Why Britain needs an innovation economy (and why learning new IP skills is vital)

by Andrew Watson on 19 March 2012

I picked this up from the UK’s Guardian online on Sunday. It is so powerfully accurate that I thought it was worth repeating word for word.

My only expansion point is to emphasise the vital importance of learning new IP skills along this journey. If we are going to make this journey as a country, and let’s face it, we don’t have much choice, we need to learn how to capture, protect and monetise IP in the new world economy. The UK is not good at this right now. We must get better.

This feels exciting for the UK. Alongside the Patent Box legislation that will be introduced this week, it feels as though the politicians are catching onto a key strategic plank to support a new UK PLC.

The article in full:

Something is stirring in the boardrooms of British industry. You heard it at Davos. Peter Mandelson is onto it, and last week Vince Cable joined in. The scale of the structural economic crisis facing the western democracies after the crash of the consumerist boom is driving radical new thinking.

As western governments confront the structural and debt crisis legacy of the credit-fuelled boom in the City, retail and housing, industrial policy is “in” again. But as the chancellor finalises his budget, the industrial policy business wants to see today is unrecognisable from the discredited corporatism of the 1970s. It’s an ambitious, modern, entrepreneurial vision of a “rebalanced innovation economy”, and – as Mandelson acknowledged – today’s industrial activism is being shaped by a new generation of Conservative ministers.

At this year’s party conference, it was George Osborne and David Willetts who announced a £50m investment to fund a world-class research hub to capitalise on our discovery of the new wonder material, graphene. In December the prime minister announced an ambitious strategy for life sciences. This is the most “hands-on” Conservative-led administration for 30 years, with a bold vision of an export and inward investment-led economic recovery, exploiting our knowledge base to build a more sustainable model of economic growth.

Not all Conservatives are comfortable with it. Coming to parliament after a 15-year career in technology venture capital, I strongly support it. It’s what modern business expects of a modern government. Unless we focus on the technologies and sectors of the British innovation and knowledge economy which can best compete in the new markets of the developing world, we will condemn Britain to further decline into an old and public-sector-dominated economy. We have to trade our way out.

We have world-class universities, a science and research base, and a globally competitive lead in key sectors like biopharmaceuticals, aerospace and the digital economy, but we won’t unlock their full value without a long-term strategy for skills, research, infrastructure, procurement and global sales. This isn’t about “picking winners”. It’s about picking the races on which to focus scarce resources, and the government doing what only it can do, but doing it better.

Take our medical life sciences. Last year the prime minister launched a new strategy setting out a comprehensive plan for a new “integrated healthcare economy” in which the NHS actively supports the UK as a global centre for biomedical research. Requiring little extra spending, it’s about government removing barriers, creating new incentives and unlocking the potential of the NHS to support UK health innovation. If properly implemented, it could help restore the UK’s historical role as an engine of medical innovation, meaning revolutionary new treatments for British patients on the NHS, paid for by export revenues from intellectual property and inward investment from industry.

Why don’t we do the same for some other key industries? Take UK agriculture, for example. It is a highly competitive sector with the potential to serve vast new markets for western crops and food around the world, generating billions in foreign earnings. Why don’t we sign a 10-year industrial collaboration with India to supply them with the plant science, seeds, training and food processing expertise we lead the world in?

Britain doesn’t just need governments that back business. We need more businesslike governments. I believe a modern industrial strategy must contain five essential elements:

■ We should focus on trading in the fastest emerging global markets. We must be prepared to use all the offices of state, trading on our historical ties, to develop new trade alliances and partnerships across the world.

■ We should identify technologies and sectors where we have a genuine competitive advantage and provide the platform investment in scientific research, skills and infrastructure to exploit it.

■ We need to develop our fertile innovation “clusters” where entrepreneurs create value – cities (Cambridge), corridors (M1 motorsports in Northamptonshire) and neighbourhoods (Tech City in east London). Infrastructure like smart rail and superfast broadband is key to linking clusters and driving innovation.

■ We need a radical renaissance of entrepreneurship. The goal? Let’s inspire our schoolchildren and make Britain the easiest place to start a business.

■ We need liberate our best public servants to win new revenues to support investment in tomorrow’s public services.

Our competitors are doing it. It is a curiously British delusion that other countries aren’t working every lever to promote their economies. There is a difference between protectionism and pro-active industrial activism. We mustn’t let out-of-date dogma or old party entrenchments hold us back from seizing the opportunity. The world has moved on. So must we.


George Freeman MP is a government adviser on life sciences


{ 1 comment… read it below or add one }

Nick White 03.19.12 at 1:57 pm

I’m trying to get excited Andrew. I’m trying real hard. Capability is vanity quality execution is sanity.

I don’t suppose for one minute that these politicians have a real clue about what is going on in the real world of science and technology business/ IP. This is so out of touch. It’s all great chest thumping stuff and then he mentions the £50 million on graphene. Too little 8 years too late! It does not take much research (UK IPO patent report on graphene) to see that we have badly missed the commercial boat on this one. It’s the same in other areas. The key element that is missing is that we have lost the ability to execute; we don’t have the commercial/ business acumen of old across the patch to make this “What we should be doing” happen. Too many good brains have gone to mush in the public sector over 30 years. I don’t think the politicians have even begun to grasp the scale and speed of our decline.

I posted something recently on PCT patent statistics to illustrate this point. I quote it in full here:

“It was with great pride and joy that I watched England’s conquering of France at the Stade de France at the weekend. Sadly, this joy was short lived as I turned to reading the annual WIPO figures over a glass or two after the match. We can probably agree that USA, Japan, Germany, South Korea and China are now in the Premier League of IP (at least by activity) and not worth trying to benchmark against, but what about the Conference League?

In that league we were nudging France, of similar size in terms of population and economy, in second place back in 2007. Since then PCT applications in France, already significantly higher than in the UK (about 18% more), have grown in every year since to a level that is 16.8% higher than the 2007 figure, whereas in the UK our PCT filings have fallen every year to a level almost 13% lower than in 2007. France now has 58% more PCT filings than UK! France also has 10 companies in the top 100 global PCT filers, the UK has none!”

This is nothing short of a national scandal. Another sobering fact; 29% of all UK priority patent applications are now drafted and filed by the inventor. A fact that is not that apparent in the UKIPO stats and “glowing” annual reports! We have an IP crisis in the UK and not even the UKIPO can see it. Who has the expertise or motivation to lobby UK Govt and stand up for IP in the UK?

So we can pat some politicians on the back for, very late in the day, spotting what we should be doing. Now the difficult bit; how do we do it and who is going to do it? Not easy when UK Plc knows diddley squat about IP and how to use it, when a recent survey indicated that less than 10% of UK SMEs plan to export more this year and when less than 20% of UK entrepreneurs (a tiny group anyway) are planning any increase in R&D spend this year. Oh and when there’s no money!

What’s the solution? Well after all my years in IP I have come to realise a very pertinent truth. There are some problems that have no solution.

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