Britain has an enviable record of scientific achievement and invention. No other country has a list of firsts like ours. As scientists and inventors the British are still amongst the best.
But our very success in this area leads, and has led, to a major difficulty. The British domestic economy is too small to enable us to develop all the inventions we make or the new products we bring to the market. Too often we fail to develop our own inventions or to follow up our initial success in devising novel products or processes.
I should like to explore today some of the reasons for our comparative failure in innovation and some of the steps we are taking to try to improve on our past record. [end p1]
Development involves the leaders of our firms and industries, small as well as large, in choosing, not between the bad and the good (anyone can do that) but between the good and the better. This is a difficult, often heart-breaking, task because what is at issue are judgments of markets or marketability—not technology—and they can lead to technically promising ventures being cut off in what appears to their champion to be their prime. But we cannot afford any more engineering triumphs which are commercial or market failures. There is little point in having a good invention or in making a key scientific discovery if we don't use it to improve our competitiveness in world markets and thus create wealth in Britain. [end p2]
It is not, of course, a new topic—indeed it is one that has been discussed for a good hundred years in Britain. The attitudes and aspects of our society which lead us to be less effective innovators than we are inventors, underlie much of our present industrial difficulties and distress.
Advisers keep telling me what they think these aspects and attitudes are but alas very few of them have actually invented anything themselves. So a month ago I decided to ask a group of inventors, some successful, some less successful and some frankly struggling, to discuss with me and some of my colleagues and some representatives of the financial institutions—the banks, insurance companies, pension funds and so on—the difficulties that they thought Government could help to solve. [end p3]
What did I learn? Well first, attitudes in some quarters really do have to change. Those in charge of investment funds must become more sympathetic towards the technical man trying to develop his idea and found his own business. A beginning has I know been made. The Stock Exchange has set up the unlisted securities market; the Prudential Assurance Company and the Pat Centre Cambridge have set up Prutech; the Banks have set up their small firms divisions and venture capital divisions; but—as one of my guests said rather bluntly after one of the bankers had been regaling us with a list of this kind— “that's all very well but the news hasn't reached Cornwall yet” . [end p4]
The manager of every branch of every bank, and every investment manager of every pension fund must know what to do if another Barnes Wallis or another Frank Whittle walks through his door, whether it is in Cornwall or Savoy Place.
We have a long way to go before we will be giving proper recognition to our inventors. Of course scientific excellence is admirable, but so is engineering competence and technological capability. So is founding a new successful business and creating a lot of wealth.
But most to be admired are those rare, gifted persons who can do all of this. The supercilious attitude that some sections of our society had towards our engineers and entrepreneurs was always a ridiculous affectation now it is positively dangerous. [end p5] It underlies, I think, many of the specific difficulties our innovators face. We must return to a Society in which the Hintons and Cockerells will be honoured and feted just as, in the nineteenth century, the Brunels and Stevensons were.
The only long term solutions to the distressing level of unemployment which this country now faces are more products and more business. We need more firms of every kind: some will result from larger organisations adapting themselves to an increasingly competitive world; some will be small firms providing new services, or old services in a new way; and, above all, some will be new technology-based firms.
American experience has been that as many as three-quarters of the net new jobs created there in the past twenty years were created by companies with fewer than fifty employees and the jobs in the new technology based small companies have been the most secure and the most rewarding. [end p6]
There still seems to be a belief that new technologies can only be introduced at the expense of employment opportunities. I find this extraordinary. It has not been true in the past. The belief stems, I think, from two misunderstandings.
The first is that because we cannot specify the new jobs they won't be there. The second is that some people think we can get through our working lives without changing what we do.
It is all too easy today to look at a piece of machinery with an electro-mechanical control device and to concentrate on what would happen to jobs if that were replaced by a microchip. [end p7] But what you should really be looking at is the opportunities that the new product would bring.
Take a telephone, a computer and a television. Add an innovator and he produces PRESTEL. How many jobs will be generated by the new services that will spring up from PRESTEL and similar devices? I cannot tell you precisely, but they could well be measured in tens of thousands in a decade's time.
That the new technologies will create new jobs, millions of new jobs, there is no doubt. What I am doubtful about is whether we in the United Kingdom will have our proper share. We should. We have the skills and the inventiveness. [end p8]
The Government's job is to do all that it can to make the necessary changes easier to bring about. We have already done a great deal. I have recently appointed Kenneth Baker as Minister for Information Technology. Apart from his other responsibilities in that field, I have asked him to ensure that the Government's initiative on public purchasing helps enterprising new firms to develop exportable products in the best possible way. [end p9]
We are also providing some money to firms under a Department of Industry scheme for the development of new processes and products. So far, £47 million has been allotted, and that has stimulated a further £200 million expenditure by the companies concerned.
Amongst my inventor guests last month were some who had been successful in obtaining Government support but—as one of them put it rather ruefully—he had found that he had to get financial contributions from no less than five separate Government Departments. Each of them required the same case to be put on different forms, satisfying different criteria and followed by separate investigations and decisions which were then all contingent on the success of every one of the other applications. [end p10]
He had persevered—and he had a good idea—so he was successful, but I wonder how many people with cases which are almost as good give up when faced by this bureaucratic fog. In Government, there is still relatively little understanding of what is really involved in “business risk” and of the importance of this concept to “the United Kingdom Limited” .
We must put this right. We must develop in those in Government service respect for the risk-taking businessman so that I hear fewer complaints about cumbersome procedures, masses of paper and a lack of urgency when firms try to obtain development planning permission, try to register a company or seek help with a research and development project. [end p11]
Of course the Government bureaucracy is not the only bureaucracy and Central Government is not the only public purchaser. Local Government and other public corporations are just as significant as Central Government. We need to make sure that they too are doing all that they can to encourage innovation.
Let me give you one example. You will know that the Telecommunications Bill going through the House redefines the nature and extent of the old Post Office monopoly. This will mean that the telecommunications network of British Telecom will provide a totally new market for new services and attachments. I hope the opportunities that we and British Telecom are providing in this way will be seized by UK manufacturers and that the innovative services and products will come forward [end p12]
I am also bound to say that I wonder whether we are making good and effective use of the engineering and scientific talent in our universities and polytechnics. I know that some of them are well organised to help inventive firms. Some have set up Science Parks like the one I visited recently in Cambridge. Others are co-operating with industry in enterprises like the Wolfson Institutes. All of this is to be welcomed and encouraged by industry as well as government. [end p13]
There is everything to be said for the involvement of university and polytechnic staff in business and commerce. To help this along, the Government intends to establish a new Award, with cash attached in some cases, designed to give recognition to successful partnerships between universities or polytechnics and industrial firms. We hope this will encourage those who have yet to set up suitable means for co-operation with industry to do so.
Everything that I have said so far has been addressed to the problem of the successful application of our research efforts. Our future—and the future prospects for science too—will depend above all on our economic well-being and we must ease the path for the innovators and the wealth creators in our society. [end p14] The Government will play its part, and I know that this Committee and all its constituent organisations will do so too. There is much to be done if British industry is to gain the benefits which can be achieved from the discoveries and inventions of British scientists and engineers.
But I also want to see our excellent fundamental research, for which the universities of this country have long been justly famous, flourish. No matter how difficult the universities find their adjustment to the straitened circumstances of the 1980s they must remember that one of their prime roles is to preserve the national capability for fundamental research across all of the major disciplines. That is why we have kept up spending on the Science Vote, which supports research through the Research Councils and the universities. [end p15]
We have a great deal to be proud about in our record of scientific achievement, and we should not be too gloomy about our prospects. I have been delighted to be able to visit laboratories from time to time in the last two years. You can be sure that I shall maintain my own interest in the course of fundamental science in Britain—although I can't promise that my visit to a laboratory will be followed every time by the award of a Nobel Prize, as happened in Cambridge last year.
Like everyone here, I take delight in talking to those who are working at the scientific frontiers. I am reminded of what the American physicist Richard Feynman wrote a year or two ago. He said: [end p16]
“We are very lucky to live in an age in which we are still making discoveries. It is like the discovery of America—you only discover it once. The age in which we live is the age in which we are discovering the fundamental laws of nature, and that day will never come again.
In this age people are experiencing a delight, the tremendous delight that you get when you guess how nature will work in a new situation never seen before.
What is it about nature that lets this happen, that it is possible to guess from one part what the rest is going to do? That is an unscientific question: I do not know how to answer it, and therefore I am going to give an unscientific answer. [end p17] I think it is because nature has a simplicity and therefore a great beauty.”
Mr Chairman, all of us here understand and respect that quality of inspiration; the task which faces us is to harness and apply those discoveries so that the quest can continue.