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Emerging Technologies

Volume 281: debated on Wednesday 17 July 1996

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To ask the President of the Board of Trade what plans he has to increase the proportion of gross domestic product devoted to the research and development of emerging technologies in British industry. [36076]

My Department will continue to support innovation, including research and development, and to extol its benefits to British industry with the aim of encouraging investment in it. For this reason, we have conducted the foresight programme, and delivery programmes such as Link, the teaching company scheme, the crusade for biotechnology and the information society initiative, to encourage industry's investment in, and use of, new technologies.

In general, the level of research and development in this country is below that in many of our competitors, including Japan, Germany and the United States. Given the importance of the emerging technologies for the future of our country—particularly in areas such as the Thames valley, where I come from—does the Minister feel that the current level of research and development is disappointing? Does he feel that it is time that the Government did more to help encourage research and development?

Recently, the hon. Member for Newbury and I visited a company in his constituency that is at the forefront of technological development, thanks to the revolution that we have created in telecommunications. The Government are doing an enormous amount to stimulate British industry, and the best examples in this country can compare with any in the world.

As I said in the foreword to the recent "Research and Development Scoreboard", there is a long tail of laggards who are not putting enough into research and development. We are trying to get them closer to the science base in our universities and to stimulate them to increase their understanding that research and development and innovation will be crucial to their competitive edge as we go into the next century.

Does my hon. Friend agree that, while the "Research and Development Scoreboard" is useful as the best evidence that is available at present, it is deficient in measuring all the research and development that takes place within the United Kingdom and in providing the basis for effective comparison with other countries? Will he and his Department make efforts to find a way to refine this information so that effective and accurate comparisons can be drawn in the future?

My hon. Friend is absolutely right: this is a hugely complicated area on which to find figures. A lot of out-sourcing of research and development is sometimes not picked up in the figures, and some of the work that is done in our universities is more attributable to companies than to the universities, so it needs to be taken into account. However, overall, I am happy that there is enough relevance in the statistics to show that British industry needs to do more, which is why we have a series of delivery programmes geared to technology foresight, such as Link and the teaching company scheme—and wherever I go around the country I find that they have been successful. We want more participants from industry to come forward and take part.

Does the Minister agree that the United Kingdom is the only major industrial country to reduce the proportion of gross domestic product it invested in research and development between 1991 and 1993? Does he agree with the view expressed by a civil servant in his Department's innovation unit who said that we have been outgunned two to one by our international competitors? Have not the Government created a culture of underfunding and under-investment in the bedrock of our economy: research and development? Instead of passing the blame on to industry for under-investment, will the Minister accept and recognise the failings of the Government in this area?

The proportion of GDP that the United Kingdom has invested in research and development has held up against all the other G7 countries, except France, since the last recession. I am criticising industry where it needs to be criticised. The hon. Gentleman should pay tribute where tribute is due. The Government have introduced a large number of schemes in an attempt to stimulate further interest in research and development.

The Department of Trade and Industry's work in this area is shown by its commitment to a cash-flat budget over the next few years, despite pressures elsewhere in government on budgetary constraints. Last weekend, I spoke with the German Minister—I know the difficulty that he has protecting his budget. He thinks that we are doing rather well, as do the inward investors coming into this country who are contributing to research and development. There is no doubt that the picture here is a good deal brighter than the hon. Gentleman is prepared to admit. By paying tribute to the British companies that are doing well, we may stimulate the others to do better.

Does my hon. Friend agree that, if we are to encourage private industry to invest more in research and development into emerging technologies, we must ensure that we do not heap extra bureaucracy on them, that we deregulate as much as possible and that we do not heap on them the social chapter, the minimum wage and the various other policies that new Labour would introduce? They would be new dangers to companies that are looking to invest more in research and development.

My hon. Friend puts his finger neatly on a key point. The Labour party is keen to introduce regulations, but the economic sectors that are necessary to the country's prosperity are fast-moving, high technology sectors, such as biotechnology, which need a stable regulatory environment and minimum Government intervention. We should not pile upon them social costs that are not necessary to their performance. The atmosphere that we have created in industry—particularly in high technology—through liberalisation has proved an enormous success and a benefit to this country. We want to keep it that way—and to keep the Opposition's hands off it.