Investing in science and technology will help in the fight to level up Britain
Boris Johnson bumps elbows with scientists as he visits the construction site of the new vaccines Manufacturing and Innovation Centre, Didcot, September 2020 | PA Images
We must encourage the take-up of cutting edge technologies in companies across all regions to bridge the nation’s productivity gap
The UK will not achieve its full potential unless and until every part of the country is firing on all cylinders. That was the assessment of the Industrial Strategy white paper published in 2017. The term “levelling up” has been used more recently to describe this ambition and agenda for the country.
The biggest symptom of this unlevel performance is the productivity differences between parts of the UK. As the economist Paul Krugman said: “Productivity isn’t everything but, in the long run, it is almost everything.” That’s because productivity is earning power – the more productive we are, the more we can earn and the better off we are.
In Britain we have some of the most productive businesses, people, and places on earth. But we also have a long tail of underperformance where productivity is a world away from the best. Applying science and technology is one of the prime ways we can close the gap between the leading edge and the rest – in other words, to level up.
Much of the disparity derives from the low take-up of technologies that are practised in the most advanced companies, but have not been adopted with widespread consistency beyond.
To that extent, our national productivity challenge is one of composition. If we can bring all parts of the country up to the level of deployment of advanced technology achieved by the leading edge, every place – and therefore the nation – can do better.
It is important to remember that, from steam power to digital, most gains came from the widespread deployment of technologies – the faster and more widespread the better. This requires measures to better diffuse the technologies that are currently available.
In manufacturing, for instance, leading OEMs (original equipment manufacturers) can work with smaller businesses in their supply chain to help them upgrade the level of technology they deploy.
If we are not only to level up but advance as a country, there are two challenges. The first is that many other countries have recognised, as we did, that scientific and technological excellence is likely to be a precondition for world-leading economic performance in the decades ahead.
For all of our reputation as a scientific powerhouse we have been investing less in research and development (R&D) than most of our competitors – most recently 1.7% of GDP, compared to an OECD average of 2.4%, 2.8% in the US, 4.2% Israel and 4.5% in South Korea.
The Industrial Strategy white paper set a goal to achieve 2.4% of GDP invested in R&D by 2027 and 3% thereafter. The government has confirmed its commitment to this 2.4% target – though not yet the 3% – and has announced a doubling of the R&D budget: a huge step towards securing our competitive position.
The accompanying challenge is to do better in ensuring the fruits of that research are captured in Britain. Our national record has been one of excellence in discovery, but a relative failure to translate those discoveries into manufacturing advantage. The lithium ion battery was discovered in Oxford, but until recently we had built no national capacity in battery manufacturing.
The commitment to bridge the gap between discovery and manufacturing was an important part of the white paper which established, for example, the Vaccines Manufacturing Innovation Centre – already playing a leading part in our strategy for responding to Covid.
It is vital that as we advance innovation in science and engineering, we ensure the benefits are felt in jobs and earning power across the country. The national profile of science and technology has soared during the Covid pandemic. My prediction is that as we move beyond Covid and deliver an agenda of more even, but continually advancing, prosperity and opportunity across the whole country, science and technology will continue to occupy this place at the forefront of our efforts.
Greg Clark is Conservative MP for Tunbridge Wells, and chair of the Science and Technology Select Committee