FST JOURNAL
Innovation Strategy
DOI: https://www.doi.org/10.53289/NUJZ4232
Improving our record on innovation
Kwasi Kwarteng
The Rt Hon Kwasi Kwarteng MP is Secretary of State at the Department of Business, Energy and Industrial Strategy (BEIS). He was previously Minister of State at the Department. He was Parliamentary Under Secretary of State in the Department for Exiting the European Union from November 2018 to July 2019. He was elected the Conservative MP for Spelthorne in 2010. In 2015 Kwasi Kwarteng was appointed as Parliamentary Private Secretary to the Leader of the House of Lords, and in 2017 he became Parliamentary Private Secretary to the Chancellor of the Exchequer.
The UK’s new Innovation Strategy addresses five fundamental questions:
- What is innovation?
- Why is it desirable?
- How do we promote it?
- Which areas should we focus our efforts on?
- Finally, what is its role in the UK economy in the medium term, in 2035?
The document does not give a final answer to these. These questions are really a starting point, through which to stimulate debate. They are designed to elicit reactions that can improve our efforts.
Both at home and internationally, the Strategy is generating a great deal of interest. It is a very outward-facing document which has been well received in many other countries, including existing and potential partners.
The UK has a huge depth of talent within the science base in terms of academic research. In terms of innovation, though, while we do well, we could do a lot better. Now, I’m an historian. The simplest way I imagine the difference between science and innovation is to recall, first, Isaac Newton in Lincolnshire watching apples fall and coming up with his theory of gravity: that is pure science. The innovation equivalent would be the Wright brothers inventing the aeroplane. We worked out what gravity was in 1665 and we figured out a mechanical way to overcome it in 1903. So that is, in my mind, a very simple example of the difference between science and innovation.
This innovation strategy sets up ‘tramlines’ to guide the way we drive innovation. As an example, as far as my Department is concerned, innovation is closely connected with net zero in terms of the challenge of decarbonisation, which is one of the seven target areas we outline.
An innovation forum
We will shortly establish a Business Innovation Forum to galvanise action from the business community in order to drive forward the implementation of the Strategy – and also to hold the Government to account.
What does this all mean for Britain in the next 10 years? If we get this right, we can really lead the world. The brains, the talent, the ingenuity and the commercial ability of people in this country can help us lead the way, not only in terms of driving net zero but also in improving general living standards – not just in the UK but across the world.
An agreement between UK Export Finance and the Offshore Renewable Energy Catapult aims to promote the expertise of UK offshore wind companies abroad - such as in the ORE Catapult and Vattenfall collaboration of the coast of Aberdeen.If the UK is to maximise those opportunities, then people have to have the right skills. Each new Secretary of State needs to focus on the skills agenda, not just for innovation but also for net zero and the other challenges our world faces. Unfortunately, over successive governments, responsibility for skills has moved between BIS, BEIS and the Department for Education. What we need is a fully joined-up approach – and I am confident we can then resolve this issue.
In addition to Innovate UK, we also have the new Advanced Research and Invention Agency (ARIA) which will play a major part in delivering the strategy. Given the way it has been set up, it would be wrong then to impose a specific mission. The director and project managers of the agency have significant latitude in regard to where they direct their attention. Having said that, they will understand that net zero is a big factor in what we want to achieve.
And it is not just a matter of coming up with the innovations themselves. Often these fail to make an impact because they are not adopted; at least not widely enough. So in certain areas we need to think about improving market function. Even if people produce fantastic innovations, they will not succeed if these are not picked up by the market – and that includes a focus on distribution chains and all the elements that go into successful sales and marketing.
Procurement is another important area and the Government has appointed a Minister for Investment, one of whose priorities is to focus on Government procurement. Looking at the United States since World War Two, the purchasing power of the US government has had a huge influence in all kinds of innovations. That is something that the UK could be much better at.
I think we need greater diversity in our institutions. The UK is very good at universities, and then there are businesses, but traditionally there has been very little else. More recently, the catapults and other bodies like the Francis Crick Institute have come into being and these attract capital from the public sector and also the private sector. So at the Crick Institute, AstraZeneca has an office next to researchers: there is greater permeability and interaction. That is critically important.
To take another example, ARIA is neither a university nor a business, but it will attract a lot of people with ideas. So, as I said, we need a greater diversity of institutions.
Funding
The Government has made an explicit commitment to £22 billion of R&D funding by 2024-25. That is a very clear statement. There is a sense among the public that Britain does science rather well. People saw that in the development of the Covid-19 vaccine and its rollout, for example.
Public acceptance of the need for a large role for science is, therefore, less challenging than actually finding the money. We have a great science base that can be used to develop ideas. We have a general population that understands there is a strong scientific tradition. Our job in Government is to make sure that we get it properly funded, although this may be challenging in present circumstances. The Government also has a responsibility to remain mindful of the UK’s balance sheet, the public finances.