"Knowledge 2000" - Conference on the Knowledge Driven Economy
Stephen Byers
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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