John Denham - Technology Strategy Board Innovate '08 Conference

Introduction

I'm very pleased to be speaking here today. Over the past year the Technology Strategy Board (TSB) has really moved forward. Their work is all about helping to create a climate which fosters innovation, and this event is certainly part of that process. And I believe the work that you are all engaged in couldn't be more important in these extraordinary economic times.

We are living through a truly global financial crisis where every country in the world is affected and in some ways you might say that the laws of economics are being rewritten.

It's our duty in these times - as the Prime Minister has said - to do everything we can to ensure the stability of our financial system and the security of millions of families. Families who have been facing higher bills and now face the uncertainty caused by financial failures in America and elsewhere.

We know that no government in the world can single-handedly prevent economic slowdown, but in this country we have stepped in to support financial stability - helping to rescue banks that may have gone under, protecting ordinary investors and trying to keep markets moving.

And Government itself must change and adapt so that it can meet these new challenges. In challenging times such as these, the role and actions of Government become even more important - for businesses, for families and for each one of us.

That's why the P{M has created a new Economic Council, of which I am a member. That's why we have a new Department of Energy and Climate Change. That was already one of the reasons why DIUS was created last year. And that's where the work of the TSB comes in.

I believe that the work of DIUS and the TSB are even more important in today's difficult times than ever before. Our ambitions for innovation provide us with lessons about how Government should act when times are tough.

I'm told that businesses and people involved in innovation are starting to feel the change in attitude towards innovation in Government, but today I want to raise our sights even higher.

Increasingly, people recognise that innovation is essential to our economic prosperity and our quality of life. Innovation is the successful exploitation of new ideas across society.

By supporting innovation in both business and public services, people develop new skills. We create new markets. We secure long term economic growth. And we make a difference today too.

So when we're faced with events like today, we have to use every power of government to make our society stronger, fairer and more secure. We do have to make sure that every taxpayer's pound works as hard for the country as they first worked to earn it.

When you look at my department, for example, our £2.3 billion capital plan to develop new low-carbon buildings for further education colleges. When we build a great FE college, we don't want to just build a building. We'll be training the people who build it so that they get valuable skills for the future.

Then there are the businesses who will develop greater technical know-how to transfer onto other projects. Together it creates a legacy that goes far beyond the colleges themselves - establishing the market for the energy-efficient buildings of the future.

DIUS is also the champion of innovation across Government. So wherever we invest in public services and support business, we intend to get the maximum value from taxpayers' money.

We want to ensure as far as we can that the buying power of every government department buys the new products that are made by the new companies that use the new science, that tackle the challenges of our time.

That's in part how British business and British people will benefit from up to one million "green collar jobs" - and the prosperity they'll create in the coming years.

Innovation Nation

"Innovation Nation", our White Paper published in March, set out our goals for promoting innovation in business, public services and in Government itself.

The White Paper marked the start of an ambitious journey for Government, and one that cannot succeed without the involvement of the everyone in this room.

At this point I'd like to publicly thank Ian Pearson who isn't in the room but who did so much to drive the innovation agenda and who led the production of Innovation Nation. As many of you may know, following the reshuffle we welcome Paul Drayson as the new Science and Innovation minister. Paul is here and will be speaking to you this afternoon.

What we all understand as policy-makers is that we have important demand-side levers; through procurement, through regulation and through the impact of the policies.

These demand-side measure can be at least as influential in establishing the conditions for innovation as the allocation and distribution of funding through the science and research budget.

That's why Government must fully understand its own role - be aware that what it does has an enormous impact in shaping new markets and encouraging demand for different kinds of products and services. Paul brings his important experience as a minister responsible for defence procurement.

Government procures to the tune of £150 billion every year must be used to drive innovation.

With regulation too, we can create the conditions that provide certainty for companies moving into new and growing markets - like nuclear energy. We expect £100 billion to be spent on renewable energy alone over the next 12 years. By taking the right steps now and setting stretching standards, we can ensure that Britain develops the necessary skills and infrastructure to take full advantage in this sector.

That's the context in which the TSB operates. It has roots in the work of David Sainsbury and is progress is something for which Iain Gray can take credit.

Technology Strategy Board

The TSB has a key leadership role in stimulating innovation. I'm very encouraged by the Board's progress since it was established little more than a year ago - and highlighted in its recently published strategy.

And I welcome the TSB's involvement in promoting a new approach to innovation that's based around global challenges. Climate change, our ageing population, pressure on resources and the need to adopt more sustainable patterns of living - these are issues that will really determine the future of the UK and the wider world in the 21st century.

The work of the TSB will help address these challenges by supporting work to develop the technologies of the future - low carbon vehicles and transport systems, aerospace, healthcare and photonics. Many of these areas, I know, are being examined in more detail during today's sessions.

Iain Gray has already given you an update on everything the TSB is doing and how it drives the innovation agenda.

But I just want to highlight three striking examples.

One is the formal announcement today that the North East RDA will participate in the Low Carbon Vehicles Integrated Delivery Programme. This is great for the North-East because the region has major automotive, components, materials, petrochemical and fuel industries, including Nissan as the largest car manufacturer in the UK, their supply chain, Caterpillar and the largest fuel production industry.

The five-year programme is designed to integrate university and industry R&D activity to accelerate the exploitation of radical approaches to decarbonising road vehicles. It's a substantial programme too - with an initial investment of over £100 million in public funding, which we expect to be matched by at least £100 million from the private sector.

Alongside the TSB and North-East RDA, programme participants include the Department for Transport, the EPSRC and Advantage West Midlands. This is a great example of collaborative innovation in action.

It's work that will help to secure the long-term future of the British car industry - the people who work in it and the places whose wider economies hinge on attracting international R&D and proving their capacity to add value.

This work will complement the major new pilot programme for electric cars announced by the PM in the Manufacturing Strategy.

It illustrates the Government's determination that UK industry should achieve a large stake in the emerging green collar sector.

The second example is a new Innovation platform, which the TSB is launching today.

An innovation platform, as many of you know, is a co-ordinated approach to innovation, pioneered by the TSB, in areas which address a major policy and societal challenge. It engages business and researchers to find appropriate areas for development, and supports programmes that deliver innovative solutions.

The new platform is targeting an area of great human interest - which is how we detect and identify infectious diseases more quickly and effectively. It plays to this country's great strength in medical research, to our international leadership in bioscience and pharmaceuticals. It promises benefits to people using the NHS.

My final example is also a new project, this time in the field of plastic electronics, where the UK is in the forefront of research and hosts key companies throughout the supply chain.

VideoFLiCs is a partnership between Plastic Logic and Liquavista, with a £6.1 million invested from the TSB. It aims to develop the first generation of full colour, flexible video-rate displays - offering the potential for products such as electronic newspapers that can show moving images. The first company to bring such technology to market will open up a £4 billion opportunity, with benefits for established industries like printing.

This project demonstrates the commitment to investing in the growth sectors of tomorrow.

Looking once more at the wider context.

Innovation Nation Progress

My department will publish the first Annual Innovation Report later this autumn, which will look at what we have achieved since the White Paper. This was something that Lord Sainsbury recommended in his earlier report on science and innovation in the UK.

The Annual Innovation Report will be the first comprehensive report on the innovation performance of the UK - across the public, private and voluntary sectors.

Alongside the AIR, we are committed to ensuring that all Government Departments produce their own Innovation Procurement Plans by 2009. My department will shortly publish guidance for other Departments on how to do this, and will also publish its own procurement plan.

As many of you will be aware, we are also working with the Technology Strategy Board to implement the Sainsbury Review commitment to reform the Small Business Research Initiative.

Pilots of the reformed programme are currently underway in the MoD and Department of Health; and we are working towards implementing the reformed programme across Government from April 2009.

My department is also working with the RDAs to incentivise innovation in SMEs through offering innovation vouchers to enable them to access expertise in the UK knowledge base. Building on the successful West Midlands pilot, we will soon see similar schemes rolled out in a number of other regions, working towards our target of 1,000 vouchers per year by 2011.

And today I can announce the publication of the Lambert Toolkit for collaborative research on our DIUS website.

Research is increasingly carried out in multi-disciplinary projects which involve several partners. The new toolkit provides a set of multi-partner consortia model agreements. We hope that these agreements, along with accompanying guidance, will help parties to negotiate productive and fair research collaborations.

I am grateful to Richard Lambert and the Lambert Working Group for all their hard work on this initiative - facilitated by the UK Intellectual Property Office.

Conclusion

I've set the innovators of Britain some ambitious challenges. "Innovation Nation" has raised expectations. The Annual Innovation Report will establish new benchmarks.

Department procurement plans, SBRI, the ongoing work of the TSB - our approach to driving innovation is moving to a new level. We're fundamentally changing the way that Government works.

I recognise that it's time to show we can deliver. To identify and implement ground-breaking and sustainable solutions to the challenges we face in 21st Century Britain. To develop innovative products and services that exploit the full talents of our people, grow our economy and improve our quality of life.

I can persuade Government departments, business and public services that innovation is not just a better way of working in more favourable economic times. It's vital for us in more challenging circumstances too.

Innovation policy - and the TSB in particular - show how Government can and must get the best value for every pound that it spends. This at a time when what Government does is even more important for businesses and for the economy than ever before.

Innovation is a vital part of how we organise our response to today's challenges as well as to those of the future.

And our capacity to innovate will make or break the British economy and the standard of living of the British people in the 21st Century.

So together, we have a great deal to do, but I do think an enormous amount of progress has been made and will be made in the future. Thanks.