Innovative Technology (Hansard, 19 June 1996)

§ 7. Mr. Flynn
To ask the President of the Board of Trade what new proposals he has to improve innovative technology in industry. [32114]

§ The Minister for Science and Technology (Mr. Ian Taylor)
The information society initiative, the crusade for biotechnology and the LINK programme are key departmental initiatives. Business links is appointing innovation and technology counsellors.

§ Mr. Flynn
Is not a principal reason why Britain has slumped from 13th to 18th in the world prosperity league table the fact that the average British company spends twice as much on dividends as it spends on research and development, while the top 200 companies spend three times as much on research as they spend on dividends? As the tiny country of Taiwan registers more patents than Britain and a single Japanese company registers more patents than all of British industry, are we not doomed to slump even further in the world prosperity league as we become a nation of branch factories for innovative, successful Pacific rim companies?

§ Mr. Taylor
The Government's policies have encouraged greater business expenditure on research and development in the past few years. However, I do not disguise the fact that I would like to see even more investment in that area. I am concerned about the level of investment in research and development among British companies, which do not compare well—I exempt the pharmaceutical industry, of course—with world-class companies. The hon. Gentleman should remember that a patent alone is not a guarantee of success: it is the exploitation of ideas that is important. There is a considerable movement in British industry and in the science base to try to ensure that we exploit ideas that are generated in both industrial and university laboratories.

§ Mr. Fabricant
In contrast with the negative comments of the hon. Member for Newport, West (Mr. Flynn), is it not a fact that the crusade for biotechnology has encouraged major British firms to experiment and to develop products in that area? Is not the largest pharmaceutical company in the world a British company and based in the United Kingdom?

§ Mr. Taylor
My hon. Friend is right. The crusade for biotechnology, which was launched by my right hon. Friend the President of the Board of Trade and me yesterday, is a remarkable effort across Government Departments to highlight the importance of that sector to the United Kingdom. There are several measures which show our determination to support new British companies that are emerging in the biotechnology area, to support the science base, and to encourage the spin-out of ideas and the protection of intellectual property. The move was warmly welcomed by a number of leading biotechnologists from large and small companies and also by leading academics.

§ Mrs. Anne Campbell
If we exclude the pharmaceutical and chemical industries, does the Minister agree that there has been an 11 per cent. fall in manufacturing investment in research and development since 1986? Is he considering the request from the Select Committee on Science and Technology that the Government review fiscal incentives for research and development so as to improve our appalling performance?

§ Mr. Taylor
Fiscal incentives as such are a matter for the Treasury. We always keep under review what is occurring in other countries. The most interesting point about the fiscal base in this country is that it is often cited as a factor by companies wishing to invest here. I welcome the increasing number of research and development projects that are coming to this country as a result of the Government's overall economic management. That is a key factor and, allied to our excellent science base, I am sure that the hon. Lady will join me in welcoming the increase in research and development which is often encouraged by overseas investors in this country.