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John Denham - British Innovation
American Association for the Advancement of Science, Washington DC - 22 April 2008

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Introductory remarks

Good afternoon. I'm thrilled at this opportunity to speak at the "Triple A-S". I'm also delighted - and rather relieved - to see so many of you here on a day when the star attraction is clearly Stephen Hawking.

Obviously, I'll leave discussions of cosmology and quantum gravity to the Lucasian Professor of Mathematics at Cambridge. Instead, I'm here to learn more about American science and innovation.

Besides spending time in DC, I'm also visiting the Research Triangle in North Carolina and also Boston to see how they go about generating links with academics to investors. To discover how research clusters grow and sustain themselves. And to find out how US institutions are gearing up to investigate the global challenges confronting us all in the 21st century.

In the spirit of your mission at the AAAS - "to advance science, engineering, and innovation throughout the world for the benefit of all people" - I want to outline how my government is developing policy in these areas, and how we're steering the UK research base on an international course.

Speaking as a government minister, I recognise that these days, national leaders must be concerned with both competition and collaboration.

Citizens expect their governments to create the conditions for economic success: for the ability to compete in globalised markets, for prosperity in which everyone can share.

In my area of responsibility, that means sustaining the strength of the UK science base and our university system - and in creating the right environment for innovative business.

But it is equally a feature of the modern world that scientific quality, academic eminence, and successful businesses depend on international cooperation - scientific collaboration, the interchange of academics and partnerships between universities, relationships between global corporations and innovative start-ups.

Indeed, this is a process from which we can all expect to benefit - the rising tide should lift all ships.

Yet, it is also true that we face profound global challenges that we cannot overcome without international cooperation: climate change, food security, terrorism, and - in the West, at least - ageing societies. All these issues require the cooperation of researchers and academics, of policy makers and business leaders.

So the reality of the modern world is that the pursuit of what is in the best interests of our citizens and our nation depends not just on our national efforts in science and innovation, but on the quality of our international cooperation and collaboration. Competition and collaboration are not in conflict with each other, but intertwined; success in each is dependent on success in the other.

What I want to do is to try to explore how the UK is gearing up to the challenges of a globalised world and is working towards increased cooperation overseas, especially with the US.

DIUS story

Now, as the very first secretary of state for innovation, universities and skills, I should explain how my department - DIUS for short - came about.

Created last summer as one of the first acts of Gordon Brown's government, DIUS brings together in one place three policy areas critical to Britain's future.

Those three strands are all about developing the skills of our people - everything from basic literacy and numeracy to the advanced techniques used in postdoctoral research.

It's about strengthening our research base - second only to this country's - and our reputation for pioneering scholarship.

And it's about combining those skills and that research to create the conditions whereby Britain becomes the place of choice to run an innovative business and deliver high-quality public services.

This agenda now has a much higher profile in Cabinet. Our challenge at DIUS - which also embraces organisations like the Technology Strategy Board, the Energy Technologies Institute and the Intellectual Property Office - is to make sure that these policy strands intersect at every level.

Our success will be measured by the extent to which we have a competitive economy - a considerable challenge in the face of globalisation; climate change; the accelerating pace of technological development. A world in which people, money and knowledge are increasingly mobile, and in which powerful nations are re-emerging with huge resources and great aspirations.

But we also believe that skills, research and innovation are essential to achieving the kind of cohesive society that, for the past 10 years, has been an enduring goal of the British Government. A society where individual talent is unlocked. Where no-one is left behind and where everyone can participate.

UK science and research

Turning specifically to science and research, it's not unreasonable to claim that UK output is world-class.

The UK leads the entire G8 on productivity and efficiency measures - reflecting the intensity and concentration of our research activity. Three-quarters of the state investment channelled to universities through our seven research councils goes to just 18 institutions.

With just one per cent of the world's population, we carry out 4.5 per cent of the world's research and claim an eight per cent share of the world's scientific publications. That's second only to the US in terms of research output.

The strength of American science is there for all to see. In recent years, about 45 percent of the world's internationally co-authored articles had at least one U.S.-based researcher among their authors.

But present capacity is no guarantee of future success. Other countries are fast developing their research capabilities. Not just China and India, but parts of the Middle East as well. We must compete for global R&D and for the most gifted scientists in each generation.

Investment

Which is why in Britain, we have made a sustained commitment to funding the research base. Since the Labour Government came to power in 1997, the ring-fenced science budget has grown by more than two and a half times.

For the current three-year spending period, the science budget is increasing by 17.4 per cent - a real terms increase of 2.7% each year - provided our inflation targets are met over the next three years. This is a significant statement of intent given tough economic conditions worldwide. It means we continue to attract some of the brightest minds internationally, and R&D from some of the biggest US companies: Boeing, Pfizer, Microsoft, Ford, Hewlett Packard.

Taking steps to ensure that this investment to have lasting value, all projects funded through the research councils will be at 90 per cent of full economic cost. This means that the host institutions - typically the UK's great universities - are funded properly and for the long term - for the research that they carry out.

I would also underline our longstanding commitment to fundamental research. The majority of the £6 billion annual science budget is spent on fundamental or blue skies research. It is a long established principle in the UK that whilst Government sets the priorities and allocates funds at a headline level, it is the scientific community that decides how to spend the money.

Some £2 billion each year is allocated directly to those institutions that have the strongest track records in research. But it is also my job as Secretary of State to set a broad framework and to set some key objectives for the research community. So for the next three years, around one fifth of the science budget is allocated to a series of grand challenges that now face the world. It is clearly not for me to determine how scientists will approach these challenges but I believe it is right to focus efforts in particular areas.

The four thematic programmes

We've taken this step in the latest science budget, by asking the research councils to fund four new thematic programmes: energy, the environment, lifelong health, and global security.

This represents an unprecedented effort to forge stronger links across the UK's scientific community and beyond - and to make headway on challenges certain to pre-occupy every society for decades to come.

Challenges like the growing pressure on natural resources and mounting evidence of climate change; a rapid increase in the old age dependency ratio; and the ongoing threat of international conflict and terrorism.

We have unequivocal evidence from the Intergovernmental Panel on Climate Change on the role of human agency in global warming. Our dependency on fossil fuels is clearly unsustainable. Each year 10.9 million people worldwide are diagnosed with cancer and an estimated 33 million people are living with HIV.

By focusing on these four programmes, our aim is to find solutions on hydrogen storage that could enable the mass production of non-polluting cars, or identify new treatments for disease.

Each of these challenges transcend national interest and borders. The real answers will only come through international collaboration - through combining the strengths of our research base with those of our partners overseas.

International efforts like the Centre for HIV/AIDS Vaccine Immunology, led by a consortium of investigators including Duke and Harvard, Oxford and Imperial College. Or like the stem cell research for which Martin Evans of the UK and Oliver Smithies and Mario Capecchi of the US took last year's Nobel Prize for medicine.

Innovation Nation

Indeed, I'd like to dwell on our own efforts in medical research, not just because it's an area of strength for the UK, but because it is a way of explaining how we're seeking to become an "innovation nation" - the title of my speech today, and of the White Paper recently published by my department.

Quite simply, innovation is essential to the UK's future economic prosperity and its quality of life. To raising productivity, fostering competitive businesses, meeting the challenges of globalisation, and living within our environmental and demographic limits.

The White Paper demonstrates how we in government are applying a new understanding of innovation. Not simply investing in science and research as something that may eventually lead to economic success - but also now recognising that there are a multiplicity of sources for new ideas. Innovation will continue to come from investing in world class science and research but it will also come from other places. From users and consumers, from the public as well as the private sector and from processes that depend on continual collaboration and refinement.

Innovation in medicine

Let me put this in the context of UK medicine and healthcare, where it's fair to say that the UK has an outstanding record on fundamental research - and for which names like Fleming and Crick have become emblematic.

Where we've been less successful is in translating discoveries into clinical practice. With a National Health Service providing cradle-to-grave treatment for the vast majority of the population - and generating enormous knowledge as a result - we're determined to exploit the unique opportunities its presents for trialling new research to the benefit of patients.

First, the budget for our Medical Research Council is growing by some 30 per cent over the next three years. It will be of interest to this audience - and will underline my key theme today - that around one quarter of the work supported by the Council involves some degree of US/UK collaboration.

Second, we've established a new strategic office for health research, which will communicate the UK's health priorities through a series of regional Innovation Centres for the NHS and directly to universities and to health research centres. It will also draw in private sector partners such as those in the pharmaceutical and bioscience sectors.

We've also given the green light to two major capital projects. One is a new laboratory for molecular biology in Cambridge - where the existing facility has produced no fewer than 13 Nobel Laureates. The other, based in London, is the UK Centre for Medical Research and Innovation - a collaborative venture involving the university, research and philanthropic sectors.

Set to open in 2013, it will have state-of-the-art facilities and access to teaching and specialist hospitals. Its breakthroughs will be trialled in and adopted by the NHS. As the Prime Minister, Gordon Brown described here last week, this centre will be Europe's largest medical research centre and will bring together experts from America and Britain to increase our understanding of diseases such as cancer, improving knowledge, treatment and rates of cure. And we expect it to be a leading institution for the training of scientists.

Our aim of building an "innovation nation" also applies to transforming our public services from pensions to schools; from play facilities to public transport. In health for example, through intelligent procurement and an annual budget of more than £90 billion, we can support even greater innovation and successfully address the ever more complex demands of NHS users.

Central to our strategy is the understanding that our policies, together with spending on research and on the NHS, shapes the market and the eco-system for innovation. By creating new markets in, say, IT and pharmaceuticals. Improving risk management and performance measurement to attract venture capital. Boosting the skills of a million-strong NHS workforce and of those involved in its supply chains.

At the same time, we're now harnessing more 'best practice' from users and from professionals delivering services. For example, the Productive Ward programme has adapted the "lean thinking" concept first pioneered by the car industry to help front-line hospital staff to devote more time to patient care.

To conclude, we want the quality of the research base in health, combined with the markets centred on the NHS, to help attract even greater levels of R&D from the global pharmaceutical and biotechnology industries. We understand the building blocks of innovation here - strategies for knowledge transfer, the impact of early adoption.

But for us to realise an innovation nation, the White Paper has a much broader remit. We need to go beyond established strengths in financial services, the creative industries, and aerospace. To boost venture capital as a share of GDP, which is still only half the figure of the US. To improve our skills base across the piece.

I don't intend to cover the whole spectrum of activity today. Instead, I'd like to highlight four themes where government has a role to play and where we're looking to up our game.

Business Innovation

First, supporting business innovation.

Government obviously plays a critical role guaranteeing the framework in which businesses can innovate. The UK ranks highly in terms of a conducive regulatory and fiscal environment. We have maintained an effective macro economic environment with the right mix of flexibility, certainty and support.

I also believe we're making progress on establishing the right infrastructure for innovation. We're developing better ways for businesses to forge links with the research base through strong universities and institutions such as the Energy Technologies Institute and the Technology Strategy Board.

We are also launching a new voucher scheme for companies based in England to pay for initial engagement with universities and other institutions.

Finally we are taking the most ambitious approach yet to using public procurement as a key way to support and grow innovative businesses. As the single biggest customer in the UK economy - to the tune of £150 billion annually - government can send important signals indicating future demand and boost nascent markets. As an early adopter, it can convince fledgling companies to forge ahead with new technologies.

Indeed, the Chancellor of the Exchequer expressed his wish in the latest budget that SMEs should win 30 per cent of government procurement in the next five years.

The requirement for every government department to publish an innovation procurement plan will be instrumental here. Developing targets and commissioning strategies that enable rather than stifle the purchase of innovative products or groundbreaking services, it will be DIUS's role to promote innovative procurement across government and facilitate the open exchange of good practice.

In particular, I'm keen that the UK's Small Business Research Initiative for bringing quality R&D to the public sector starts to match the success of the equivalent programme for high-tech SMEs in the States - on which it was modelled.

Innovative places

Second, we're exploring how to address the variability in innovation performance around the UK. Despite the communications revolution, there remain powerful benefits to innovation clusters. Proximity breeds trust, helps to disseminate knowledge and keeps innovative organisations close to their primary markets - as the DC metropolitan area, with its growing venture base and access to research-driven federal agencies, so vividly demonstrates

More than that, clusters like DC's, or the Research Triangle, are the building blocks for international cooperation on the scale needed to address the global challenges I've been highlighting.

We have six Science Cities already in the UK, where public-private consortia are supporting business and driving regeneration. We're developing 20 new university centre with similar goals in mind, and two science and innovation campuses to attract international R&D.

Daresbury, near Liverpool, is already home to the likes of Sun Microsystems and IBM. GE Healthcare and the Newport Corporation are among the companies investing at Harwell, near Oxford.

There will be further opportunities for overseas investment and collaboration. DIUS will be sponsoring a number of New Partnerships for Innovation to bring together venture capital, universities, business and regional government in places where there is clear potential for new clusters to take root and grow the knowledge economy.

People

The third point is about people and the mutually-reinforcing relationship between innovative businesses and a highly-skilled, creative workforce.

This is, of course, a key focus for DIUS, and we're promoting greater take-up of science, technology and engineering subjects at schools, colleges and universities.

Remodelling the whole training system around the needs of companies and individuals, so that employers can source the right training for their staff, and people have greater opportunities for self-advancement.

And we're encouraging universities and businesses to work much more closely, not only in terms of research, but in the provision of high-level skills.

International efforts

My fourth and final point concerns the internationalisation of research and innovation - the reason I'm here in the US.

Clearly, innovation increasingly cuts across national boundaries, with businesses internationalising their R&D, their supply chains and customer bases. The people who drive innovation are also increasingly mobile, as is venture capital.

We're committed to making the UK one of the most attractive places in the world for mobile R&D-intensive businesses to invest and for academics to come and work.

Currently, around 20 per cent of academic staff in the UK hail from overseas. Among doctoral students in the sciences, engineering and maths, it's closer to 40 per cent. About the same percentage of UK science papers have an international co-author.

I have already explained how the proportion of internationally co-authored research papers is increasing and how we must work together even more in order to respond to new scientific and economic challenges. It is clear that the relationship between US and UK science is already extremely strong.

The UK is the leading overseas recipient of funding from the US National Science Foundation. The NSF currently funds 101 research collaborations with the UK. This includes 15 US Research Fellows working in the UK.

The UK is the leading overseas recipient of funding from the US National Institutes of Health. Total NIH funding to UK universities, research organisations and companies is around $81million per annum. Of this, about 40% comprises of grants and fellowships won in open competition, with 60% being contracts, often to UK companies with specialist expertise such as in bio-defence.

The UK research base also benefits from other research contracts or sub-contracts from the Department for Homeland Security, Department of Energy and a number of other federal and philanthropic research funders.

During his visit to the US last week, Gordon Brown emphasised his desire to further trans-Atlantic links through study opportunities and exchanges, philanthropic partnerships, and collaborative research in areas including healthcare and the environment.

He described a new initiative where the Principal of King's College, London and the President of New York University are convening a group to examine how co-operation between UK and US institutions can be intensified, starting with expanded faculty and research exchanges.

An example of this is the Royal Society's 'Newton International Fellowship Scheme'. This will be launched in June and will cover all fields of research and provide for funded alumni activities for each fellow at the end of their fellowship.

Another good example is the Worldwide Universities Network. Involving leading British Universities and US State Universities as well as other partners, WUN has more than 3500 academic staff involved in over 50 research collaborations.

I'd like to highlight some channels and initiatives which are already up and running.

First, DIUS is assuming management of the UK's Science and Innovation network, which operates through our embassies worldwide. Driving scientific collaboration, R&D and technology transfer, its greatest concentration of offices is in the US - where the climate change agenda and work with individual states on promoting carbon markets has become a major focus.

Second, DIUS is also taking over responsibility for the UK Government's Global Science & Innovation Forum - or GSIF for short. GSIF is chaired by the Government's Chief Scientific Advisor and membership is drawn from across Whitehall such as DIUS, the Foreign Office, the Department of Health and the Department for International Development and key non-governmental actors such as the British Council, the Royal Society of London, and Research Councils UK. It provides strategic guidance and systematically scans the horizon for new and emerging issues.

GSIF are the main players in the promotion of international R&D in the UK, coordinating a more evidence-based approach to international engagement, ensuring UK intervention in this area adapts to the evolving international economic and research environment and evaluating the success of UK interventions.

Third, Research Councils UK, the umbrella organisation for the seven research councils, opened an office here in Washington last year. It is co-located with the Embassy science team and its main aims will be to work with US funders to share priorities and pursue and promote collaborative research opportunities.

The Office will facilitate further collaboration between US and UK researchers; promote the movement of researchers between the US and UK and access to facilities, data resources; and work with US research organisations in influencing the international research agenda and promote the excellence of the UK research base.

Already, RCUK is working with federal agencies and US researchers on advancing the major programmes I mentioned earlier. For example, the Department of Homeland Security and one of our councils have identified challenges in cargo screening, with a bilateral conference on security planned for later this year.

Elsewhere, the Research Councils are working with your National Science Foundation to establish new joint calls for collaborative research on climate change.

This builds on the previous development of "science bridges" - a scheme forging links between experts in defined fields.

The universities of Manchester and Washington, for example, are in a consortium with aerospace companies developing composite materials for use in aircraft design.

Imperial College is involved with the University of Texas, Georgia Tech and Oak Ridge National Laboratory in two areas - energy research and treatments for cancer.

It's a model that's proving successful. Which is why we're continuing to fund the US bridges and now extending the scheme to China and India.

Third, we are seeking to encourage greater collaboration between the UK and overseas scientists on a more personal basis. The new Newton International Fellowship Scheme, for example, will focus on building a strong alumni network, so that collaborative relationships can be maintained over the longer term.

Efforts along all these lines are important, not only as global competition intensifies, but because only international collaboration can generate the critical mass necessary to tackling the global challenges I've outlined.

Conclusion

Having covered a fair bit of ground in a short time, I'll close by summarising where we hope our efforts will lead five years from now.

Looking ahead, I want

  • our research base to have maintained its leading ranking for output, and improved at exploiting its own intellectual property;
  • the UK to be increasingly attractive to international investors, thanks to more markets for innovative products and services, and a flexible regulatory environment;
  • greater, measurable innovation among UK businesses - and in more parts of the country;
  • and for British people to identify their nation as innovative - because they are developing skills for themselves, they can see improvements in schools and hospitals, and because of a growing public understanding of science and technology.

This last point isn't just an argument for better-informed consumerism. It's crucial for our democracy, since the pace of scientific change calls on the public to take a view on such complex issues as genetically modified food, biometric data, animal experimentation.

To make such political and ethical choices, ordinary people need to be better informed - to understand how science works and technology develops.

With an understanding of scientific evidence and risk, they're in a position to put appropriate pressure on politicians. If people have the confidence to engage with new technology, they can drive innovation from below.

What's more, this ethos must extend to government itself, because there is no policy area where science cannot make an important contribution.

We have an excellent new Chief Scientific Adviser in Professor John Beddington, the distinguished population biologist. And the great majority of government departments now have a scientific adviser in post - encouraging challenging input from external scientists, often through external advisory groups.

All of which brings me back to DIUS, which has overall responsibility for creating a society and a government that's excited by science, and recognises its importance in every sphere.

These are considerable ambitions that I've set out today. And I don't believe the UK could have attempted to innovate on this scale prior to the creation of DIUS. It is an indicator of a new determination to make knowledge and research the principle drivers of our economy and have a greater impact in shaping British society.

As we make progress against these objectives - and it is DIUS's responsibility to compile an annual innovation report measuring national performance - I hope people involved across the spectrum of science and innovation activity in the US will consider what my country can offer them - as researchers, as entrepreneurs, as policy makers.

Yet forging further links between our two countries is not simply about exploring profitable ventures and pursuing fundamental research together; it is the only way to make headway on those universal challenges which are testing mankind's ability to make common cause as never before.

Thank you for listening - and warm wishes to the AAAS in this, your 160th year.