Science and Innovation Strategy

Lord Mendelsohn Excerpts

Monday 23rd October 2017 Lords Chamber

[Lord Mendelsohn (Lab)]

First, I point to my entry in the register of interests and to the fact that our family office is an investor in UK science and research. I thank the noble Lord, Lord Patel, for securing this debate and for introducing it so well. I also congratulate him on his appointment as the chair of the highly regarded Science and Technology Committee. I have been a huge admirer of his clinical and academic achievements; he is an outstanding figure in this House. I wish him well in that post and wish the committee continued success.

In that vein, I place on record our gratitude to the noble Earl, Lord Selborne, for his excellent stewardship of the committee over the last 11 years. Its reports have never failed to inspire and interest this House. I also thank all noble Lords for their contributions to this debate, which have been absolutely outstanding and quite expert. It shows the importance that Members of the House place on these challenges. There was one point in the speech of the noble Lord, Lord Patel, which I hope the Minister will respond to at the end, about when the Government will respond to the submission of Sir John Bell’s Life Sciences report. It is important for us to get an early indication of that. It is an excellent report that requires a very early response.

We have been through a lot of material about the strength of our research community. Our research base is a global force and our universities produce research of a quality that far exceeds that of our competitors with similar resources and population size. Our public scientific research employs some 100,000 researchers and has a turnover of £8 billion. Private scientific research employs another 150,000. We know the quality; we know the size. But, as the industrial strategy identifies, our problem has been innovation—how we take that tremendous base and move it on. As the noble Lord, Lord Patel, put it wonderfully: we have turned money into ideas but how do we turn ideas into money?

The industrial strategy, in particular its section on this area, is excellent and a very important step forward. I congratulate the Government on it, but it is still extremely worrying to see a number of things inspired by our tremendous research base that we fail to adopt. The story of graphene, discovered in Manchester in 2004, is a very important example. I recently read a research report saying that the graphene sector will have a 34% compound annual growth rate over the next 10 years. As I read through it, the report identified that the country with the largest number of companies who have adopted graphene technology—the market leader—is the United States of America. The growth markets for the use of graphene expected over that period will be in South Korea and other areas in the Asia-Pacific region. We have singularly failed to commercialise one of our greatest modern inventions. That is a very sorry tale.

It also reminded me of the story of two individuals who were considering where they were going to locate a life sciences company to establish the overall solution to Duchenne muscular dystrophy. After looking at where they were going to get the best collaboration and the fastest and strongest access to capital, including in this country, they chose Boston in the United States of America. They raised more money there, in the shortest possible time, than any life sciences company could ever do in this country. We have a real challenge on our hands, which is why I appreciate the industrial strategy and hope that we can really make some huge progress on it.

I have two very quick points to make. One is on productivity. It was only recently that we discovered through the Bank of England that productivity in Q2 this year, measured by output per hour, was just 0.9% higher than a decade ago—which is, quite incredibly, the worst performance for 200 years. The key to our industrial strategy is what it will be able to do for productivity. We have to accelerate massively our attempts to address this challenge, and I applaud and welcome the establishment of a business initiative to try and address productivity, even on a unit basis, which is to be led by the McKinsey alumnus and former director of strategy at the Guardian Media Group, Tony Danker. I wish it much success. It is an important part of this, and I hope that we will see a much broader effort to try and address productivity in the White Paper.

Lastly, the question of governance, implementation and capacity is a crucial area, and I hope that the White Paper will address it in much more detail. In the end we will fail to achieve innovation if we do not have the right institutions, learn the right lessons or have the right leadership. We have had a number of important contributions on this. The noble Lord, Lord Bhattacharyya, commented on integrated long-term implementation, which is extremely important. The committee’s own suggestion of a means, similar to the OBR, of evaluating progress on the industrial strategy is an important one; if we do not measure it, we cannot assess it. We need something that gives a nationwide sense of what the challenge is.

We have to consider the institutions that we have. Do they have the capacity and bandwidth to do what we want them to? This summer I visited Silicon Valley and Stanford, and I can tell you that the reason why Stanford is a great success and a spur of innovation is that it does not impose onerous terms or expect too much from the things that come from its places. The noble Baroness, Lady Greenfield, made absolutely the right point: an American university gets money back in a different form through donations, so our models are not the same, but universities have learned how to make innovation flourish—and it is not about the university’s role and its accretion of value to itself.

There is a lot that has to be learned by our institutions in a very short space of time. We talked about DARPA. The question of whether or not we need such an institution is important, as is the question of whether we have the right range of institutions. In relation to the ones that we have, does Innovate UK have the right money or the right capacity, and can it invest the right money? Surely the Rainbow Seed Fund, the fund that we established to try to promote our research and innovation, is a paltry fund. I must declare an interest: I have co-invested with the fund, which I think is a most outstanding institution. To my mind, the fact that through the fund and others like it we have not invested the billions that are necessary to innovate in our country beggars belief, and I hope the White Paper will address that.