Why I believe Lambert is out of touch with modern industry

June 4, 2004

The government is finalising its detailed response to Richard Lambert's review of business-university collaboration. But was the review sufficiently in touch with the changing nature of the UK economy, the significance of the service industry and businesses in, for example, music, fashion, media, advertising, software, art and design?

How valid were Lambert's strictures about poor UK investment in research and development? If R&D is not measured in business accounts, does that mean it does not exist? What is R&D in our knowledge businesses? Can it be measured in a structured way, or is it part of the process of interaction with customers?

Does Lambert's focus on traditional businesses, R&D protocols and technology transfer offices and officers suggest supply-side proposals for what is in essence a demand-side problem? Are they a reflection of his being too close to the Treasury and Department for Trade and Industry/Office for Science and Technology, where the creative industries and service sectors get just a footnote in the science and innovation white paper?

Reports for the Greater London Authority note that the creative industries sector is the third largest employer in London, the second biggest source of new jobs; it has added £21 billion annually to London's output and has grown much faster than other industries.

Recent SkillSet analysis noted that some 66 per cent of those employed in the UK audiovisual industry are graduates. Some 24 per cent have postgraduate awards. About 25 per cent hold a media studies degree (sceptics please note). In the three interactive media sectors of web design, CD-Rom production and computer games, about 81 per cent are graduates.

The government needs policies that are relevant to these and other growth businesses. Commentators must relate their remarks on graduate demand to today's and tomorrow's job markets. (Those who read Philip Brown and Anthony Hesketh's forthcoming book, The Mismanagement of Talent - which tells of a possible graduate glut - will want to see how far they cover graduate demand in the creative industries.) The service sector is no less important. Alan Hughes, director of the Centre for Business Research at Cambridge University, reports that the growth in US productivity in the late 1990s was accounted for by just six industries, of which by far the most important were the wholesale and retail sectors, and security and commodity broking; the semiconductor, computer and telecom industries had only a third of the growth by comparison.

If the growth in productivity is generated in industries that use technology, should they not be the focus of university-business relations? Community interactions with universities on problem-solving and social networking are also important in spreading knowledge, as our University Partnerships to Benchmark Enterprise Activities and Technologies (Upbeat) project with Salford and other universities is showing. Will funding decisions in the second round of higher education innovation reflect these perspectives or focus on technology supply? Next month's report from the Council for Industry and Higher Education on knowledge transfer will again question the value of simple metrics such as university spin-offs. We need a broader range of criteria.

Government policies have to reflect the needs of our businesses, micro-businesses and sole traders in order to drive and sustain high productivity and wealth creation. US competitive advantage arises from policies and financial support that help companies to grow and to exploit markets. In the UK, a demand-side focus is surely also needed with a range of experiments that are business and business-network driven.

Richard Brown
Chief executive
The Council for Industry and Higher Education

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