Glad tidings for the scientific entrepreneur

The white paper on competitiveness will nurture new links between business and science, says Peter Mandelson.

Science and technology are the bedrock on which British industry must build for a competitive future. Commercial success in the global marketplace will depend more than ever on innovation, entrepreneurship and the use of knowledge. This government's role is to create an environment that will help to create a knowledge-driven economy in this country.

We are blessed with an excellent science and engineering base in the United Kingdom. We are bristling with ideas and innovations. We win more science and engineering prizes than any other nation, bar the Americans. But we are hampered by two problems.

First, our predecessors failed to provide the support that science and engineering so badly need and deserve, to the extent that many of the buildings, laboratories and testing grounds where cutting-edge research takes place are now crumbling.

Second, we are wasting our innovative potential. We need to build a culture of enterprise in which business and scientists can feed off each others' expertise. That culture does not exist in this country like it does in, say, the United States. You can see it over there in high-tech industrial clusters, such as Silicon Valley in California. Concentrations of related high-tech industries have grown up together in these environments. They have prospered by using the university knowledge base and sharing infrastructure.

The government has already shown it is determined to tackle these two issues.

It is committed to spending Pounds 8 billion over the next three years on science and engineering, which represents a Pounds 1.4 billion increase on previous figures. This money will be used to build first-class facilities, to buy state-of-the-art equipment and to carry out pioneering research under a programme run through the research councils.

Most importantly, the government will promote the necessary culture change. British businesses must realise that research and development are the key to future success. In recent years, most sectors of the UK economy have fallen behind their international competitors in that respect.

In my competitiveness white paper, Our Competitive Future: Building the Knowledge-driven Economy, I explain how we intend to sustain UK excellence in research, to improve training in the science and engineering base and to promote the exploitation of knowledge.

The University Challenge Fund, for example, enables universities to access seed funds to support research projects and develop the outcomes in commercially viable directions. We will complement that by creating a Pounds 25 million Science Enterprise Challenge, the aim of which is to teach business skills to bright young innovators who wish to access the global marketplace with their products. Under this scheme, we plan to create up to eight centres of world excellence.

The continuing Foresight programme also has its focus set firmly on stimulating the competitiveness of UK industry and forging the science-business partnership. A recent series of Foresight Link awards gave business development grants to a range of pioneering projects, from internet-based data to improve farming practices to funds for developing new and enhanced sports products. One inventor, for instance, received a grant to develop a three-dimensional body-measurements system for use in e-commerce.

The stream of initiatives to stimulate links between commerce and the science base will continue in a carefully co-ordinated programme, financed by a Pounds 220 million increase in my department's innovation budget.

As part of that we are creating a reach-out fund to help English, Scottish and Welsh universities work more effectively with business. Also in the pipeline is a series of Faraday partnerships, under which each of the research councils will bring together up to 40 innovating small businesses with scientists to share ideas and commercialise research.

Over the next year we will also take a look at the research councils to see what they are doing to realise the commercial potential of their research programmes.

We have some of the finest scientific minds in the world and we owe it to them to provide the facilities they need. What we need is for business to sit up, take notice and get involved. Scientific entrepreneurs provide the spark that can set the economy alight. Government will do everything it can to encourage a culture of enterprise and ambition.

Peter Mandelson is secretary of state for trade and industry.