| Chairman, ladies and gentlemen.
I am delighted to have this opportunity to speak to you in Houston today. I would like to begin by adding my thanks to those who have collaborated to make this Event possible. The Greater Houston Partnership of course. No single organisation has done more to promote the excellence of Houston. The British American Business Council - Southwest, in itself a fine example of the bilateral collaboration we are striving to achieve. The Houston Technology Centre/Bio Houston and the Rice Alliance for Technology and Entrepreneurship.
Can I also say that I have wanted to return to Texas for a long time in order to see for myself the very considerable achievements of your scientific and medical institutions, most of which have world prominence. Everyone is aware of Houston's image as the 'space city' but they are probably less aware of the literally thousands of technologies that owe their genesis to the manned space programme. Everything from cellphones to non-intrusive medical devices However, its significance as the world oil and gas capital often overshadows it's very diverse nature and there is a tendency for the research communities on the east and west coasts to minimise the importance of activities which they are not in their immediate vision. But we in the UK do not underestimate the importance and potential of the USA's 'third coast' and its hinterland.
Houston hosts the largest medical centre in the world comprising some of the best hospitals in the world and several of the most highly esteemed universities. It has a justifiable claim to lead in many research areas including aspects of nanotechnology and superconductivity. The International Space Station will provide an environment for scientific research hitherto impossible in terra-gravity. And Texas is very quick to capitalise on the commercial opportunities that this research provides.
I am following closely on the heels of our Prime Minister, Tony Blair, who was in Texas as the guest of President George W Bush in April. In a speech he delivered at Texas Agricultural and Mechanical University, he drew attention to two specific areas where he believes there must be greater collaboration between our two countries. One is science and technology, particularly biotechnology and genetics, technologies which look set to change all our lives. I very much share this view. The second is energy policy; and my colleague Brian Wilson, our Energy Minister, is expecting to be here later this year to follow up on this extremely important issue.
I have a fascinating and extremely comprehensive programme in Texas. Yesterday afternoon I visited Rice University at the invitation of Malcolm Gillis. Malcolm was our guest in the UK last year where he spoke to the Royal Society in Edinburgh about the strength of research at Rice University. I was delighted to see at first hand what he had described. This morning I visited the University of Texas Life Sciences Centre and this afternoon I will be driving down to the University of Texas Medical Branch at Galveston. Tomorrow I will be in Austin where I will meet the Secretary of State and key members of the Governor's science advisory council. I am also scheduled to visit the University of Texas at Austin and a number of local companies including our own BAE SYSTEMS and on Saturday I will be in San Antonio as the guest of the Southwest Research Institute and UT Health Sciences Centre.
I have spent this week in the USA because I see great scope for collaboration between our two countries. The UK has an excellent track record in scientific discovery. We are justly proud of our basic research, whether it is the performance of our most eminent scientists - reflected in the list of Nobel laureates, 44 in the last 50 years - or broader indicators of research performance in the form of academic papers. In the UK we have 1% of the world's population, we do 4.5% of the world's science, produce 8% of the world's scientific papers, and receive 9% of the citations of those papers. In fact UK researchers are amongst the most prolific in the world, producing 16 research papers per $1 million of research funding – ahead of Japan, with 3.6, and, what may surprise you, even yourselves with 9.2. As a result, Britain is home to strong science-based industries such as aerospace and pharmaceuticals. Fifteen out of the world's top 75 medicines were discovered and developed in Britain; and Britain is also the leading European centre for optoelectronics, computer games and mobile telephone software and services.
An example of British innovation which may be of interest to you is the 'Autosub'. This is an incredibly versatile long-range autonomous underwater vehicle designed by Southampton Oceanography Centre, a collaborative venture between the University of Southampton and the Natural Environment Research Council (NERC). The autosub is capable of collecting, measuring and recording a massive amount of subsea data. It is a world first and a huge step forward for the offshore oil and gas industry. Halliburton Subsea have recognised this and signed an agreement with Southampton University giving them exclusive use of the technology and know how which led to the Autosub development. It is but one example of many.
Modern science cannot thrive in isolation - the internationalisation of research means that technology developments are now global in nature. No one country has the monopoly on scientific expertise nor does any one Government have the resources to fund all aspects of scientific research. This means that if science is to progress, there must be collaboration between Governments, interchange between international science communities and closer links between science and business, both at home and abroad.
We have already been active in Texas. We have brought software, precision engineering and telemedicine missions here. We have brought two successive aerospace missions into Clear Lake. As a result UK and Texas institutions and companies are collaborating or discussing collaboration in a number of areas, with University of Texas Medical Branch on telemedicine, with M D Anderson on cancer outreach, with South-western Research Institute in San Antonio on application of US led research in Formula One racing. And we have numerous ongoing discussions with NASA establishments stemming from initiatives taken in Texas.
I am delighted today to be able to announce that a major new collaboration is being developed between UK universities led by Imperial College in London and Texas universities led by Rice University, which will lead hopefully to many fruitful partnerships between American and British universities.
Our ambition is to become the partner of choice for international scientific and business collaboration. We see the UK as both a European and a global hub for research and development - at the leading edge of research and innovation in key hi-tech industries, and in the innovative application of technology in the service sectors. I believe that we are already some way towards achieving this goal, but we are aware that we must continue to improve our performance and to keep abreast of the rapid developments taking place throughout the World if we are to convince the international science and business communities of the benefits of collaborating with UK scientists and of investing in the UK.
There are many ways that governments can assist in making their country's science competitive, innovative and attractive to investors. In Britain we are convinced that governments need to act both as investors and facilitators. Specifically, they can strengthen the science infrastructure in colleges and universities, they can establish an efficient legal and regulatory framework in which international business collaborations can thrive, they can encourage the science community to adopt a more commercial focus and, last but certainly not least, they can actively promote the strengths of their science and business generally and seek out and encourage overseas investors.
I believe that, in the UK, we have made great strides in all of these areas but I would just like to take a moment to highlight some particular points of interest.
Firstly, in the last few years we have greatly strengthened the science base. At the last review of Government spending in 2000 we put significant additional resources into the budget for science and technology so that today it is increasing at seven per cent per year in real terms.
Secondly, we have given incentives to our universities and research institutes to encourage them to work more closely with industry. We have introduced 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 £140m Higher Education Innovation Fund (which provides funding to universities to encourage them to do knowledge transfer). And what is very exciting is that we are beginning to see the rewards from our efforts. The figures are encouraging - 199 spin-off firms in 1999/2000 compared to an average of seventy a year in the previous five years; the proportion of HEI research income from business up to 12.3% in 1999/2000 from 10.9% in 1995/96; and total patents filed up by 22% from 1,259 in 1998/99 to 1,534 in 1999/2000.
We have also had great success in encouraging inward investment into the UK. Last year saw record figures as companies world-wide recognised the UK as the business centre of Europe. Invest·UK (formerly the Invest in Britain Bureau) announced over 850 investment projects from 35 countries creating over 70,000 new jobs. As in previous years, easily the largest source of new investment was the US which accounted for over 420 projects and over half the new jobs. A recent Ernst and Young report put the UK as the top destination for inward investment in Europe with 19% of the total investment.
Projects covered the whole spectrum, from automotive to telecoms from chemicals to software, and included a wide range of business activity from research & development to manufacturing and customer contact centres - the very diversity emphasising our broad appeal as a country in which to do business.
For US companies seeking to expand their operations in Europe, the business benefits of doing so from the UK remain clear:
- a skilled, hard working, flexible workforce
- low corporate & personal taxes
- ease of doing business
- world class research universities – which are now very much involved in knowledge transfer -
- excellent access to other European and global markets and
- a leading telecoms & e-business market
A recent KPMG report on the lowest cost locations had the UK as the lowest cost base in Europe, well ahead of Germany, France and the Netherlands.
Finally, there is a strong international dimension to all our policies. We believe that action to encourage innovation at the national level is not enough. We must lever our resources by co-operating globally. As companies respond to the new challenges of the knowledge driven economy it is essential that the Government provides the best framework for scientists and businesses to make international links. As Tony Blair said in his recent speech to the Royal Society:
"Science is both internationally competitive and internationally collaborative. If we are to remain an innovative, forward-looking nation, we need to retain the capacity to do this work both on our own and in collaboration with scientists in other countries."
The UK's Foreign & Commonwealth Office, therefore, announced in March 2001 that it would double the number of countries with dedicated Science and Technology Officers working in UK missions overseas and strengthen the existing units in some key countries. These officers will report on science policy and technology developments, and encourage collaboration, inward investment and trade, developing links for the benefit of the UK research community and industry. The S & T officers are currently located in the key areas across North America, in Europe and in the Asia Pacific region. Further appointments are to be made in Scandinavia, Central and Eastern Europe, the Far East, South Africa and Brazil. In the USA we now have S & T officers in Washington, Boston, Los Angeles, San Francisco and, I am pleased to say, here in Houston. Dr May Akrawi, who is here today, is the most recent appointee to Houston from where she will cover the rest of Texas. We have also doubled the number of International Technology promoters dedicated to the US market. These are a group of skilled scientists and business people, located in the UK but travelling very widely, dedicated to establishing collaborative ventures between UK and US institutions and companies.
I hope that I have succeeded in giving you a flavour of the quality of UK science and innovation, and the advantages of the UK as a European business base. In the United Kingdom we believe that a society that is closed, inward looking and defensive will not long remain at the forefront of science and innovation because it cannot take part in global collaboration. We believe that the United Kingdom is stronger when it collaborates internationally and we want the United Kingdom to be a key player in European and global science and innovation and we believe there are enormous benefits to be gained through closer scientific and commercial collaborations.
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