BQF Innovation Blog » science

Three things the Government can do to boost Innovation

Paul Sloane — Tue, 08 Jun 2010 11:37:54 +0000

I was recently asked in an interview what advice I would give to an incoming government on how to increase innovation in our economy. Here is what I would recommend:

1. Make it as easy as possible to start a new business. Most radical innovations come from start-ups and we need a lot more of them. It is already reasonably easy to start a new business in the UK. However, we could further reduce administration and tax on new businesses e.g. no corporation tax for the first two years trading.

2. Increase the availability of loans for small and medium sized businesses (SMEs). At the moment many smaller enterprises cannot raise the finance they need to expand. We need to encourage venture capital funds, business angels and banks to invest in or lend to start-ups and smaller enterprises. This is risky so the government can help lay-off some of the risk.

3. Tilt higher education towards Science. Somehow our country has lost faith in Science. The media is cynical about Science in general. It is no longer seen as something that can solve problems and make life better. We need to rediscover the belief in Science and Engineering displayed by the Victorians. Many valuable high-tech start-ups come out of PhD studies or University research departments. We should encourage more bright students to take degrees and further degrees in Science based subjects. We should say that a degree in Physics is more valuable than a degree in History. One way to tilt the playing field would be to make tuition fees lower in science and engineering courses and higher in arts subjects.

We need more innovation in all parts of the economy including large corporations and the public sector. However, I would start with the SME sector. These three proposals would cost little but over a period they would encourage more start-up businesses and more high-tech businesses. This will help fuel innovation.

Paul Sloane

How a Botanist helped in the design of your computer and TV

Paul Sloane — Mon, 17 May 2010 09:28:05 +0000

Liquid crystals represent a state of matter which exists between solid and liquid states. They were first discovered in 1888 by Austrian botanist Friedrich Reinitzer who was studying cholesterol at the Charles University in Prague. Reinitzer described three important features of cholesteric liquid crystals; the existence of two melting points, the reflection of polarized light and the ability to rotate the polarization direction of light. These discoveries remained of academic interest only until they were put to practical use some 80 years later when teams at RCA Labs and Kent State independently created early liquid crystal displays by manipulating the crystals with electrical charges. The displays first appeared in digital clocks and watches, but in 1984 LCD resolution improved to the point where it could display images instead of mere text, allowing computer makers to create lightweight laptops and free PC users from their desks.

There are two instructive lessons in discovery and innovation here. The first it that it often takes a long time between the initial discovery of a principle and its application in a product. The second is that a botanist discovered something that was eventually developed into a product by physicists and engineers. It is at the intersection of the sciences that some of the greatest innovations happen.

Paul Sloane

Don’t cut Innovation

Paul Sloane — Wed, 03 Feb 2010 18:09:16 +0000

Alistair Darling (photo by the Sun)

In December the Chancellor of the Exchequer, Alistair Darling, announced that he would make cuts of £600m in funding for higher education, research and science by 2012. Shortly afterwards the Science and Technology Facilities council announced a range of cuts in experimental programmes. The number of students funded to take PhD degrees is expected to fall by 25%. It is remarkable that these announcements have not generated national concern because they strike at our national ability to innovate. On Dec 16^th over 100 leading scientists and academics published a letter criticising the cuts and pointing out that research is essential to scientific discovery and innovation.

Currently interest for postgraduate education is very high but funding is being slashed. At a national level it is recognised that our dependence on financial services should be reduced. A good way to do this is to encourage the growth of high-tech start-ups. There is considerable evidence from the OECD among others that people educated to doctoral level are ‘key players in innovation.’ We clearly need to cut public spending in order to rein in our enormous debts but even so the country needs to increase not reduce spending on science, research and postgraduate studies as these are shown to fuel the technology start-ups that will give us future economic growth and employment.

Paul Sloane

What the Government can do to boost innovation.

Paul Sloane — Mon, 03 Nov 2008 09:51:22 +0000

In this article in Businessweek Sami Mahroum says that ‘during economic downturns, innovation is the single most important condition for transforming the crisis into an opportunity’. He argues for active government intervention to boost innovation. ‘In the short term, governments need to provide support to small companies to help them manage the crisis and continue to develop their portfolios of products and services. The British Innovation Advisory Services model, where government-supported consultants are paid for and loaned to companies, is one example of the type of thing that governments can do. Another is the Dutch voucher system, under which the government gives vouchers to small companies, allowing them to source the expertise (mostly consultants) they need from public research institutes. Some 80% of such voucher-supported projects otherwise would not have been undertaken. This type of support is critical to help many small, successful companies get through the crisis.’

‘For the long term, governments should do four things so their countries can emerge from this crisis as winners:

Inject capital. Inject new funds to fill the gap in any serious downfall in private investment in strategic science and technology (S&T) areas such as nanotechnology, alternative energy, health and life sciences. This is what the South Korean government did when the country was hit by a major economic crisis in the late 1990s. Two years later spending on R&D exceeded pre-crisis levels, and Korean businesses did not have to play catch-up when the economy bounced back.

Think Global. Encourage leverage of international investments in S&T programmes from nations and regions that have the cash such as China, the Gulf, and Japan. The Japanese are looking to expand globally, the Chinese are hungry for knowledge transfer, and more recently, small, rich Gulf countries have allocated billions of dollars to spend on science, technology, and learning programs. Expensive long-term S&T programs can become new platforms for multilateral collaboration.

Focus on Public Programs. Maintain and expand levels of funding for public S&T programs. This should help keep a country’s knowledge base expanding. When Finland was hit by a massive economic crisis in 1990, after the collapse of its main trade partner, the Soviet Union, its government’s expenditure on R&D and education in all sectors increased. Ten years later, Finland emerged as one of the most competitive and innovative countries in the world. In Sweden, a major economic crisis in the early and mid-1990s saw the number of people engaged in R&D activities increase by about 20%. Swedish businesses emerged from the crisis with global leadership in sectors such as telecom and machinery.

Support Talent. Governments should create big seed capital funds to support the newly created army of potential entrepreneurs composed of highly skilled people made recently redundant in specific sectors.’

There is a real danger that in this recession we will see governments borrow money on a large scale and spend it on consumption rather than invest in infrastructure and innovation. Mahroum’s views are a useful input to the debate.

Paul Sloane