Companies must make more use of the expertise in universities if the United Kingdom's economy is to become "knowledge driven", science minister Lord Sainsbury said last week, writes Kam Patel.
At a conference in London, Lord Sainsbury said the recent competitiveness white paper was a starting point for industry, academia and government to meet the challenges of the rise of the knowledge-driven economy.
He said the growing importance of knowledge demands ever more enterprise and innovation. This means "a new role for government as an investor, a catalyst and a regulator".
Stephen Byers, the trade and industry secretary, said the UK is strong in many areas of the knowledge economy, such as media, entertainment, financial services and pharmaceuticals. But overall, he said, the UK's performance is "still disappointing".
Explaining the rise and characteristics of the "weightless" economy, Danny Quah of the London School of Economics said that since at least 1900, 60-90 per cent of the growth in output per worker in advanced economies has been a result of technical progress. Wealth creation, he argued, has arisen not from accumulating traditional physical capital, but from finding better ways of maximising capital and labour.
Reading University's John Cantwell presented a study that revealed the Southeast dominating innovative activities, even relative to its large population and its economic weight.
The region accounts for about 50 per cent of national expenditure on industrial R&D and for 42 per cent of all R&D personnel employed in industry. This imbalance could further marginalise less well developed regions, Professor Cantwell said.
The conference was organised by the DTI and the Centre for Economic Policy Research.