Byron, ladies and gentlemen.
The Chemicals industry is, from the Government's point of view, vitally important to the UK's economy, both in terms of jobs and in wealth creation. The figures you have given us on its size and turnover speak for themselves.
But, as you made clear Byron, it is not just about economics and wealth creation. The products of the Chemicals industry make a fundamental contribution to the well-being of each and every one of us, and it is inconceivable to imagine a world without them. Its future is, therefore, extremely important to us all.
I am therefore very grateful for the work that you and the Chemicals Innovation and Growth Team have done. I think this is an excellent Report which identifies the issues, and sets out clearly the actions which are needed. I think it is worth asking why it is so successful and I think it is because it is not a report by Government telling industry what to do, nor is it about Government bailing out industry. But it is about Government and Industry working together to achieve productivity and competitiveness.
And as you rightly point out, many of these actions are for the industry itself.
Reputation is important. Dialogue with all the stakeholders will be vital. And particularly, I feel, among young people, to whom we need to communicate the message that this industry, like bioscience and IT, is where the future lies. The industry needs to be innovative and creative in designing new products and processes, and be at the cutting edge of sustainable development. It needs a workforce that has world-class skills.
And above all it needs to provide leadership for the three thousand five hundred companies that comprise the industry.
I think that the Chemistry Leadership Council and the Networks Groups that you are putting in place will provide the leadership and connectivity which you have identified. I should like to wish Barry Stickings well in his position as Chair of the Chemistry Leadership Council.
At the same time, I recognise that Government, and in particular the DTI, has an important supportive role to play. And I think it is worth noting here that I am very comfortable with the recommendations you have made to the Government, and I agree that the Government's role should be one of support to the industry.
This supportive role extends, as you point out, to the regional organisations that are often acting as the first point of contact with chemicals companies. We need to make sure there is alignment and that there is the right balance between what is driven and delivered centrally and what is done locally. We also need to ensure that the industry can find the help and support it needs from Government much more easily.
We are currently reviewing our approach to business support. This new approach will include an on-line Knowledge Bank that will allow our customers to search for the type of support most useful to them. We are also putting in place an Investment Committee to maximise the impact of our business support in terms of productivity gains. The introduction of this new approach will enable us, over time, to replace the mass of existing schemes with a smaller number which are much more focussed on our objective.
We also recognise the importance of maintaining the competitive locational advantages that the UK offers. You are right that we need to promote and nurture start-up ventures in the UK. I should like to see more chemicals companies starting up and growing in the way that has happened, for example, in the bioscience industry. We have already put in place many of the incentives and networks to make this happen.
We have also encouraged knowledge transfer from universities to industry by introducing schemes such as University Challenge (which provides seed corn funding to universities), Science Enterprise Centres (which provide access to entrepreneurial skills to undergraduates and graduates in science and engineering), and the Higher Education Innovation Fund (which provides funding to universities to encourage them to do knowledge transfer).
I think that it is exciting that these are already beginning to show impressive results. Last year there were 199 spin-off companies from universities, compared to an average of 70 each year for the previous 5 years. There has also been a sharp increase in the number of patents filed, up 22% between 1998/99 and 1999/2000, and, interestingly, the proportion of research income funded by companies in the UK is also up and is now at a higher level than even the USA. In fact, by comparison with North America, in 1999/2000, UK universities identified one spin-off firm for every £8.6m of research expenditure while in the US the ratio was one for every £53.1m.
I think also that the RDA's and the Science and Industry Councils which are being set up can play a major role in making certain that regional networks exist which link together companies and universities.
Innovation is one of the key drivers of productivity growth. It is rightly a central theme of this Report. It is also becoming very much a central theme of my Department's work. You will all be aware that I shall be chairing the Steering Group overseeing the Innovation Review which Patricia Hewitt announced at the end of last month, and I am determined we will strengthen and improve the links between the Research Councils and Industry. So the recommendations to have a Chemicals Innovation Centre is very timely and makes an important contribution to our thinking.
It is important that industry, such as the Chemicals industry, is able to feed its views at a high level to Government on its Science and Innovation priorities. This recommendation is well-made and we will think very carefully about the best ways of ensuring this happens.
Having the right skills set at the right level is crucial for any business. The Chemicals industry, with its strong technical base, is a prime example of this point. This Report makes recommendations on how to achieve that objective, against the background of the new structures – such as the Sector Skills Councils – that are in place. It will be important for the Skills Network Group to work very closely with the Sector Skills Councils to drive up further the skills levels within the industry and above all to ensure we focus on the demand of skills for industry rather than the supply, and ensure that we encourage young people to take up careers in this market.
This Report sets out a route map for the actions that the Chemicals industry and the Government should each take to ensure - in your words, Byron – that there is a vibrant and competitive chemicals industry in the UK for the future.
That is what we all want. The lead clearly lies with the Chemicals industry itself. I shall make sure that my Department plays its part in helping you to achieve that objective.
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