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The Rt. Hon. Patricia Hewitt
Science Strategy Document Launch
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When I became Secretary of State for Trade and Industry, the first thing I did was carry out a review of the Department. This Review gave DTI a clear mission. To raise productivity. To build on the platform of macro-economic stability established in the first term - so crucial for growth and long term investment - and close the productivity gap.
If we matched levels of productivity in manufacturing amongst our lead competitors, we'd be £70 billion better off. For every £100 of production by a French worker – we produce £85. For every £100 of production by an American worker – we produce £72.
A huge challenge. But raising productivity is not about working harder. It's about working smarter. Science and innovation is key.
Importance of Science and Innovation
In today's global economy, we cannot compete on the basis of low labour costs and cheap materials. We can only compete on the basis of our knowledge, skills and creativity. And, in particular, innovation.
We've reflected this in the way we've reshaped the Department. We've created a new Innovation Group – bringing greater strategic coherence to our activities. We will soon be announcing the new Director General of this Group.
The challenge now, and the challenge for the new DG, will be to better connect our science base with industry - making sure that scientific and technological advances are diffused throughout the economy, and used to create new products, processes and services.
Importance to Manufacturing
In particular, we need to get ideas moving through to the manufacturing sector.
Later today, the government will be laying its manufacturing strategy before both Houses of Parliament, as its formal response to the Trade and Industry select committee report on manufacturing productivity.
The productivity gap in manufacturing is starker than elsewhere in the economy, and yet manufacturing produces a fifth of our national income, employs 4 million people and accounts for 60% of our exports. So it really does have a huge impact on our national prosperity.
I find as Secretary of State, one of my main roles is to challenge perceptions about manufacturing industry. At every level we need to rethink views on manufacturing to make it a vibrant and prosperous engine of growth for the economy. I am determined to drive a coach and horses through old-fashioned views on manufacturing. It is a key to future prosperity, our economy and the society in which we live.
DTI is making a step change in support for manufacturing. We published on 16 May a national strategy for manufacturing – the first by any government for over 30 years. We are now working with the RDAs and other key stakeholders to translate the national framework into regional and local action needed by manufacturers.
The key to manufacturing success is to properly harness science and innovation - as I say in the manufacturing strategy.
Not only because science and innovation provides the manufactured products of the future and is a key catalyst for growth; but more particularly because of its huge potential to transform our productivity levels.
Take nanotechnology - offering more for less: smaller, lighter, cheaper and faster devices with greater functionality - using less raw material, less energy.
In short – improving productivity.
A few weeks ago, I published a report by the Advisory Group on Nanotechnology, which Lord Sainsbury commissioned and John Taylor (Director General of Research Councils) led. This proposed ways to accelerate and support the industrial development of nanotechnology applications.
I accept the broad thrust of the Group's recommendations and, over the next few months, will be working out the details of how we implement them.
Nanotechnology is a lot bigger than its name suggests. It has the potential to transform industry. As does E-Science – which we invested £118 million into over the SR2000 period.
The CSR Settlement
Last week's CSR provided an outstanding settlement for science – and through that for British industry, British productivity and British prosperity.
Spending on science and research via the DTI Science Budget will grow from around £2 billion in 2002/03 to £2.9 billion a year by 2005/06. An average annual increase of 10% in real terms.
In 1997/98, the Science Budget was £1.3 billion. So, on a cash basis, it will have more than doubled by 2005-06.
The settlement gives us the opportunity to better connect our science base with industry.
It shows we're delivering on the manufacturing strategy that I published in May. Our manufacturing strategy said that more needed to be done to stimulate innovation and close the productivity gap. Today we're putting our money where our mouth is, with one and a quarter billion pounds to fund our science strategy. Our investment today will help companies innovate to produce the products that people want to buy tomorrow.
Because of the CSR settlement, we are increasing investment in nanotechnology research from £30M a year to £50M a year. We are also using the new £20M Basic Technologies Programme to kick start industrial investment in collaborative research in nanotechnology.
We must be at the forefront of this. And should be. With 1% of the world's population, we currently fund 5% of the world's science; produce 8% of all the world's scientific papers; and get 9% of scientific citations.
We are also getting better at innovation. In 1999/2000 there were 199 spin-offs from UK universities, compared with 70 a year on average in the previous 5 years. Per million dollars of research this is a better rate than even the Americans achieve.
With the additional resources announced in the CSR, we should be able to improve our levels of science and innovation – and get even better at diffusing them throughout British industry.
(the following are available from the archive)