Push for high-tech growth will bring industrial policy back into vogue

Governments do not have the knowledge to back particular technologies and have made a mess of such policies in the past, according the UK Universities and Science Minister David Willetts in a speech last week.

But none the less, the UK government is intending to have another go at “picking winners” as part of its strategy of re-shaping the country’s science and research base as a spur to high-tech growth.

There’s a reason for wading in again where past governments have failed, and that’s because generic growth policies, rather than vertical ones which focus on particular sectors and technologies, “Only take you so far,” Willetts said.

And in any case Willetts noted, “Governments find themselves making decisions about allocation of resources and we should not pretend we do not.”

In what seemed the most significant dog whistle to those who want more government support for strategic sectors, Willetts even went so far as to say, “Times have persuaded many of us to back certain industries.”

So which high tech sectors does the UK government think will generate growth and provide help in the mission of rebalancing the economy away from its dependence on financial services? “Nobody can know for certain,” Willetts said, adding, “But that does not mean we do not have the faintest idea.”

A lot of growth will come from established, high-performing sectors as they continue to innovate and improve productivity. But in addition, “We can discern already some of the scientific discoveries and technologies that will shape our future,” Willetts said.

A case in point is synthetic biology, where the government is to form a ‘leadership council’ consisting of academics and industrialists. The council’s task will be to deliver on a road map being drawn up currently, which will set out how the UK can create a world-leading synthetic biology industry.

Another example is nanotechnology, where Willetts has convened the key players to sketch out its future relevance to the UK across a range of technologies and a range of markets. Willetts said it is clear that grapheme is one very significant example of a key nanotechnology, and the government will set up a Graphene Global Research and Technology Hub to provide specialist facilities and expertise as industry works to develop commercial applications of this material.

There will also be a specialist ‘Catapult’ centre focussing on industrial applications of space technologies. This joins three other recently announced Catapult centres (these are modelled on Germany’s Fraunhofer Institutes), specialising in advanced manufacturing, regenerative medicine and offshore renewable energy.

Overall, Willetts said, the UK government has identified 53 specific technologies and innovations that will underpin growth in the future. “If we are to live up to our ambitions, we need coherent programmes for investing in these broad areas of research,” he said.

So does Willetts’ speech herald a more activist industrial policy from the UK government? Well, there’s no new money being announced. But it’s more than a shift in tone and emphasis, especially for Willetts’ own Conservative party, which when it was last in power in the 1980s and 1990s had a very hands-off approach. Now, faced with the depth of recession the government knows it needs to pick winners.

Chris Calland is an Account Director at the PR and lobbying consultancy PLMR Ltd in London