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Lord Sainsbury of TurvilleUK-Korea 3rd high technology forum |
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Minister, Co-Chairmen, ladies and gentlemen. Thank you for your kind introduction and warm welcome. I am delighted to be able to return to Seoul to participate in this the 3rd UK-Korea High Technology Forum. When I came two years ago, the UK delegation numbered some 20-30 participants. I am very pleased to see that this year, the UK delegation exceeds 50, which is a reflection of the growing interest in Korea in the UK and, of course, to the sterling efforts of the organisers, including our Embassy staff here in Seoul. This growing interest relates, not so much to the extraordinary success of the Korean football team in the World Cup enjoyable though that was, but more importantly to the strong performance of the Korean economy. At a time when many of the G7 economies have been under pressure, Korea continues to grow at around 6%, which is slightly above its trend rate over the past 10 years of around 5.5%. This is an impressive performance particularly in the current highly competitive economic climate. Looking at the longer term, it is clear that Korea is taking the tough measures to become the high technology business hub of NE Asia. It is not only the investment in infrastructure but also the more fundamental economic reforms and restructuring of the economy which will ensure that Korea achieves its goal. At a time when many of the smaller economies of Asia seem to be suffering from the temporary downturn in business activity and the growth of China as an attractive location for foreign direct investment, Korea is holding its own. As many have come to recognise, its decision to focus on developing its own high technology industries is bearing fruit. The UK has an outstanding record of scientific discovery, second only to the US, and ahead of France Germany and Japan. A recent study by the Institute of Scientific Information in the USA showed that British research produced 13% of the worlds top - that is, most cited – papers in 1998 as measured across a wide range of disciplines. And in July the Chancellor announced a 10% pa real terms increase in Government spending on science over our next three year planning period to enhance our position in world research. The excellence of UK science has also been confirmed once again this year with the award of the Nobel Prize to John Sulston and Sidney Brenner for their work at the Laboratory of Molecular Biology at Cambridge. The work at this one laboratory in Cambridge has led to twelve Nobel prizes and has led to the growth of a whole new industry. At present, the biotech sector in the UK employs 18,500 people in 285 companies – the largest in Europe – and that number is expected to increase four-fold in the next ten years. One of the messages I took away from my visit two years ago was how strong the perception was that the UK could not capitalise on the knowledge it was generating in our universities by developing new and innovative commercial goods and services. This is simply wrong. Our capacity for commercial innovation extends to many other areas. For example, a recent report on the European chip design industry found that the UK accounted for around 40% of the $2 billion market and 69 of the 195 European firms in the sector are located in Britain. The UK's pre-eminence in this field is perhaps illustrated by the question, "What is the most popular microprocessor in the world today?" No, it is not Intel Inside but the ARM chip inside 80% of the world's mobile phones. In performance engineering UK performance is no less impressive. With sales in 2001 of around $ 1 billion, and a 32% share of the market, Rolls Royce is the world's leading manufacturer of business jet engines. Notwithstanding the decline in air travel post September 11, the steady growth in demand for engines with thrusts of 6,000lbs and higher – where it is particularly strong – means that Rolls Royce will maintain its leading position. Similarly, in the broader aerospace and defence industries, UK business collaborates and competes with the best in the USA. Since its formation 30 years ago, Airbus has risen to be one of the only two large civil aircraft manufacturers in the world and it recorded 53% of total orders in 2001. In Britain we design and manufacture the wings for the whole range of Airbus aircraft – indeed Airbus programmes provide over 25,000 quality jobs for British workers in over 300 companies. Airbus's chief American competitor – Boeing – also recognizes the strengths of British engineering and technology. They spend around £1 billion annually with British companies and have recently established a partnership with Sheffield University's world-class engineering faculty. Boeing's UK chief executive, Tom Bell explains the investment: 'If we want to be the best in the world, we have to partner with the best in the world, which means being in the UK.' Whether it is in steel manufacture, electronics, the automotive industry, textiles, food or the new and growing creative industries such as computer games - which now employ around 1.5 million people in Britain - the UK is restructuring towards the innovative high performance end of the market and away from the labour intensive sectors, where China, Vietnam and Morocco are far better placed to compete. But in a world where every country is seeking to move up the value added chain, this requires a strong commitment to education and lifelong learning so that everyone has the opportunity to develop and adapt according to the rapidly changing situation. I believe my Government is taking the necessary steps to ensure that people and firms can cope with the challenge. For example, we have introduced a tax credit scheme on R&D expenditures which applies to companies both large and small at a cost of around £500 million per annum. To promote new technology and new skills we are setting up 12 Innovative Manufacturing Research Centres across the UK, backed by £60 million of government funds. They will be led by a team of academics and research specialists and will support all aspects of manufacturing, be it aerospace, construction and bio-pharmaceutics. And to ensure that businesses use the best technologies we are creating Centres of Manufacturing Excellence in every region. So what has been the impact of our policies as a whole? Unemployment, at around 5%, is approximately half that of our main European competitors - Germany, France and Italy - while inflation remains the same. Knowledge based industries such as aerospace, pharmaceuticals and telecoms account for 54% of output - higher than Italy, Canada and the US, and similar to France and Japan. And the UK has a higher share of knowledge based exports than any other country in the G7. However, our strategy is not only based on helping business to perform better in established industries, but also on ensuring that British firms are in the vanguard of businesses developing whole new industries, based on high quality research. I have mentioned biotechnology already, which over a period of time will transform the treatment of diseases such as cancer – a global $30 billion market. In the physical sciences we shall, over the next 10 years, witness the growth of nanotechnology from research in the laboratory to being a $100 billion business. This key underpinning technology will transform the life sciences, precision engineering and electronics and computing and I am determined that the UK shall play a leading role in its development, as we have in biotechnology. The energy and environmental sectors have seen little fundamental change over the past 50 years but worldwide concerns about the sustainability of economic development will see an ever quickening shift to the hydrogen economy. As a result, the market for clean energy technology is expected to grow from around $7 billion today to $80 billion by 2010. These are all whole new areas of opportunity for those with the innovative capacity to capitalise on them, and I am confident that the UK is well placed to do so. I can give no better evidence for this view than quote the Korean Institute for Industrial Economics and Trade and its recent report on Innovation Capacity and Industrial Advancement. Taking a broad matrix of indicators, including market size, R&D, human capital, IT infrastructure and IPR systems, and setting the USA at 100, the Institute concluded that the UK's innovation capacity was 94%, considerably above Germany and France at 83 and 82 per cent respectively, as well as Japan on 66% and Korea on 72%. This is corroborated by our own findings that new businesses, jobs and technologies are springing up around our established seats of learning. There has been a sharp increase in the number of patents filed, up 22% between 1998/99 and 1999/2000. Furthermore, in 1999-2000 there were 199 spin-off firms created to develop university research - compared with an average of 70 new spin-offs a year in the previous five years. And if one makes a comparison to the US, we spin off one company for every 8 million dollars of research funding, whereas in the US that figure is one spin off company per 50 million dollars. The Korean Institute's findings are also confirmed by a survey of the 500 fastest growing European companies published earlier this year by Deloitte and Touche. This showed that 150 are in the UK compared with 97 in France, 51 in Germany and 43 in Ireland – the UK is by far the highest in Europe. We realise, however, that we cannot operate alone in the global market and that international collaboration is critical to success. That is why this UK-Korea High Technology Forum is so important for exchanging views and developing an environment in which collaboration can flourish. Mr Seeto, who is our International Technology Promoter in Korea, has done a wonderful job in raising awareness in both our countries of the opportunities for collaboration, and I congratulate him on his efforts. To organisations who are not now aware of the extent of the DTI's services, informing business of technology developments around the world and then helping them to gain access to it, I suggest that you either talk to Mr Seeto or look at our globalwatchonline.com website at the earliest opportunity. I have sought, today, to highlight to the UK participants the strength and forward looking nature of Korean business and economic policy. I hope that for our Korean hosts I have been able to paint a picture of the UK's capabilities in the field of science and technology, in business as well as on the laboratory bench. But the acid test lies with you the audience. The whole point of this Forum is to bring together expertise from our two countries, to discuss developments and to develop the relationships upon which international technology collaboration is built. In the UK, we believe that if our society is closed, inward looking and defensive, it will not long remain at the forefront of science and commerce because it will not take part in global collaboration. We believe that the UK is stronger when it collaborates internationally, and we wish to work closely with you to welcome Korean companies who want to do R & D in the UK, and to increase and strengthen our partnerships with your best companies and universities. Thank you very much. |
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Other speeches by Lord Sainsbury of Turville
(the following are available from the archive) |
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