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Stephen Timms MPKnowledge Economy: New Hope Or Old Hype |
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It comes as a surprise to be reminded that the first time the British Government used the term 'Knowledge Economy' was three years ago. At the time I was a Minister at the Treasury and I was surprised on visiting California to see that every billboard carried a web address – as six months later they did in Britain too. Silicon Valley at the time abounded with stories like the one about the Chinese takeaway proprietor who, taking pity on the penniless dishevelled dot com entrepreneurs working in the lock up shop next door, accepted payment for their lunches in the form of shares rather than cash – and ended up a millionaire. We paid a reverential visit to the suburban garage where Hewlett and Packard had started it all by setting up their business in the 1930s – and hype was everywhere. And now, after the crash, where do we stand? Well, I'm on the hope side of this debate. Because we can see today, after all the dust has settled, that it is skills, knowledge and creativity which make the difference. There are compelling reasons for doing business electronically. Electronic links facilitate fast, effective communication, and promote development of better business relationships, faster innovation and greater efficiency. Trading on the internet promises greater market penetration, increased customer response, more flexibility and lower costs. Better and smarter working provides competitive advantage. Small businesses can forge closer relationships with customers and suppliers. I recently presented the prizes in the e-commerce awards which are supported by the DTI through our UK Online for Business project. The overall winner for the smartness of the way it had built its business around the web was a small firm in Glasgow called Global Recycling. As I presented the award to the Managing Director I asked him if any of his colleagues had come with him. His reply was "No, the other person had had to stay behind to keep the business going". There are in the Knowledge Economy immense opportunities for small and innovative firms. One of the questions being considered today is whether minority ethnic groups will continue inevitably to lose out. It is striking to me how much e-commerce activity there is around Green Street, just up the road and probably now Britain's leading Asian shopping street. I met yesterday with the Indian High Commissioner and we were talking about how development of the knowledge economy has led to huge economic growth in Bangalore, with large scale software development and now call centres serving the US and UK market too. British firms like Logica have set up software development centres in Bangalore and Indian firms like the Tara group have invested in the UK. Now comparable developments are appearing in other Indian cities, and in Karachi in Pakistan and Colombo in Sri Lanka where there is a new optimism around the prospects for peace. And the very close ties between many in this part of London and those other areas of the developing world do I believe represent an important opportunity for East London, for the UK and for India, Pakistan and Sri Lanka too. I do not underestimate the challenges which remain in making globalisation work for the world's poor, but here at least is an example where we can see it happening. In the UK, the challenges facing us are clear. We need to exploit our superb science base and promote innovation to create world-class ideas, breakthrough technologies and high value businesses. Firms need to master the art of innovation. Where product lead times are becoming shorter, companies need constantly to develop and adopt the best products and practices available. Businesses need both to collaborate and to compete, to share ideas, to invest in research and development and to take informed risks. They need to 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 the world to do e-commerce. Universities must become much better integrated in the economy, developing stronger links with business and commercial applications for their research. We need to help people adapt to fast-changing market and shifting work patterns so that they don't have to sacrifice their quality of life. It is the task of the government, businesses and unions to lead people through this process of change and to do it by working together. |
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Other speeches by Stephen Timms MP
(the following are available from the archive) |
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