Innovation in manufacturing is the 鈥榦nly hope鈥� for Britain to win back
prosperity, a House of Lords select committee warned this week. Industry鈥檚
failure to remain competitive has 鈥榞rave implications鈥�, the committee says
in its report on manufacturing industry*.
Viscount Caldecote, the chairman of the committee, said that while
some British companies are among the best innovators, others should follow
their example, but government should point the way. 鈥榃e want a lead from
the government saying that (manufacturing industry) is vital to our future
prosperity, a lead we never got from Lord Young or Nicholas Ridley (previous
industry ministers).鈥�
The report is deeply critical of government policies that have relied
too heavily on market forces and neglected manufacturing in favour of
service industries. 鈥楢ll the evidence shows that the present lack of government
commitment, support and assistance is deeply damaging to industry and to
our national interest,鈥� it says.
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To remedy the situation and gain an edge on competitors, the Lords
recommend a number of practical and financial measures to 鈥榗reate a climate
in which innovation can more readily flourish鈥�.
The government should spend more on innovation, say the Lords. 鈥楩ailure
to maintain the national R&D budget gives the wrong signals to industry
about the importance of R&D and the innovation process to the national
economy.鈥� Government support for industrial innovation has slipped from
拢283 million in 1985/86 to 拢121 million in 1990/91.
鈥楨xpenditure by government on support of industry should be regarded
as an investment on behalf of us all, not a cost to be cut,鈥� the report
says. The committee also warns the government not to use improved links
between industry and academia as an excuse for cutting the budgets of research
councils and institutes of higher education.
The committee urges the Treasury to introduce tax credits for companies
that increase their spending on R&D from one year to the next. Tax
incentives are also needed to redress the shortage of skilled workers
for industry 鈥� a matter of the 鈥榰tmost concern鈥�.
The committee contrasts the poor status of manufacturing industry in
Britain with the high esteem in which industry is held by the country鈥檚
most successful competitors, in particular Japan and Germany. 鈥楾he most
urgent need is for a change in our culture . . . Antipathy to manufacturing
industry runs deep in our society . . . The conditioning which leads to
a belief that making things is a second-class occupation does us all a
诲颈蝉蝉别谤惫颈肠别.鈥�
*Innovation in Manufacturing Industry, HMSO, 拢11.40.
