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Adiputera Tech Policy Speech - University of Warwick Science Park
Hello everyone, thank you for having me here today.
The University of Warwick Science Park is, I think, something of an inspiration. What the Science Park embodies - cooperation, innovation, an enterprise-friendly environment and fair playing field for companies, start-ups and scale-ups and tech firms of all stripes - is something that I think is essential to any business strategy, to any industrial strategy. And a key priority of the Department of Business, Energy and Climate Change, during my tenure here, has been creating a new pro-business, pro-innovation climate. And the sort of environment we see here is integral to that plan. We have had the most involved, concentrated, effective plan of any government in decades when it comes to supporting such clusters of innovation and enterprise.
Now, there's this curious technique in parliament - William Croft and Samantha Ryan are experts at it - to ask a question to a minister, receive an answer, and then complain that you didn't receive an answer. So while Samantha Ryan is running around saying that there is no plan, the truth is, she was told the plan straight away and it's actually been part of government policy - lifted mostly from the Lib Dem manifesto - since the first year in office.
I believe in an entrepreneurial economy. In many cases, that requires letting the free market do its thing - regulated, of course, but one of the goals of regulation being to keep the markets open and competitive, to prevent domination and restrictions from both the public and the private sector. That's one half of having an entrepreneurial economy. Space for innovation, enterprise, business growth and success. An understanding that taxes and regulation, while important tools and the price we pay for living in a civilised society, can be onerous, can be burdensome. Things like the profit motive, price signals, and property rights are very important.
The other half is an entrepreneurial economy needs an entrepreneurial state. Now, that doesn't mean nationalised industries. That doesn't mean state capitalism. But there are some things that entrepreneurship needs that market forces - as much good as they do in generating prosperity, choice and innovation - can't do on their own. The classic examples are law and order, roads, utilities, schooling. But that's only part of it. Patient capital, a willingness to lend to certain classes of high risk innovation, investment in basic research - these all require an entrepreneurial state.
So those are two things - simplified, of course - that an entrepreneurial state requires. And already, I think the government has delivered on them both. There is more to do, of course. There’s always more to do. But we have addressed several long term and chronic deficiencies in this area.
The Regulatory Reform Act is one achievement we are especially proud of. It creates a new culture of regulation in government - understanding that regulation is important, not just in protecting public health and safety but in ensuring free markets and high standards - but it’s an evidence-based culture of regulation, where we make sure regulatory requirements are clearly articulated, where we scrap duplicative or unworkable regulations through means of periodic review, where the consultation process is open and effective. That sort of flexible, evidence-driven regulatory culture is, I think, necessary in a 21st century economy.
We have set up the British Business Bank, which provides tailor-made advisory services and otherwise unavailable or prohibitive financial services for the small and medium enterprises that drive the innovation of the future. By providing £2 billion in seed capital and by giving the Bank the resources to raise its own funds and work with the private sector on mutually beneficial joint investments, the Bank provides equity investments, patient capital, loan guarantees, programmes to develop regional financial ecosystems and tech and innovation hubs across the UK. This is not about picking winners. It is about picking the willing. Giving businesses, who previously haven’t had access to the patient capital, countercyclical lending or strategic investments that the Business Bank provides, a chance to get going. Giving regions, who might not have mature local financial services in place or might not have the capital going to set up local tech hubs and business conglomerates, the support they need to provide that infrastructure.
We have invested, too, in other programmes to ensure that innovation and entrepreneurship can thrive in every corner of the UK - understanding that enabling every region to benefit from economic growth is an imperative for social justice, sustainable growth and truly unlocking this country’s innovation and enterprise potential. We have increased funding for the Regional Growth Fund. The Regional Growth Fund is focused on helping expand and diversify the economies in those communities that are overly dependent on the public sector, protecting jobs and enabling future growth. We have made investments - and will make more investments, including through a new Environmental Growth Fund - in helping communities overly dependent on fossil fuels and fossil fuel-based industries expand and diversify. We have increased investment in public transit and rural high-speed broadband, giving every community the links and the connections needed to compete in a globalised world.
We have increased research funding - in all areas, medical research, research councils, BECC research agencies. That means more grants given, more interdisciplinary studies approved, more studentships and scholarships awarded, decision panels given more leeway to invest in more risky or esoteric ventures. We have to do more. I don’t think any politician anywhere can truthfully stand up and say “oh, we’ve done all that needs to be done”, but I am committed to putting the UK government as one of the most proactive in supporting research, tech and development. We have maintained the research and development tax credits too, which coupled with small business tax cuts means the private sector also has more resources to invest and innovate.
The Industrial Strategy Challenge Fund - which has sought to build upon Britain’s advantages in order to tackle challenges such as climate change, by investing in innovation and the infrastructure to support that innovation - has already led to substantial increases in innovation. Areas such as industrial decarbonisation, green energy, reducing packaging waste, and the electric vehicle industry are the global growth markets that we are tapping into here, where we are helping address global challenges that call for ingenuity. Now, the Fund is also doing a lot of work in non-environmental sectors - including foundation industries like social care - but about half is tailor-focused on the environment. Most of the funds we initially appropriated for it have already been used. We’re looking into long-term options - like making it a permanent line item or following it up with a second wave of funding - but I am very pleased with how it’s gone.
So what next?
Implementing the Regulatory Reform Act is a key priority of the Department for Business, Energy and Climate Change. We’re trialling a programme of regulatory legal aid - where businesses, who fear the costs of paperwork attached to regulatory compliance, costs in terms of both time and money, can receive support in confronting those costs. Businesses can now designate a local authority as their primary authority - meaning they can now simplify the regulatory process by working with one rather than many councils. One Stop Shops - where businesses can receive guidance on their regulatory obligations - and Regulatory Flexibility Areas - where we focus on outputs rather than means - are being tried out. These are new ideas. Bold pro-business ideas that the Liberal Democrats put on the table, that the Liberal Democrats got passed.
And there is also the scale-up strategy that was in the Regulatory Reform Act. Scale-ups are just as important a part of the process of entrepreneurship and innovation as start-ups, but they have long been neglected by policy makers. No more. We have implemented a strategy, starting with data collection, but including comprehensive reports on issues such as financing gaps and issues with infrastructure and regulation. We’ll also be working on how to help scale-ups, on how to help scale-ups work with other businesses, universities, UK Trade and Investment. We’ll be establishing a new category of visa, a scale-up visa, helping these up-and-coming businesses gain access to the critical and often niche skills that they need. That sort of collaborative approach will lead to new and bigger tech hubs, and more opportunities for those that already exist. The University of Warwick Science Park will be one of those places that has a role at the forefront of the tech hub revolution.
Continuing to champion free trade and an open, outward-looking Britain, too, is essential to this message. We are arguing for freer trade policies within and beyond Europe, while the Lib Dems are also making the case, passionately, that staying within the EU is the best thing, by far, for our economic growth and the future opportunities of everyone within the UK. In one of my ministerial statements as Foreign Secretary, I laid out how this government is committed to free and fair trade as a tool for international development - I think the same applies for it being a tool for innovation and cooperation.
The British Business Bank, too, will continue to receive government support. We are committed to helping it grow, to maintaining its operational independence, while keeping it in public ownership to prevent conflicts of interest. We will be increasing the duties of the British Business Bank, too. We will be, as we give them increased resources, giving them increased remits and responsibilities, while still maintaining its operational independence in how it approaches those duties. Sectors, such as in the creative fields, that are integral to a 21st century economy, will receive new tailored support networks. And expanding our efforts to build up regional economies, to develop the Northern Powerhouse, the Midlands Engine, the economies of the devolved parliaments and assemblies, will continue to be a priority, both through the British Business Bank and through other methods. New regional investment vehicles, more support for apprenticeships and training, and continuing to deliver a level economic playing field will remain our priorities, too.
Britain has long lacked, I think, a coherent and effective industrial strategy. Changing that, promoting investment and innovation, decarbonisation and devolution, has been one of the central missions of this government’s economic policy. We have succeeded there. There is more to do, of course, but we have made great strides and great leaps and bounds here. The Liberal Democrats are committed, as always, to continuing to build a pro-innovation, pro-enterprise British economy. Thank you.
Graham Adiputera (Lib Dem - Sutton and Cheam)
Deputy Prime Minister
Liberal Democrat Leader
Secretary of State for Business, Energy and Climate Change
Secretary of State for Culture, Media and Technology
Parliamentary - 36
Media - 53
Policy - 48
Very good speech with some snipes at the Tories and the Greens. You'd do well to earmark things more clearly as Lib Dem innovations to win extra points.
Labour Party Adviser
Foreign Office and Ministry of Defence Moderator