our venture capital industry.

This does not, however, necessarily mean spending more on applied rather than basic research. The proportions of responsive and directive research funding are, I believe, broadly correct. The profound economic benefits arising from strong research base are recognised round the world. In America, the land of less government, a bi-partisan National Research Investment Act secured the doubling of federal funding for basic, scientific, medical and pre-competitive engineering research over the next ten years. In Japan, despite recent economic difficulties, public funds for basic research are rising by 12% in the financial year 1999-2000.

If we look at universities in the USA we see that many of those which have been most successful in basic research have been very good at generating spin-off companies. MIT, Stanford and Berkeley are three obvious examples. MIT has had a major impact on the economy of greater Boston, where numerous knowledge-based companies are located. There are now estimated to be more than one thousand MIT-related companies located in Massachusetts, with the world-wide sales of $53 billion. About 125,000 workers are employed by these companies in Massachusetts, and almost 353,000 worldwide.

While we don?t need to change the ratio of basic and applied research, we can do more to improve the mechanisms of knowledge transfer. A first-class science base is a great national asset, but we also need world-class scientific entrepreneurs.

The Government?s strategy in this area was set out last December in our Competitiveness White Paper, "Building the Knowledge-Driven Economy", and I believe that we have taken some important initiatives with schemes such as University Challenge, Science Enterprise Centres and the creation of the Reach-Out Fund by the Higher Education Funding Council of England, and the Department of Education Northern Ireland. I have also been greatly encouraged by the enthusiasm with which these schemes have been greeted by Universities. The White Paper also sets out clearly our view of the role of the DTI. This is to work with businesses large and small, and from all parts of society, in their efforts to gain customers and make projects; here, in Europe and the rest of the world.

By investing to build British capabilities - in particular our science and engineering base and skills;

By promoting greater competition principally by empowering consumers but through regulation where necessary, for example to promote more competition in the energy markets;

And by acting as a catalyst to collaboration both between businesses encouraging greater business to business learning and the take up and endorsement of best practice, and between business and the science base through the Foresight programme and by other mean.

And we have also initiated a second round of Foresight. I believe that Foresight plays an enormously important role by bringing those who know about technology developments together with those who understand market needs. It is also a way for Government to influence the demand for R and D. It is much easier for Government to produce schemes to encourage the science and engineering base to interact more strongly with industry, and that is why we have a multimedia of schemes. But it is equally important for Government to encourage the demand for R and D, and this is something I believe Foresight can help to do.

While we have taken some useful initiatives, we clearly still need to do more to improve our innovation performance, and as part of the Government?s ongoing work on science and innovation, several areas are being examined, building on the agenda set out in the Competitiveness White Paper. For example, we are looking with DfEE at the flow of young people with science, engineering and technology training through from school to further and higher education, into the science base or out into the world of employment.

In the context of our work on innovation I greatly welcomed John Baker?s excellent report "Creating Knowledge, Creating Wealth" on realising the economic potential of Public Sector Research Establishments. The main recommendations cover such issues as the ownership of IPR, overcoming Whitehall?s risk avoidance culture and reforming the rules on civil service conduct. The report was issued in August and the Government response will be published soon.

The Council for Science and Technology has also published today a report of its view of science and technology activity across Government. The report is the output of a short, strategic study conducted by a sub-group of independent members of the council. They undertook a review of departments? use of science and technology and considered what lessons might be drawn for Government science and technology as a whole.

I warmly welcome this report. Its broad thrust is very much in line with the direction this Government is taking through out modernising Government agenda. As the sub-group recognised, this Government attaches great importance to science and technology, and the way in which it is used in departments. The findings and recommendations of the sub-group provide a most valuable input to our consideration of how we take this agenda forward.

We have already taken some steps in the direction advocated by the CST. For example, in recognition of the importance of science and technology to so much of our activity, we have established the Ministerial Science Group to promote a co-ordinated and coherent approach to science and engineering across Government. There is also a Minister in each Department with specific responsibilities for the use of scientific advice in policy-making. Over the next few months the Government will consider the recommendations in the report in more detail; and an implementation plan setting out how the recommendations will be taken forward will be published soon.

In carrying forward our agenda on innovation we are drawing on a wide range of information and expertise, including input from the continuing work of the Council for Science and Technology, which advises the Government on strategic issues concerning science and technology. The Council is currently putting together two reports, one on the exploitation of science, and one on the teaching of science in schools.

Finally, I should like to say a word about the Public Understanding of Science, and the need for scientists to inform the public about recent scientific and technological advances, and the engage them in an open and informed debate about the role of science in our society. I do not believe that we will be able to maximise the benefits we get from science in the years ahead unless we can convince people that they will benefit from it. We live in a period of rapid scientific change which, particularly in the biological sciences, will have a profound impact on people?s lives, and the public understanding of science is, therefore, more important than ever before.

I believe, however, that what has been termed the deficit model of public understanding of science has severe limitations. Put brutally it says "Fill people with facts, teach them about risk, and all will be well" with science free to move on unhindered. I doubt if it is practical to think that the resources allocated to the public understanding of science are sufficient to raise the general level of public understanding, and I believe that this approach also shows a lack of understanding of the public.

I am not saying that people don?t need to know some basic facts if they are to discuss the benefits and risks of particular discoveries. People need to know what DNA is if they are, for example, to discuss the benefits and risks of genetic engineering. But these essential facts are usually not too difficult to convey, and the real challenge for scientists lies in engaging with the public in an open debate about new technologies, and convincing them that the benefits outweigh the risks and that the risks are properly controlled by the regulatory system.

Harold Varmus, Director of the US National Institute of Health, said recently:

"Ordinary people care about the destinations of science, the answers, the miracles, the cures. But a scientists cares most deeply about the journey itself."

If we are going to maximise the benefits we get from the exciting scientific developments taking place today, scientists are going to have to talk about the destinations and benefits of science.

The scientific developments taking place today provide this country with a great opportunity to create wealth and prosperity through science, as well as enabling us to improve the quality of our lives. That is why the Government is putting in place the policies, and seeking to create the climate, to make this possible. But we will only be successful if organisations such as the British Association can communicate to people what is happening in science, and the benefits these advances can bring, and if our scientists and businesses can see the opportunities that exist and seize them with enthusiasm.

I hope that this Festival is a great success, that people came away having had an enjoyable time and having been stimulated by what they have heard, and I look forward to taking part in some of the events later in the week.
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