You are on page 1of 50

launch

seminar

Th e A tlas o f Id eas:
C h in a,In d ia ,So u th K o rea
an d th e n ew g eo g rap h y o f scien ce

Transcript of the launch seminar

IEE,Lond on,12 O ctob er 2005


TH E A TLA S O F ID EA S:
C h in a,In d ia,So u th K o rea an d th e n ew g eo g rap h y o f scien ce

Text o f sp eech es an d d iscu ssio n at th e lau n ch sem in ar


IEE,Savo y P lace,Lo n d o n ,09:00 – 13:00,W ed n esd ay 12 O cto b er 2005

Alf Roberts, Chief Executive, Institution of Electrical Engineers


G ood m orning, ladies and gentlem en. M y nam e is AlfR oberts, and I'm Chief
Executive here at the IEE, and it's m y great privilege and pleasure to welcom e you to
Savoy Place, the London hom e ofthe IEE, for the launch ofthe D em os project, The
A tlas ofIdeas.

I guess we're allfam iliar with the cliché that the only constant today is change, but this
has certainly been a tim e ofconsiderable change for the IEE. We've been around for
130 years or so, but this year we agreed to m erge with another institution – the
Institution ofIncorporated Engineers – and form a new one called the Institution of
Engineering and Technology. We decided to do that because we discovered that the
two ofus had a shared vision ofhow engineering would be during the 21st century.
That vision said that engineering and technology would becom e even m ore
interdisciplinary, global, and integrated, or the word we prefer to use is inclusive.

In reflecting on what to say today by way ofintroduction, it struck m e that m aybe this
wasn't just the case for engineering. The m ajor challenges facing the hum an race going
forward are just as wellcharacterised by the adjectives interdisciplinary, globaland
inclusive. These trends have introduced seism ic changes in the U K econom y over the
past 20 years or so. M ost ofthe focus today seem s to be on the m igration ofrelatively
low-skilled m anufacturing jobs to low labour cost countries. But in reality that trend
has been there for som e considerable tim e. The U K share ofthe world m arket for
things that you can actually touch or pick up is now less than 40% ofthat ofG erm any,
who happen to be the world leader. But it's not just a problem for the West. China and
India are now im posing sim ilar strains on the econom ies ofTaiwan, K orea, and South
East Asia in general.

The standard response to allofthis has been to say, we m ust m igrate to becom ing a
knowledge-based econom y, replacing the low-skilljobs with high added value ones.
N ow, there m ay be a problem with this. It m ay be that Europe and the U S are not
producing enough scientists, engineers and technologies to m an such an econom y
adequately. And that m ight very wellbe seen to contrast with, say, China and India.
The form er, for instance, graduates engineers in the hundreds ofthousands a year,
whilst in the U K the best you can m ake ofit is around 10,000, m aybe less. O fcourse,
m easured purely in term s ofhighly cited research papers, the West and the U S in
particular are stillwellahead. But as our own publishing business shows quite clearly,
the growth rates in different parts ofthe world are beginning to narrow that gap.
N evertheless, it's stillthe case that 90% ofChinese workers are em ployed in agriculture
or the unproductive public sector. Wage rates are rising quickly in the developed
southern and eastern provinces. And when I spoke earlier ofthe increasing
interdisciplinary nature ofengineering, which I believe is reducing the relevance ofthe
traditionalways ofcharacterising engineering into specific disciplines like electrical,
m echanicalor civil, then it occurred to m e that perhaps the sam e decline in relevance
applies to the way in which we've traditionally characterised econom ies: developed,
developing and under-developed.

Perhaps China and India willbecom e exam ples ofthree econom ies in one country. In
the case ofChina, the south and east willrapidly becom e developed. The low
m anufacturing willm ove north and west. The extrem e northwest willrem ain under-
developed and largely agricultural, but over the next 20 years, the boundaries between
the three willm ove inexorably north and west. China, therefore, willchallenge not
only for low-skillm anufacturing, but also be a highly com petitive knowledge econom y
as well.

O fcourse, three econom ies in one country willinevitably create great socialstrains. I
m ean, we only have to look at the situation with two econom ies in one country, in
G erm any today. And this m ay lead to considerable instability. It's critical, therefore, to
understand what is really going on in China and India, not only from a technological
perspective, but from a socialand econom ic one as well. And that's why we hope that
this D em os project willshed som e light on these issues, and help allofus to see the
opportunities and threats that China and India both offer and pose, from a balanced
perspective.

I think the program m e we’ve lined up today, with an extrem ely im pressive set of
speakers, willgive the project a very powerfullaunch. So with no further ado, I'd like
to hand over to Jam es Wilsdon, H ead ofScience and Innovation at D em os, who is our
Chairm an for today. Jam es, with Charles Leadbeater, willlead The A tlas ofIdeas
project. Thank you allfor attending, and I hope you have an interesting and a
productive day.

Jam es W ilsdon, H ead of Science & Innovation, D em os


Alfthank you, we're very gratefulto you and to the IEE and, indeed, to allour
partners. It's quite a consortium that we've assem bled, and it certainly wouldn't have
been possible without our partners’ generous input and support.

Can I add a word ofwelcom e from D em os to you all. We're delighted to see so m any
people here. Today's event m arks the start, as Alfsaid, ofThe A tlas ofIdeas project.
N orm ally D em os would wait untilthe end ofa project, untilwe had a report to give
you, before organising such a large m eeting. But on this topic, in addition to the
tangible sense ofm om entum and possibility that you get from talking to scientists and
policy-m akers in Asia, we were very conscious ofthe groundswellofinterest that there
is in these questions here in the U K .
So we felt it would be helpfulat this point to bring together as m any ofthe interested
parties as we could, and begin a conversation that we hope willcontinue throughout
the project and, indeed, beyond.

The m orning is divided into two halves. In a m om ent, Charlie Leadbeater, m y partner
in coordinating the project, willoutline its objectives and the them es that we intend to
explore. We willthen hear three different perspectives on the new geography of
science. Firstly Lord Sainsbury, the M inister for Science and Innovation, then his
Excellency, K am alesh Sharm a, the H igh Com m issioner for India here in the U K , and
finally Sheila Jasanoff, who is Professor ofScience Studies at H arvard.

After coffee we m ove into m ore inform alm ode. We're going to have a keynote to get
us started from Lord Alec Broers, followed by a paneldiscussion with, am ongst others,
Ed Balls, Fiona Clouder-R ichards, and a variety ofother experts. And we hope that the
second session willprovide a chance for m ore participation and com m ent from you
all. So I won't say m ore now. There is an introduction to the project and its aim s in
your packs, but to put a bit m ore flesh on those bones, I'llhand over to Charlie
Leadbeater.

Charlie Leadbeater, D em os associate and coordinator of The Atlas of Ideas


Thank you Jam es, and thank you to the IEE and allour partners for m aking this
project possible. To explain the aim s and objectives, I'm going to adopt initially a kind
ofunabashedly autobiographicaland anecdotalapproach, which isn't at allscientific.
This project started for m e alm ost two years ago when I was at a conference, actually
with Lord Sainsbury, and said that I was about to em bark on a self-funded tour of
innovation centres around the world. And I m anaged to bum p into Fiona Clouder-
R ichards from the Foreign and Com m onwealth O ffice who very kindly put m e in
touch with her science and technology advisers, who m ade possible a series of
m eetings in different places. This is just a snapshot, really, ofwhat I found on that little
tour.

I m et a K orean m an who had started out as a tuna fisherm an 50 years ago, who was
m oving into the hum an enhancem ent business. H e had the largest herd ofgenetically
pure, virus-free pigs to breed hum an hearts in the world. H is point was very sim ple:
K orea is wellknown for m aking electricalcom ponents, and future healthcare is going
to be a big business, so we'llm ake hum an com ponents. Why, ifyou could live to 130,
wouldn't you want to do that? It's part ofan am azing story in K orea over the last
decade or m ore ofa huge growth in R & D and scientific output. In 1971, K orea spent
just $29 m illion on R & D , or about 0.3% ofG D P. N ow it spends about 3% ofG D P on
R & D . Between 1970 and 1974, K orean inventors were awarded just twenty-four
patents in the U S. Between 1995 and 1999, they were awarded 11,000. So this is an
extraordinarily rapid, accelerated rise up the science ladder.

N ext I went to Bangalore, and m et, am ongst other people, a biotech com pany called
Biocon. This started out m aking industrialenzym es. N ow it has a thousand em ployees
on the edge ofBangalore. 70% ofthem have higher degrees. They cost a tenth ofa
scientist in M unich. And the head ofresearch there, D as G utham , lent over the table
and said to m e, what you have to realise is that we only need 5% ofIndians to have
higher degrees like these, and we'llhave a scientific population the size ofthe entire
U K . Well, that's hyperbole in part, but it shouldn't be com pletely ignored. What you
witness in Bangalore is the huge scale and quality ofthe technicalknow-how: ofa sort
ofhum an capitalreserve that allsorts ofpeople can tap into.

At Wipro, one ofthe biggest inform ation service providers, they told m e the problem s
they were having in turning their know-how into intellectualproperty. They'd
invented allsorts ofsoftware that they thought was far better than that m ade by
M icrosoft or Sun, but they couldn't im agine turning it into a brand, and so they were
servicing these com panies. Everywhere you go in Bangalore, people talk ofSilicon
V alley. It's like a second hom e for a lot ofpeople. And yet that start-up culture seem s
to have m ade relatively little im pact on som e ofthe activities in Bangalore. I visited
one ofthe few start-ups to spin out ofthe Indian Institute ofScience, and it was clearly
quite a rare thing. So turning science into Indian products for Indian m arkets is
proving perhaps m ore problem atic than servicing m ultinationals.

In Taiwan, I had dinner with the M inister for Innovation, who was overseeing a new
innovation strategy – som ething new to Taiwan, drawn up because in the previous two
years 5% ofTaiwanese m anufacturing had departed for m ainland China. At the
H sinchu Science Park started only a couple ofdecades ago, I learnt that
the m ovem ent ofexpatriate scientific labour is now absolutely criticalto scientific
com petitiveness. When that Park was created in the early '80s, there were less than 50
returnees from the U nited States. N ow there are 3000. O fthe 297 high-tech com panies
in that park, 115 have been created by Taiwanese researchers returning from the U S.
So it turns out that the brain drain oftwenty years ago has becom e a huge investm ent
in hum an capital, which is a source ofcom petitive advantage. And largely thanks to
those returnees, Taiwan now m akes 70% ofthe world's integrated circuits.

In Singapore, I learnt that this circulation and com petition for scientific talent is not
confined to luring back expatriates. In the huge Biopolis being created just outside the
centre ofSingapore, I m et two scientists who had worked in the U K , both at highly
prestigious universities: one at Cam bridge, one at U CL. They had both been lured to
Biopolis by the Econom ic D evelopm ent Board, which had set out a very deliberate
strategy oftargeting key scientists who could then attract other research team s. O ne, a
scientist born in Preston, was revelling in the fact that he had just m anaged to hire
som e researchers from Y ale – one Swiss, one Spanish – to com e and work in
Singapore. N ow, none ofthat m eans that Singapore is going to have a thriving biotech
industry in ten years tim e, but ten years ago it didn't have a pharm aceuticals industry.
It willdefinitely be a player in that process.

These huge knowledge diasporas are going to be a criticalpart ofthis story. There are
m ore than 1.3 m illion people from the form er Soviet R epublics with a tertiary
education working outside R ussia, a m illion Indians, 700,000 Chinese. Loom ing
behind allofthis, as I travelled, was the power and the threat ofChina. I went to
Finland to look at the m uch vaunted and incredibly im pressive Finnish innovation
system , and visited a com pany called Elkatec, which m akes com ponents for m obile
phones, and has risen on the back ofN okia and Ericsson. They created their first
factory outside Finland in Estonia, and I went to look at it. They started m aking
m obile phones in this factory in about '97, and slowly they acquired the com petence to
not just m ake them , but design them .

When Elkatec opened its next factory, which was in H ungary, engineers from H ungary
cam e to Estonia for three m onths to learn how to set up the factory. Two years later
the next factory was built in M exico, and engineers cam e for three weeks. When the
next factory was established in China in 2003, no-one cam e, because the capability of
setting up a factory to m ake and design m obile phones was now so wellem bedded in
the com pany, they didn't need a lengthy process oflearning in Estonia. The guy
running this factory, U lm a Petisson, who is a kind ofEstonian nationalist, was
bem used, really, that only 15 years after escaping Com m unism and having worked so
hard to build up a capability in m obile phones, it was eroding so rapidly before their
eyes. The story there, ofcourse, is that China is not just com peting in low-tech and
com m odity goods, but in high-tech at the sam e tim e. Exports ofhigh-tech goods have
grown by 22% a year between 1992 and 2001 from China, a six-fold increase, two to
three tim es quicker than com parable Asian econom ies. It's doing high-tech and low-
tech and agriculture allat the sam e tim e.

So to round it off, a couple ofweeks ago, I went to R olls-R oyce, probably Britain's
m ost innovative, creative and successfulengineering com pany. R olls-R oyce has a
globalposition thanks to spending £650 m illion a year on R & D , and I asked them
about their future strategy in R & D . Twenty years ago, m ore than 90% ofR olls-R oyce's
R & D was done in the U K . N ow they spend the sam e am ount in realterm s on R & D in
the U K , but it's less than 50% ofthe totalthat they spend. 50% is now done outside of
the U K . I asked them about their plans to establish R & D in China or India, and they
said they were starting cautiously to do this, but that their m ain interest was in
technology partnerships with universities in the U K : 25 ofthem currently. When I
asked who was doing the science in the labs in these universities they said, wellof
course, it's nearly allChinese and Indian researchers.

So at the end ofallthis, I decided I had to go to China. From what one was hearing,
one would expect a story ofthe spectacular rise ofa scientific superpower. R & D
investm ent has increased in China by 15% a year between 1992 and 2002. It's close to
1.5% ofG D P. There are now m ore researchers working in China than in Japan. The
num ber ofresearchers has doubled to m ore than 800,000, and China has been the
recipient ofm assive inflows offoreign direct investm ent - $50 billion last year.
So one m ight expect to find a scientific powerhouse.

But when I m et the head ofN ew M argin V entures, leading venture capitalists in
Shanghai, in the gatehouse ofa form er com pound used by M ao and D eng X iaoping,
he said, well, we set up in business to back scientific ventures, and we looked hard for
scientists to back, but actually we couldn't find m any. And som e ofthose that we
found turned out to be charlatans, so now what we are doing is funding m anagem ent
buy-outs, bringing in Western technology and m anagem ent to turn around state
enterprises.

At the Shanghai Science Com m ission, where I went to learn about their long-term
plans for science, I was m et by twenty people who wanted to hear allabout Lord
Sainsbury's Foresight initiative, and the U K governm ent's im pressive 10-year science
and innovation plan. We have 5-year plans, they said, how can you have a 10-year
plan? Y et as an O ECD report on China's role in the world econom y in 2002 noted,
quantity doesn't m ean quality. There are m assive num bers ofpeople doing degrees,
but very few doing higher degrees. Education tends to em phasise theoretical
knowledge rather than research and problem solving. The legacy ofstate planning is
stillheavy;it didn't tend to reward innovation. The lack ofIP protection m eans that
com petition is ferocious on price, and that doesn't encourage R & D . The links between
perform ance and prom otion aren't obvious for m anagers, and so that doesn't
necessarily reward innovation. And the financing ofR & D is stillvery under-
developed.

That is allborne out ifyou look at one ofthe classic m easures ofR & D output, which is
patenting. D espite the m assive growth in R & D spending in China, the share of
Chinese patents granted in the U S and Europe has rem ained static at about 0.3% ofall
patents. So despite m assive inputs into R & D , one ofthe m easures com m only used for
outputs, rem ains very low. Even am ongst those patents, m ost were granted to
m ultinationalcom panies. N ow, it m ay be that patents are the wrong m easure to use,
and that we're sim ply not spotting what's really going on, but the conclusions that I
cam e back with from allofthat were three-fold.

The first is, there's just a huge am ount going on. A lot m ore going on than we m ight
give credence to if, as Alfsaid, we think that the com petition is just about low-wage
jobs, com m odity products, call-centres and services.

Second, I had absolutely no idea what it allam ounted to, because it's obviously a very
com plicated story with criss-crossing flows, things that look big but aren't big. It's very
easy to overestim ate what's going on, and it's very easy to underestim ate it, because
actually we have very little purchase on it.

M y third conclusion was that we needed a m ore sober and strategic overview ofthe
trajectories ofdevelopm ent ofscience and innovation in these countries to learn where
they're headed, what the im pact m ight be, how they're organising them selves, and
what are the opportunities for collaboration and com petition. The other thing that I
think I realise in com ing back was that, to do this, would require us to think afresh
about m any ofthe assum ptions that we've used to think about science innovation and
developm ent.

To close, I just want to run through what I think som e ofthose are. The first is about
leap-frogging. I think one ofthe assum ptions behind a lot ofscience and innovation
policy has been that being able to innovate and invest in science is a m ark ofa stage of
developm ent, ofa m ature econom y with surpluses to invest. Well, it turns out that in
K orea, that effort can be organised at a very accelerated rate. It can happen far m ore
quickly than perhaps we had thought. And in China it's clear that you can do
agriculture, low-tech and high-tech allat the sam e tim e. As Alfsaid, three econom ies
in one. That m ay be because science and innovation is becom ing highly regionalised.
So it's not really stories about these nations, but about very particular places in them ,
and the inequalities and tensions that breeds willbe a very im portant part ofthe story.
So that the whole m odelofinnovation being a distinct stage ofdevelopm ent, and you
have to pass through other stages before you reach it, I think is being thrown into
question.

There's also an interesting relationship between globaland nationaltrends here. O ne


ofthe m ost im pressive bodies ofacadem ic literature on innovation is called the
N ationalInnovation System s set oftheories, and it's assum ed that in som e sense
innovation is the product ofan interlinked set ofnationalinstitutions ofm arkets and
research and academ ia and so on and so forth. But these countries seem to be
developing nationalcapabilities on the basis ofdrawing from globalflows of
knowledge. So they haven't done nationalfirst and then gone global, it's alm ost as if
they're drawing down from globalflows to create their nationalscience base. What we
used to think ofas the brain drain, a kind ofzero sum transfer ofknowledge and
people, actually turns out to be som ething m ore like brain circulation, com plex and
criss-crossing flows ofpeople and ideas.

The third thing that struck m e is that, ofcourse, this is part ofa very fam iliar story.
When you look at who's doing R & D in these places, it's often m ultinational
com panies, large globalcom panies, searching for cheaper, better sources ofinnovation
close to fast-growing m arkets. There's absolutely nothing new in that. That's what
large com panies have always done. They've always been at the forefront ofR & D and
they've always been at the forefront ofglobalisation. This is exactly what you would
expect them to do. But there are two qualifications to that.

The first is that the way that com panies organise R & D willchange quite significantly. I
had a session with N okia, the Finnish m obile phone com pany, in which Erki U m ula,
the H ead ofScience and Technology Policy there said, look, twenty years ago we used
to think ofourselves as a m obile phone m aker, and we had a kind ofpipeline.
K nowledge over here, down a pipeline, products over here to consum ers. N ow we have
research in twenty centres around the world, we have researchers from 55 different
countries working together, and actually it's about orchestrating networks of
knowledge that m ove in tandem with m arkets, with ideas com ing to us from the
m arket as m uch as ideas are going down the pipeline outwards. It's a process of
orchestrating lots ofdifferent players around a new dom ain ofvalue, he said. So even if
m ultinationals are at the heart ofthis, the way they organise research is going to
change a lot, and the spin-offs from that m ultinationalresearch willhave localpay-
offs. It willtransfer and feed into the localeconom ies.
Another question is what's the public role ofknowledge in this globalising knowledge
econom y? The N ationalInnovations System s literature gives a very im portant role to
universities and the sharing ofknowledge through public protocol. What should be
the public accom panim ent to the globalisation ofprivate flows ofR & D ? This issue will
becom e m ore im portant, as is absolutely clear over the debate on SAR S and avian flu.
We'llneed stronger and m ore effective form s ofpublic cooperation.

Willthe em ergence ofm ore science in these econom ies m ean that we willdo new
science in new ways? Their science is growing at a tim e when we're on the verge of
dram atic advances in biotech, nanotech and other areas. WillChina or India invent or
create new ways ofdoing science in these areas by blending knowledge in different
ways? N ot just outsourcing or offshoring existing ways ofdoing innovation, but
creating entirely new kinds oforganisation. Edison's lab, invented at the tim e ofthe
growth ofelectronics and the rise ofthe telephone, was a classic organisational
innovation that defined how R & D was done for m any years afterwards. Well, willwe
find in these places organisationalinnovations ofthat kind as well?

And willnew science m ean new ethics? I think there's a widespread assum ption here
that science thrives in a kind ofworld described by K arlPopper and R ichard Florida,
in which ideas are openly contested and debated. As Florida argued in The C reative
C lass, it's tolerance that creates the atm osphere in which talent is attracted, and then
technology follows. But that doesn't necessarily seem to be the case in Asia. In fact in
som e respects, biotechnology is advancing in these countries because there isn't that
kind ofculture. Because there is, as the people in the econom ic developm ent board in
Singapore put it to m e, a m uch m ore pragm atic approach to these questions.

PaulD avid, the econom ic historian, argues that the open culture ofscience in Europe
is historically contingent. These very different cultures willcreate entirely new cultures
and ethics ofscience. And they willcreate new kinds ofproducts when they start
addressing those very fast growing m arkets. At Biocon, they were m ainly m aking
statins for western m arkets. It will, I think, becom e incredibly interesting when they
start m aking products designed for the Indian m arket. O ne ofthe m ost interesting
products that was being developed when I was in Bangalore was the sim puter, a m ulti-
lingualhandheld com puter for use by farm ers.

And finally, we won't be able to think about the future unless we think about the past
in new kinds ofways. This is not a story ofem ergence, but a story ofre-em ergence.
When Europe was in the dark ages, K oreans were using m etallic printing, China was
using gunpowder, India was developing sophisticated m athem atics. I was in Blackwells
bookshop in O xford yesterday looking at the history ofscience shelves, and it's an
am azing account, really, ofscience through the eyes ofa series ofgreat m ale European
inventors. There was a great book called Leonardo:the First Scientist, which m ight
strike you as rather odd ifyou're Indian or Chinese. I think there were two books
about China in that entire shelfofhundreds ofbooks. So we should beware that our
own viewpoints and fram eworks for this are heavily inflected by the history of
colonialism , which colours the way we think. In 1935, Sir Arthur Eddington, then one
ofthe greatest astrophysicists, publicly ridiculed a young scientist who had just arrived
in Cam bridge from M adras, who had com e up with the theory ofblack holes. It set
back astrophysics for 40 years, and Chandrasekhar won a N obelPrize belatedly in
1983. We should bear that story in m ind when thinking about the im pact and
im portance ofscience in India.

So what does allthis m ean? Well, it m eans we're entering a new phase ofglobalisation.
A phase in which ideas, people, knowledge willflow as easily as com m odities, m oney
and products. Ideas willcom e from m any m ore places. There willbe m any m ore
players, and it willbe m uch m ore uncertain. That m eans there willbe m ore
com petition: com petition for talent, com petition for resources, and com petition in
products. That willhave big im plications for the ways in which we organise ourselves.
But there willalso be huge opportunities for collaboration, for the public
accom panim ent ofthat m uch m ore dynam ic knowledge econom y. And it also m eans
that we'llbe living in a m uch m ore com plicated, m ulti-polar world in which ideas will
com e from m any m ore sources. That's why I'm very pleased that the Foreign O ffice
have led this consortium with others, the British Council, Scottish Enterprise,
V odafone, M icrosoft, SEED A and others, to m ake this project possible, and I hope that
we can report back to you in due course on what we find out. Thank you very m uch.

Jam es W ilsdon
Charlie, thank you. We're going to hear now from Lord Sainsbury, the M inister for
Science and Innovation. Lord Sainsbury has long been a cham pion ofthese questions
within governm ent, and as Charlie m entioned, he's also been a source ofgreat
encouragem ent to us at D em os in developing this project. We are really delighted that
he could be here today.

Lord Sainsbury, M inister for Science and Innovation, D TI


Thank you very m uch. I think at no tim e since the industrialrevolution, has the
restructuring ofglobaleconom ic activity been so great, with Asia m oving from the
fringes ofthe world econom ic order to the centre. We're seeing the world's division of
labour being redrawn. In 1980, less than a tenth ofm anufacturing exports cam e from
the developing world. Today it is alm ost 30%. In 20 years tim e, the figure willprobably
be 50%. I think this new econom ic geography is leading to a new science and
technology geography alongside it. So I'm delighted to be here at the launch event for
The A tlas ofIdeas, which I think is an extrem ely exciting project to m ap the trends in
science and globalisation with a particular focus on the em erging econom ies ofAsia –
China, India and K orea.

I think this study is im portant because ifwe are to form relationships ofm utual
advantage with em erging econom ies such as China, India and K orea, we need to do so
on the basis ofgood knowledge oftheir scientific and technologicalstrengths and
weaknesses. When events are m oving as fast as they are in Asia today, I think it's
extrem ely easy both to overestim ate and underestim ate their knowledge base. I was
hugely encouraged by Charlie Leadbeater's introduction, because I think what we need
now is really hard facts and econom ic expert judgem ents. We've had enough ofwhat I
think ofas excited journalism , ofthe kind that says I visited Bangalore and there were
allthese white-coated Indian scientists standing by gleam ing laboratories. That's fine,
but it doesn't actually give you a good assessm ent ofwhat is a very com plicated but
extrem ely interesting and im portant situation.

Ifyou look at what is happening in China, you see a very interesting situation. But it's
not sim ply that China is a high-tech country powering ahead. It's m uch m ore
com plicated than that. O r perhaps it's m uch m ore sim ple than that. What the story of
China is today, I believe, is a story ofa country which has brought together what is
necessary for econom ic growth, which is a reasonably well-educated population, very
low wages and a m arket econom y. And what we now know is that ifyou bring those
ingredients together, in the globalised world in which we live, you can expand progress
m uch faster than was ever possible in the past. That's because ofm odern transport and
m odern com m unications. What China is growing on is not the basis ofa lot ofhigh-
tech, it's on the basis ofa huge am ount offoreign direct investm ent. That foreign
direct investm ent is by and large bringing the technology into China.

N ow the situation, as always, is m uch m ore com plicated than that, in the sense that
there is, an additionalfactor here which was not present in the story ofJapan, and I
think hardly at allin K orea, but m ay turn out now to be very im portant in the case of
India as well, which is, ofcourse, you have a large diaspora, and that includes an
enorm ous population ofvery good Chinese scientists who have been underpinning the
Am erican scientific system . What you are now seeing is these people com ing back to
China and ofcourse that willradically change the position and m ean that China can
m uch m ore quickly play its part in a high-tech world. But I don't think one should
confuse that with what is happening econom ically at the m om ent in China, which is
very m uch powered by foreign direct investm ent and foreign technology.

Even in the case ofTaiwan, again, where you've had the enorm ous im pact from
Taiwanese scientists and entrepreneurs who have com e back from Am erica, it's quite
interesting ifyou look at what is happening there in the electronics field, where the
designs and the m ajor advances are taking place stillin Silicon V alley, but because the
Taiwanese scientists and entrepreneurs have com e back from Silicon V alley and have
very good contacts there, what you're seeing is a flow ofideas com ing back and being
m anufactured in Taiwan, or now in China. But it's allon the basis ofthe developm ent
being done in Silicon V alley. So I think we need to be able to take a m uch m ore subtle
and carefulview ofwhat is happening in these countries ifwe are to have really
m utually advantageous relationships.

Also, we need to be very clear-headed about our own com petencies and knowledge in
these areas. There is a tendency in these things to go and visit these countries and say,
they have huge num bers ofscientists and engineers. Well, usually it is engineers, and it
is im portant to keep in m ind is whether you're talking about engineers or scientists. A
lot ofthese countries, particularly it's true ofJapan, it's true ofK orea, it's true now of
China, have very num bers ofengineers. And that's where they put a huge effort.
Against that we do indeed appear to have very few engineers. But ifyou broaden it out
and look at the num ber ofscientists, then the picture is rather different. O fcourse, in
any ofthese countries, sim ply because ofthe scale ofthe country, the num bers are
huge. But people always look at the U K and start saying, we're not producing
scientists.

Well, about 40% ofour undergraduates are in fact scientists. The num ber has gone up
hugely in recent years. There are now 120,000 m ore young people studying science at
university than in 1997. N ot only do we have a fantastic science base, which is one of
the best in the world, but we're also beginning to use that science and technology to
create the high-tech businesses ofthe future. So nothing willbe gained from this study
ifit's just a question ofgoing round and saying, we can't do this in the U K , and there's
allthis fantastic science and technology taking place in these other countries. That
would just be repeating an old British failing, which is to go from ignorance to despair
without any interm ediate stage ofactually thinking about where we're good and how
we can exploit the opportunities that are opening up.

Ifwe are to becom e a key hub in the knowledge econom y, which is what we plan to do,
we need to get em erging econom ies to invest in R & D in this country, and we need to
forge partnerships with the best research abroad. Both ofthese objectives depend on a
good understanding ofthe new scientific and technologicalgeography. At the present
m om ent we're drawing up a new internationalscience and technology strategy to
inform our relationship with other countries. This has four objectives. U sing
internationalscientific collaboration to m ake sure that the U K retains its outstanding
record ofdiscovery and rem ains at the cutting edge ofworld science. Secondly, using
internationalscientific and technologicalcollaboration between countries, universities
and venture capitalists to increase our innovation perform ance. Thirdly, using science
as a toolofdiplom acy to tackle problem s such as clim ate change. And fourthly, using
scientific and technologicalcollaboration to help the developing world tackle its
problem s. And I believe that the D em os work could form a very usefulinput into this
strategy.

I m entioned the figures about restructuring the world econom y, and when you look at
this, the im pact ofChina and India is enorm ous. China and India could be the second
and sixth largest econom ies in the world in 20 years tim e. O n a purchasing power
priority basis, the IM F estim ates China is already the second biggest econom y in the
world behind the U S, and alm ost double the size ofJapan. India is already bigger than
G erm any, the U K and France. China and India are now turning out m ore engineers,
m ore com puter scientists, m ore university graduates – 4 m illion a year – than the
whole ofEurope and Am erica com bined. In this new geography we have to forge new
partnerships to collectively m ake the m ost ofour skills, science and technology. As the
Prim e M inister said during his recent visit to China, “it is in the areas ofscience, and
technology, and knowledge that the future ofboth our econom ies is going to be
found.”
Let m e first say a few words about China. O fcourse, this has been one ofthe world's
m ajor econom ic success stories since reform began in 1978. China's econom y has
grown by an average of9.5% a year over the past 20 years. And lately an increasingly
sophisticated range ofexports has sustained this growth. But again, as I said earlier, we
need to be clear about whether this is on the basis ofhom e-grown science and
technology, or on the basis offoreign science and technology. Ifcurrent trends
continue, we could see China's econom y quadrupling in size between 2000 and 2020.
And China becom ing the largest world's exporter by 2010, with China's goods and
services representing as m uch as 10% ofworld trade.

N ow in the U K , we are already building partnerships with China in high-tech trade


and inward investm ent. The two biggest foreign investors in China are Shelland BP, of
course who are both British and science-based. O ther significant British investors in
China include G laxoSm ithK line and AstroZeneca and V odafone. Som e ofthe m ajor
British exports to China are in precision instrum ents, m edical, optical, phototechnical
chem icals and pharm aceuticals - allscience-based. So here you see what you would
expect to be happening in these circum stances, which is that China is m aking m ost of
its growth on the base ofits low wages. It m ay be high-tech m anufacturing, but of
course it is foreign technology.

In M arch 2004, H uawei, which is a m ajor Chinese telecom s com pany, opened their
European headquarters in Basingstoke. A U K R & D centre willfollow. As China's
econom y has grown and opened up, so has the country's science and technology base.
In 2003, China spent approxim ately £10.2 billion on research and developm ent,
representing 1.35% ofG D P. It's aim ing for a figure of2% by the end ofthe decade, but
already China's R & D spend is in PPP term s the third largest in the world, after the U S
and Japan. Well-equipped lab buildings are going up on the cam puses ofm ajor
Chinese universities. In Beijing and Shanghai, m ultinationalcom panies are setting up
m ajor R & D facilities. And China's share ofthe internationalscience literature is rising
too. China willpublish a 2020 plan for science and technology priorities over a broad
range ofsectors in early 2006.

O fcourse, they have a slightly different view ofscience and technology plans than we
do. Their plans are still, I would conceive, old-fashioned in the sense that they seek to
plan where they willactually put the science and technology resources, as opposed to
what we see as the way that you plan ahead, which is to plan the am ount ofresources
to go in, but keep a great dealofflexibility on how those willbe funded through the
research councils. It's a very different view ofwhat a science and technology plan is.

We've increased our resources on the ground to open up links with China in science
and technology. The FCO now has science team s in Beijing, Shanghai, Chongqing and
G uangzhou, working in partnership with British Councilcolleagues. The FCO 's
science officers also work very closely with U K Trade and Investm ent and with the
G lobalWatch InternationalTechnology Prom oters ofthe D TI, to m ake the m ost of
com m ercialopportunities and high tech m issions. For exam ple, two Chinese science
park incubators have been established in the U K , at Cam bridge and M anchester, and
these are paired with incubators in Wuhan and G uangzhou. So we have the idea that
there m ay be cases where the Chinese governm ent wants to get Chinese com panies to
go globalin high-tech fields. And the way they willdo that is by putting them in
incubators, like these in Cam bridge and M anchester.

We also have annualm eetings on science which take place at a m inisteriallevel. I've
visited China as M inister for Science and Innovation six tim es since I've been M inister,
and I think each visit has revealed m ore ofChina's dynam ism , the m om entum for
change and opportunities to build links through science. I was delighted in January to
launch our year long ‘U K -China Partners in Science’ initiative. This aim s to prom ote
collaboration with China and to raise the profile ofU K science.

Funded by the O ffice ofScience and Technology, the FCO , the British Council, U K TI
and private com panies, the initiative includes som e one hundred events. These have
included workshops or m issions on clim ate change, food safety, hydrogen energy,
astronom y, B3G m obile phone technology, advanced jet engine technology, foodborne
pathogens, advanced m aterials and m anufacturing engineering. O ther events stillto
take place include workshops on cancer research, plant science, e-science, satellite
technology, the science ofsustainable developm ent, polar research and urban
planning.

Events co-ordinated by the FCO focus principally on senior Chinese S & T specialists,
governm ent officials and high-tech Chinese businesses. Alongside these activities are
events, led by the British Council, designed to engage a wider audience ofeducated
city-dwellers in the 16 to 35 year old age bracket.

This co-ordinated approach has had a realim pact. In January I opened the U K -China
H igh Tech Forum . M ore than 100 delegates from U K universities and com panies m et
with 200 leading Chinese scientists, technologists and officials. Topics covered
included cancer research, renewable energy, knowledge transfer and the role of
venture capitalin science. This was a highly productive m eeting, prom pting the China
D aily (the nation’s biggest selling English language daily) to declare on its front page
that ‘Britain, China unite in hi-tech research”.

Allevents under the initiative have delivered a clearer sense ofwhere and how U K and
China can benefit from collaboration. M edia activities and targeted networking have
helped to raise the profile ofU K science. The initiative is on target to deliver a step
change in the num ber and quality ofscience and technology links between the U K and
China.

Turning now to India, which is also an extrem ely im portant partner for future U K
engagem ent. The Prim e M inisters’ initiative signed on 20th Septem ber 2004 set out a
new strategic partnership between the U K and India. The initiative identifies key areas
for cooperation, where we want to tap the rich vein ofinnovative talent that both
countries share. India, ofcourse, has the second largest English speaking scientific and
technologicalworkforce in the world. Every year it produces m ore than 3.4 m illion
science graduates, and 690,000 post-graduates. An estim ated 1.5 m illion scientists and
technicians are involved in research and developm ent.

India produces world-class science. The 24% rise in its recent science budgets indicates
the im portance that India places on R & D . Substantialfunding for biotechnology
research, significant com m ercialinterest, the creation ofa new nationalstem -cell
research taskforce, and a new draft biotechnology policy have allensured robust
growth in this sector. O ther areas ofinternationalexpertise include pure m athem atics,
theoreticalphysics, chem istry, inform ation technology and space research. There are
laboratories and institutes ofthe highest internationalstandard. And a space
program m e boasts a varied fleet ofsatellites and indigenous launch capability. India
has also joined the European G alileo Program m e, and we've allheard about India's
globalposition in software developm ent and IT-related services.

Again, our officers in country from the FCO , British Council, and U K TI work together
to facilitate policy influence, and build scientific and com m erciallinks. A real
m ilestone for our science and technology relations with India is the agreem ent to set
up a new Indo-U K Science and Innovation Council, which willfirst m eet in M arch
2006. This willproduce a step change through closer coordination ofscience and
technology interests across allgovernm ent departm ents in both U K and India, m aking
the m ost ofthe globalcom petitiveness ofboth science com m unities. It willalso
produce a m echanism for prom oting British and EU funding opportunities, and
fostering higher education links and networking. I m yselfm et with M inister Sibalin
July to discuss how to take forward the developm ent ofthe Indo-U K science and
technology action plan, and I hope to visit India next year.

Som e exam ples ofhow we've taken forward links with India include a visit by
Professor D am e Julia H iggins, Foreign Secretary ofthe R oyalSociety, to India's
prem ier research institutions, to explore possible collaborations. An Indo-U K stem
cellworkshop was held in Bangalore in April2005, instigated by our science team in
India. And as a follow-up, the R oyalSociety hosted a m eeting in London in July
attended by the British scientists, other U K stakeholders, Indian scientists and policy-
m akers.

As a result ofthese m eetings there are m oves for India to join the internationalstem
cellforum and set up a link with the U K stem cellbank. We already have in place with
India a num ber ofscholarship, networking and collaboration schem es. We'llcontinue
to develop these to get the best young Indian talent to study or do post-doctoralwork
in the U K , including the 10-20 m illion education initiative for India, announced by the
Prim e M inister when he visited last m onth. We willalso work out the developm ent
side ofthe science and innovation relationship with India, building linkages in
agriculture, health-related research, technology transfer, and capacity building. We
willcontinue to foster scientific links in shared areas ofexcellence such as ICT,
biotechnology, m aterialsciences, nanotechnology, genom ics, environm entalsciences,
m athem atics, physics and chem istry.
O ur vision is that the U .K . should be a key hub in the globalknowledge econom y.
This m eans that the U K should be a country fam ed not only for its outstanding record
ofdiscovery but also for innovation, a country that invests heavily in business R & D
and education and skills, and exports high-tech goods and services to the world. We
should also be a country to which talented entrepreneurs and world-class com panies
com e from around the world to do research and set up high-tech com panies, attracted
by the quality ofour research and the strong links between universities, research
institutes and industry.

Finally, we should be a country with strong science and technologicallinks with the
best research around the world, so that we can stay always at the leading edge. The
D em os project willbe a valuable toolto further inform policym akers, universities and
business on how to take these interactions forward and forge new partnerships in the
future.

Jam es W ilsdon
Lord Sainsbury, thank you very m uch. And now to com plem ent that very helpful
overview ofthe activities ofthe U K governm ent, we're pleased to have the H igh
Com m issioner ofIndia here in the U K , K am alesh Sharm a, who is going to give us a
view from the Indian side ofsom e ofthese debates.

H .E.K am alesh Sharm a, H igh Com m issioner for India in the U K


Thank you very m uch. First ofall, I want to com plim ent those who have devised the
title for this sem inar. I think 'Atlas'is a very happy choice ofword, because you do
require a new atlas in two ways. O ne is the geographicalatlas in our m inds which
divides the world into north and south, and into herm etic national, southern and
northern entities. V ery recently, in the Journalfor Econom ic Perspectives, Paul
Sam uelson who is m ore than 90 years old and doesn't usually write anym ore stirred
him selfto write and enter into a debate. H e said, look, I think I'm the biggest free
trader since Adam Sm ith, but I thought that the way the world is going to m ove
forward is that the north would vacate areas towards the lower end as it m oves up the
value chain, and the south, as it has done, steel-building, ship-building and so on, is
going to possess those areas, and that's how globalisation and globaleconom ics is
going to work. Well, he said, I now see that's not how it's going to work. Because what
the south is doing is saying, thank you very m uch, we accept this lower-value area and
now we're going to challenge you at the higher and the upper end as well.

So what we used to think ofas north and south, as developing and developed is no
longer valid. The old atlas has to go, because you have countries in the south – India,
China and m any others – with the developing capability that is associated with the
north, and that is a key factor. N ot whether X percentage ofthe population is living
under one dollar a day. The question is, are they available to the north for partnership
or not, and econom ically how to get them in partnership? The geography has changed.

M r Leadbeater m ade a very interesting point that the m entalgeography has to change
too. In the N ew Y ork N aturalH istory M useum , they have done som e research that
shows every visitor has about 45 seconds ofattention tim e per civilisation. As you walk
past, you are supposed to glance through allthis – this is what the Chinese did, this is
what the Indians did, this is what the Japanese did and the Arabs and so on. And the
Indian section is fascinating because halfofthe things I didn’t know m yself.
D om estication ofcotton, 2000 BC;dom estication ofchickens, 2000 BC;first surgical
intervention, 600 BC;the value ofpi, som ething like 500 BC. It goes on like this.

There was a trick question in the N ew Y ork Tim es, and the question was as follows:
who is it who discovered the heliocentric universe? And people thought the trick was,
is it Copernicus, is it G alileo, is it som ebody else, K epler? And ifyou said one ofthese,
you were wrong, because the correct answer was Aryabhata, the Indian astronom er,
who said allthis and spoke about the axis and why the seasons change and so on. But
the m ost startling thing was that ifyou said any ofthe Western nam es, you were out by
m ore than 1000 years.

This is not an unim portant point. Indian civilisations are supposed to have entered the
sand a long tim e ago, and culturalpalaeontologists are supposed to dig them out and
reconstruct them . In the history ofthe world, the only two civilisations which have
been there from the beginning ofcivilisation and are m odernising them selves are the
Indian and the Chinese. So people willbe surprised at what they can do, and the rest of
the world is going to be surprised as well. After all, there has to be a m eaning when
people say they are an old civilisation.

Why should it m atter whether you are 5000 years old or 500 years old? Well, it does
m atter, apparently. Because there is a D N A ofcapability and achievem ent which
obviously is ineradicable, which com es out when the conditions are right. This is what
is happening, I think, before our eyes. In m anufacturing, this point was m ade recently
in a CBI conference when som eone got up and said, please don’t be surprised at what
is happening. India and China are trying to claw their way back towards the 50%
contribution to the world’s production which was theirs tillabout the m iddle 18th
century. So it’s nothing new. They can handle it, the question is, how are you going to
handle it?

What does it m ean for globalisation? G lobalisation has various types. Techno-
globalism is going to have very different features. I read som ewhere that there was a
decision taken that 3% ofEurope’s G D P investm ent should be in science and
technology. Well, som eone m ade a calculation: ifit’s tough to get there with the
m oney, it’llbe even tougher getting there with the people, because that would involve
creating 700,000 extra scientists. N ow even with 25 countries in the European U nion,
that m ight take som e doing.

Ifyour m indset is we have to produce this only from the north, m aybe you can’t get
there. But ifyour m indset is that now there is techno-globalisation, you can find others
to m ake partnerships and alliances with you. I can do clinicaltesting there, I can do
m olecule developm ent there, I can do som ething, then you have a package which
m akes sense econom ically, and which gives you m om entum and velocity, and in
which the em erging capabilities are being used.

A very im portant point was m ade by M r Leadbeater: the capabilities are there, but the
entrepreneurialability has lagged behind significantly. There are 100 R & D centres
from Fortune 100 com panies - m ainly U S - in India, and thousands ofpatents are
being posted by these 100% owned com panies. But ifyou look at spin-offcom panies,
there are not that m any. So I think the future ofany alliance is in how you can get the
ability as wellas the entrepreneurialinput. This is why everyone wants to have a share
in the com pany, in the m anagem ent ifpossible, so that we can act get this form of
collaboration going.

The third question is about brain-drain. It used to be called brain-drain, until


Chandrasekhar was m entioned, and K horana in m edicine and Chandrasekhar in
physics got N obelprizes. And people started asking in India, where would these
people have been ifthey hadn’t left the country? They probably would have been
pushing paper in in-trays and out-trays in som e laboratory. Isn’t it fair that talent finds
its highest levelwherever it can find it? So we becam e very liberalabout sending
people and this is now paying dividends back to us. Because now you have one terrain.
To Indians abroad, physicalincom e, now, has becom e less im portant than psychic
incom e. They want to be at the place where they can m ake the biggest contribution,
and ifthey can go back to their own country and culture and m ake the contribution
there, in partnership with the West which they know so well, this is what is going to
happen.

This opens up another very interesting perspective, which isn’t som ething that’s
happened overnight. N ehru m ade this investm ent in the 1950s. N ehru said, we are the
poorest country in the world. India are a people, we can do anything anybody can do
anywhere. And this is going to be the basis ofour planning. It’s not going to be
sequential. It’s going to head on allfronts and then try and get the steam going in allof
them . So you had societies, polytechnics, engineering colleges, institutes oftechnology,
m anagem ent, universities and everything. Allofthis was being created. This
intellectual, hum an capitalwas there, but it was not tradable.

Then cam e a technologicalrevolution in telecom m unications, first when the dot com
com panies went bust, then it was optic fibre facility. For a song you could get
broadband. What would be a disadvantage in m erchandise trade, which was that your
client is halfway across the world, becam e an advantage because you can pose a
question when you go to bed, and the answer would be back by breakfast. And
overnight, this created what was non-tradable into som ething which was tradable.

N ow for a long tim e, a country like India has been an econom y with a lot ofinertia. A
lot ofour m odernisation began because ofexternalreasons. The Soviet U nion
disappeared, which was the m odelfor planning. We had a huge balance ofrepaym ent
crisis, so we were propelled into m odernisation. That phase has gone. N ow India is an
intellectually, econom ically, self-propelled entity. People are saying that you started
with callcentres, then you went into BPO – Business Process O utsourcing, then you
went to BTO – Business Transform ation O utsourcing, now you’re into K PO –
K nowledge Process O utsourcing. The U niversity ofStanford has done a study ofwhy
Indians are so good at being able to leapfrog from one to the other, and they’ve com e
to the conclusion that Indian com panies have shown a particular aptitude because
from one assignm ent they can distilthe essence, and keep on reducing their costs from
one assignm ent to another. Which is why there is going to be an inherent locom otive
in the knowledge econom y ofthe future. Whether it's agriculture, ofthe four or five
m ain com ponents ofan econom y, the oldest is agriculture, m anufacturing, trade,
services, or knowledge econom y. In allofthem India is in the start-up m ode. H alfof
the people ofIndia are less than the age of25. It's raring to go, it's at the starting
blocks. It's not a country which is getting tired, it's a country which is raring to go.
Thank you.

Jam es W ilsdon
H igh Com m issioner, thank you very m uch. O ur finalspeaker this m orning is Shelia
Jasanoff. Som e ofyou m ay have been at the event D em os hosted about a m onth ago
for the launch ofSheila's latest book D esigns on N ature. That book is a com parative
study ofthe politics ofbiotechnology in Europe and the U S, and we hope Sheila will
draw out som e ofthe connections in these debates about China and India to wider
discussions ofscience, ethics and dem ocracy.

Sheila Jasanoff, Pforzheim er Professor of Science and Technology Studies,


H arvard U niversity
Thank you, Jam es. It's wonderfulto be here and to listen to talks com ing from so m any
different perspectives, and wondering, as the third speaker on the panel, what I'm
supposed to be highlighting in this sort ofwrap up set ofreflections. I am , ofcourse,
based in Am erica, and being in a U K setting and listening to the British talk always
brings out the hidden linguist in m e, and I start wondering, what is it am I hearing,
and what is it am I not hearing? And it's reassuring in a way for the m ost free m arket
econom y in the world, as a scholar com ing from there, to hear allthis talk about
cooperation and participation and the very m odelofthe hub. I com e from a city,
Boston, which is called 'the hub', and that im plies that you only operate in tune with
other things. Y ou're not going it alone. So for an Am erican it's particularly reassuring
to hear that kind ofrhetoric sitting in the U K .

But as a scholar dealing with these questions, I was also listening quite hard to hear
what kinds ofcollaboration and what kinds ofpartnership and what kinds of
connections and cooperations people are talking about when they use this, to m e, very
pleasing set ofim ages about not going it alone in the world. That leads m e to wonder
about the kind ofm odelofinnovation that is underlying the talk ofpartnerships,
leapfrogging and so on that people have very intriguingly raised allm orning.

Let m e begin with the interesting list that Lord Sainsbury gave us ofthe kinds of
com panies that are doing wellin China – British com panies. H e said that they were
science-based, and I believe the list consisted ofShell, BP, G laxoSm ithK line,
AstraZeneca and V odafone. Why are these the com panies that are doing wellin
China? It seem s to m e, at least as a naïve listener to this account, that these are
com panies that deliver goods and com m odities that people unquestionably regard as
their birthright and that they know how to take up into their lives. So whether it's
m obility and autom obiles or telecom m unications or healthcare products or things to
do with food, these are very m uch things that we know are biologically, socially,
culturally universally needed for the developm ent ofhum an life. So it's not particularly
surprising to m e in one sense that the com panies that know how to serve these
particular niches are ones that should m ost readily have found partners in other
societies across culturalbarriers.

I was also interested in the H igh Com m issioner, M r Sharm a's account ofthe tim eline
suggesting what kinds ofcontributions traditionaleconom ies, that are seen as
developing econom ies today, had m ade historically to science and technology. So 2000
years ago, India contributed such-and-such. Ifyou look on the tim elines ofbiotech
com panies, they often begin in 6000 BC when China discovers, for exam ple, the
brewing ofbeer. But what's the nature ofthose innovations? They pre-date science
policy, the language ofhubs, and innovation and leading edge kinds ofeconom y, so
what exactly was the process that allowed those kinds ofinnovations to com e into
being? And one is forced to conclude that the hallm ark ofthat era ofinnovation was
that it was bottom up. That the needs that people had were in som e sense driving the
kinds ofproducts, goods and com m odities that cam e into being, rather than being
science driven, as we classically understand it, in term s ofthe elite ofa knowledge
society com ing up with where the next breakthrough is, and then that breakthrough
getting translated into products and going on into the m arket.

Well, why should we care which m odelofinnovation we're talking about? The bottom
up kind that puts the needs ofpeople first and generates discoveries, to be sure in
partnership with the best knowledge talents in the world? O r the kind ofinnovation
that says, invest in the knowledge talent first, the brilliant m athem aticians, the brilliant
engineers, the brilliant scientists, let them produce innovations and let these
innovations go forth into the world? Well, partly the reason why we should care is that
the second m odelofinnovation, the one that says begin with the talent and let it
dissem inate into the world, into new products and so on, doesn't always work.

In the m ost recent Indian election, there was a surprising turnaround, a reversalof
fortune for one ofIndia's m ost talented leaders, Chandra Babu N aidu, in the state of
Andhra Pradesh. H e had m arketed this other view ofinnovation, ofhow India should
lead the high-tech revolution, and how governm ent policy ought to safeguard and
prom ote it and so on and so forth. The Indian electorate in a resounding victory, as
m any people saw it, for popular dem ocracy, said no thank you, that's not the way we
want to go. There's som e other m odelofconnecting technologicalprogress to the
needs ofpeople that you've got to present to us. N ow, I'm not enough ofan Indian
politicalscientist to say whether the Indian electorate did right or wrong in that case,
but I think it's an interesting case study that has to be taken on board as we try to
collect the facts on the ground about what is going on in these countries in term s of
how people are seeing the nature ofthe technologicalprogress that's being laid upon
them .

To com e to som ething that I'm m uch m ore fam iliar with, the biotechnology politics
m aterialthat Jam es was kind enough to m ention, here it's a north-north kind ofcase
study that bears reflecting on. Am erican com panies like M onsanto were science-based
com panies considering them selves at the leading edge ofrevolutionary product
developm ent in a burgeoning new area oftechnologicalinnovation. It turns out that
M onsanto's ideas about how to m arket its innovative products failed resoundingly
when those products cam e to Europe, and perhaps willfailin different ways as that
m odelofinnovation tries to m ake inroads into Africa and other places as well. And
what was the nub ofthat failure? I m ean, it's not the case that scientists failed to do
their job. The innovations cam e out ofleading m olecular biology, genetics and so on.
But I think what M onsanto had failed to reckon on is that successfulproducts have to
fallinto a world in which people understand how to live with the products that are
being laid before them .

The term that anthropologists use that nicely captures this set ofideas is the
im aginary. What is the socialand culturalim aginary into which an innovative product
falls? Why is it today that N okia has m uch m ore success than nuclear power? It has
som ething to do with the culturalim aginaries into which the products ofour
innovative capacities are able to em bed them selves. European farm ers, European
publics, European consum ers were not able to take on board happily and without
contestation the kind ofagriculturalproduct developm ent that Am erican com m ercial
biotechnology was putting before them .

Ifthere had been the right kind ofcom m unication, not from industry to industry, but
from industry to consum ers, then a different kind ofinnovative trajectory m ight
actually have gained a foothold in the U nited States, before expensive m istakes were
m ade and before people had to learn to backtrack. And it's ofcourse not uninteresting
to m e that Sainsbury’s as a food m arketing chain proved to be, in som e sense, a wiser
m anager ofinnovation by deciding to follow very different policies with regard to G M
products from the officialU S governm ent position at the tim e.

So I think that the plea I would m ake as D em os goes on with its A tlas ofIdeas project,
and as that project interfaces with policym akers in industry and in governm ent, not
only in the U K but in the countries that the U K hopes to be in partnership with, is that
the horizon for who to involve in these discussions be vastly widened. This is not a
discussion that should be based on a linear pipeline m odelor even a m odified linear
pipeline m odelin which one begins with the investm ent in science and stresses
m easures like num bers ofpatents and num bers ofengineers being trained. N obody in
this room is unsophisticated enough to think that those num bers by them selves m ean
anything.
But there should be an active interest in figuring out institutionally, politically, socially
how to engage the people for whom these innovations are being targeted. People are
not only the m arket that Charlie Leadbeater rem inded us m ust be co-constructed
along with the knowledge, but they are actually innovators in and ofthem selves.
People figure out when they get the technologies how they can use them in noveland
interesting ways. And sources ofinnovation then em erge from the wider
dissem ination ofthese products am ong people who have the knowledge to m ake use
ofthem .

It's not coincidental, going back again to Charlie's point, that we need to think about
the past in innovative and creative ways. That the industrialrevolution which the U K
spearheaded went hand in hand with the rise ofa m iddle class that was able to m ake
use ofthe products that the industrialrevolution brought into being. So we need,
today, a thoughtfulre-enactm ent, ifyou will, on a globalscale ofthis kind ofvery
dynam ic m ulti-faceted industrialrevolution. This set ofindustrialrevolutions we're
living through is every bit as m uch a societalrevolution and not just a revolution that
begins in the scientific labs. So while I'm totally in favour ofthe language ofscience-led
innovative knowledge econom ies and societies, lets keep in m ind that in the end those
societies are only going to be as robust, as sustainable, as dem ocratic as the people for
whom these innovations and these discoveries are intended. Thank you.

Jam es W ilsdon
Sheila, thank you for those very helpfulthoughts and challenges that the Atlas project
willneed to grapple with as we get underway. We're running out oftim e so I think we
m ay take just a quick round ofcom m ents from the floor. In the second session we'll
have m ore opportunity for debate.

Floor speaker
To what extent you think we are constrained by cultural, politicalfactors? Charles
Leadbeater, you looked in ‘U p the D ow n Escalator’at the im pact ofpessim ism on
society today,. Are there culturaland politicaldifferences between the north and
em erging econom ies in Asia and the im pact that these have on scientific and
technologicaldevelopm ent?

Q im ing W ang, Chinese Em bassy


I'd be very interested to see any com m ents com paring India and China’s science and
technology and about any differences in those two countries in respect to the West.
And why.

Louis Turner, Asia Pacific Technology N etw ork.


Y ou're keeping Japan out ofthis. Could you throw out a few ideas about what
judgem ents you have about Japan? 10 or15 years ago, there were allthese argum ents
about how the centre ofgravity ofcertain sciences was going to Japan. That was the
sort ofcom m on wisdom then. What's different between Japan, China and India?
Jam es W oudhuysen
I wonder ifLord Sainsbury could go into a little m ore about science as a toolfor
diplom acy in relation to clim ate change. The London Assem bly has just looked at the
Tham es G ateway developm ent and flooding, and the Environm ent Agency has warned
offlooding. So clearly we need to change the prism through which we look at so m any
things today. What do you m ean by science as a toolfor diplom acy?

Anne M cLaren, U niversity of Cam bridge


I was interested by the m ention ofa possible new ethics ofscience, which I think is
going to be very im portant. But what strikes m e as interesting is that the ethics of
science that I have com e across in China and South K orea is very sim ilar in its
pragm atic approach to the ethicalapproach in the U K , and different from other parts
ofEurope, different from the U nited States. So I think that augurs wellfor future
cooperation.

Jam es W ilsdon
Thank you. We've got a good spread in just five questions there. Can I invite the panel
to offer a briefresponse to one or m ore ofthose questions. Charlie, we'llstart with you.

Charlie Leadbeater
Well, first ofallon this question ofculture, I think the Indian H igh Com m issioner put
it well, that India is not a tired country. O ften in Europe things can feelquite tired,
very defensive, inward looking, and concerned with ourselves rather than the wider
world. So I think one just has to go to these places to sense the energy that's there and
the sense ofthe future. The danger is that that allgets translated here into a kind of
pessim istic defensive politics. Part ofwhat we're doing, I suppose, is to explore why
that shouldn't be so.

O n Louis Turner's question about Japan, I'm speaking as som eone who went to Japan
precisely to try and find that out just as the bubble burst. I spent m y tim e trying to find
where things were happening, only to find that the bubble was burst. So it m ay be that
this is absolutely the right tim e to stop being interested in science in India and China,
because it's about to burst. But the lesson that I would draw from that was that we
becam e too focused on particular m echanism s in Japan, about particular ways of
working. We becam e too obsessed with particular things that the Japanese were good
at – which they are stillfantastically good at – quality and increm entalinnovation,
without realising our own strengths.

D uring the first G ulfWar, there was a huge debate about the technology ofK orea and
Japan, and then in the following decade, the U S sem i-conductor industry resurged on
the basis ofradicalinnovation. So I think that one ofthe lessons ofallofthis is that
there are m any different ways ofbeing a knowledge econom y. There isn't just a
Japanese way or a Finnish way or a Silicon V alley way. There are m any different routes
into it.
And in regards to the question from the gentlem an from the Chinese Em bassy, one of
the dangers about the debate is that politicians lum p China and India together into
som e am orphous great threat called ‘Chindia’, which is an am algam ation ofthe two.
But they are very, very different. Fascinated by one another but very different. Just the
politics ofhow science and technology is organised, the history ofthe way that it's
been approached, these are very different places which m ean that getting a subtler
understanding, as Lord Sainsbury said, is absolutely critical. So I think the over-riding
thought for us is to com e back to this sense that there are m any different ways ofbeing
a successfulknowledge econom y. There isn't a single recipe. And that we m ust find
our own in a m uch m ore com plicated world where there willbe m any m ore players.

Lord Sainsbury
Well, dealing first with com parisons ofChina and India, I think there are two different
factors. The first has to do with the educationalsystem s. I think you could characterise
it that China has a very broad educationalbase. That is to say that it has very high
levels ofprim ary and secondary education across the country. It's not so good in
higher education, it's put less resources into higher education. India, by com parison, is
less good in term s ofthe basic education across the country, but has very high levels of
graduate education and has som e rem arkable higher education establishm ents in
term s ofthe Indian Institutes ofTechnology. So there is a slightly different balance
there.

O n top ofthat you've got the fact that I m entioned earlier: the huge num bers, in both
countries, ofscientists going to Am erica and underpinning Am erican research. I think
initially there have been m ore ofthose people com e back to China. So there are very
high quality Chinese scientists com ing back to China. I think that's less true in India
but I believe it is now happening. And then ofcourse you always have cultural
differences, which are interesting in this also.

I think the Japanese situation is worth reflecting on, and it's one ofthe reasons that I
think you need to take a rather sober view ofthese issues, because everyone, including
m yself, said we have to look at what's happening in Japan, they've discovered whole
new ways ofdoing things and we have to learn from it. Som e ofthat was true, som e of
it wasn’t really very new or different. And they also had som e problem s. It com es back,
I think, to this situation ofa country which puts together a m arket econom y and
where science and technology is im ported. Y ou can grow very fast, and that looks from
the outside enorm ously dynam ic, as ifpeople are inventing new things. Therefore, you
have endless books which talk about Japan as num ber one, learning from Japan, what
we m ust do to keep up with Japan.

We are now about to enter the China is num ber one era. We've just had the first book
on what we can learn from Chinese m anagem ent m ethods. I think one should be
rather scepticalabout this. I suspect there is very little we can learn from Chinese
m anagem ent. What they are doing is just using ruthlessly and extrem ely welltheir low
wages plus foreign technology to grow very fast. So, I think one should be aware of
what's happening, and always be a little bit scepticalabout claim s ofwonderfulnew
ways ofrunning the econom y, or running com panies in these situations.

Finally, the question about science as a toolofdiplom acy. The Foreign Secretary and
the Foreign O ffice have taken on board this idea that a lot ofthe issues in diplom acy
now have a science aspect to them . So when we are talking about clim ate change at a
Foreign Secretary or Prim e M inister level, it is extrem ely im portant that that is
underpinned by knowledge ofour science and technology position and what is
happening in the other countries. It's about both, in the case ofclim ate change, the
actualscience and technology involved, but it's also about other issues like, for
exam ple, the Foresight program m e we did on flood and coastaldefences. I think it's
very interesting how Sir D avid K ing, who's m ade this whole issue ofclim ate change
very centralto his work as ChiefScientific Adviser, is now constantly advising the
Prim e M inister and the Foreign O ffice on these issues, so that our diplom acy in these
areas is wellfounded. What it tells you is m odern diplom acy often now has to take on
board issues which have a very strong science base.

K am alesh Sharm a
The first question was a very pertinent and interesting one. H e's absolutely right. I
m ean, your elitist dream s can run away with you. Y ou can run away with them and
leave the people far behind. But ifthere is no culturalor politicalor socialownership
ofwhat your policies are, then they are not sustainable. H e's absolutely right. I'd like to
m ake three points. The first is that there is a very wide base in India ofentrepreneurial
excitem ent and talent. I was astonished recently to learn ofthe num ber ofbusiness
schools in India, m aybe m ore than a thousand, which obviously are ofvery variable
quality. But this m eans that no m atter where you are in India, ifyou are in the
burgeoning Indian m iddle class, you can join a business schooland learn whatever you
can. So there is a widespread process ofentering the new econom y. And you can see it
also in the m ergers and acquisitions which are happening abroad. It's a naturally
entrepreneurialeducated com m unity. Certainly the m iddle class is not being left
behind.

The second point is that the people can see that the tools being used to preserve your
knowledge base as well. O ne ofthe biggest program m es we have is for the
digitalisation and eventually taking the intellectualproperty out on thousands ofform s
oftraditionalknowledge. They were even trying to take out a patent on yoga postures
in the U S. O n m any ofour traditionalitem s, we’ve challenged successfully, so people
see that we’re not just, you know, using knowledge for the sake ofjoining the north
but we are using it to preserve what can be classified as traditional.

And the third point is that India had to find an answer to the opposition in the eyes of
m any between the digitaldivide and the developm ent divide. Is one relevant for the
other or not? And I think India has dem onstrated, certainly to the satisfaction ofits
own people, thanks hugely to the contribution ofour president, who’s always on this
team , that yes you can use the highest technology to solve your ancient developm ent
problem s. For instance, sam e boat, sam e fish, sam e fisherm an, but through the satellite
he is guided to where to fish, and then through m obile phone he is told where to bring
it and sellit for the highest price. The connectivity revolution in India is based on the
m obile telephone. The off-take ofm obile telephone in India today is an astonishing
hundred thousand per day. And this is going to villages and everywhere. It’s getting to
be a very, very highly connected country.

Literacy. I spoke about scientists in Europe. To educate Indians in prim ary school, and
the M inister’s quite right, that’s a deficit sector, you need another m illion ofteachers.
So what we’re trying to do is tele-education through our satellites and also com puter
literacy and these are two very successfulprogram m es. We are trying to convince the
people that this is not a schizophrenic science policy. It has som ething for everybody.

Sheila Jasanoff
I’lljust say one thing about ethics and pragm atism and that is that I’m always a little
bit nervous when people start celebrating pragm atism , because behind it lies a
question about pragm atic in w hose view. Pragm atism works when there’s considerable
agreem ent about the m eans and the ends to be used in any given context. It m ay seem
to us that other people are being equally pragm atic, but ifwe look behind their
particular accom m odations we m ight find a very different set ofvalues anim ating their
pragm atism from ours.

So I think that one shouldn’t underestim ate the kind ofrich politics that underlies
what the Am erican status quo now looks like with regard to som ething like stem cells,
for instance. We m ay look less pragm atic on the surface, but it’s possible that behind
the lack ofconsensus, certain rather im portant questions are being put on the table
and being worked out in m ore detailthan m ight be the case ifwe reached a very
pragm atic settlem ent early on and decided to go forward without investigating those
questions. So I’lljust leave us with that little bit ofunease about what seem s on the
surface a happy accom m odation that the word pragm atism evokes.

Jam es W ilsdon
G reat. Wellit’s always good to head into coffee on a note ofunease. But before we go,
please join m e in thanking again our four speakers for such a thought-provoking start
to the day.

[A pplause - end ofsession]


Jam es W ilsdon
Welcom e back. In this session, we’re going to begin with a keynote speech from Alec
Broers, and then we’re going to m ove into a paneldiscussion where hopefully there’ll
be m ore opportunity for questions and com m ents from allofyou.

So just to introduce Lord Broers. Alec Broers is President ofthe R oyalAcadem y of


Engineering. H e chairs the H ouse ofLords Science and Technology Com m ittee and of
course he gave this year’s R eith Lectures, which I’m sure m any ofyou heard, on the
them e ofthe trium ph oftechnology. And it was his references within som e ofthose
lectures to the changing globalgeography ofscience that sparked our interest and led
us to invite him to elaborate on som e ofthose thoughts in the context oftoday’s
discussion. So we’re really delighted that he’s here. Alec Broers.

Lord B roers
Thank you very m uch. I think m uch ofwhat can be said about this situation was said
before the break, so I’m not going to reiterate allofthat. But I’m going to put m y
particular twist on it. I’llbe borrowing from what I said in the R eith Lectures on
occasion, but I stillfeelthat m y point ofview, which I know is shared by a lot of
engineers and technologists, is not shared by m any people in this country, although we
get sort oflip service for it. Clearly technology has becom e global. N o single com pany
m akes allofits products, it’s got to look allaround the world. Innovation goes on all
around the world. We don’t disagree about any ofthese things. Where I think we
disagree is the balance between science and engineering and or technology creation.

M ost m odern technologies are created by bringing together and developing


capabilities which already exist. Few em erge from fundam entally new ideas. The
genius lies in the capability to bring these things together, and there are countless
exam ples to illustrate this. The long sought m obile phone was m ade a reality by
bringing together m athem aticalconcepts ofcellular networks, advanced ultra high
frequency radios, low power m icro processors and im proved batteries. The m obile
phone was not invented, although buried within it are innum erable inventions. The
hybrid car com bines the efficient m odern internalcom bustion engine with pollution
free electric drive and system s that recycle the energy dissipated in braking. All
existing capabilities but in a noveland powerfulcom bination. The m odern jet airliner
com bines hundreds ofindividualcapabilities in m echanicaldesign, aerodynam ics, jet
engines, electronic com m unications and navigation system s, and the airports that they
serve are wonders ofm odern civilengineering. O ther exam ples easily com e to m ind:
ocean oildrilling rigs, electronic stock exchanges, the globalpositioning system , the
apparatus used to decode D N A, the iPod and so on allcam e about through a process
in which established capabilities were further developed and com bined in new ways.
They did not em erge directly from new science.

A strong science base is essentialto m odern society but it’s not sufficient ifone wants
to be com petitive in producing state ofthe art technology. That’s m y position. Lord
Sainsbury said we don’t have as m any engineers as China or India, but we’ve got lots
m ore scientists. I think we’ve got the balance wrong. O fcourse we need the scientists
and we need the science, but we’ve got to have the really bright people on the other
side. The countries that are going to succeed in the world econom ically in new
econom ies are going to be those where the brightest ofthe young people go into the
creation ofnew technologies. It needs just the sam e power, intellectualpower.

We had pictures ofa m icro processor chip up here before. That’s m y gam e. I’ve been
in that gam e since before it began. The intellectualpower that was needed to put those
20 m illion transistors in that com plex m icro processor is about 50 tim es m ore in m y
estim ate than what Bardeen, Brattain and Shockley did at BellLabs in 1948. It doesn’t
even use the transistor they cam e up with. N ow their work was brilliant, but they were
doing a technologicalthing, they were being paid by AT& T to find a solid state version
ofJJ Thom son, Langley and D eforest vacuum valve. They weren’t seeking the answer
to G od’s universe, they were doing technology.

The laser is always quoted, what was the laser? The laser was the thing that followed
the m aser. What was the m aser? The m icrowave am plifier, m aser stood for m icrowave
am plification through stim ulated em ission ofradiation. It was a technologicaldevice
solving a technologicalproblem .

So I think we don’t quite understand this. The institutions and places in this country
that are outstanding are those where our outstanding young people go. O ur science
base is one ofthem and I wouldn’t want to have that change. The City is another. Let’s
face it, and we shouldn’t really say it here, Alf, should we but I don’t think we can say
at this stage that we are truly world leading experts and excellent in technology
creation. We have som e very bright spots, we have som e very good com panies, but I
don’t think we can say that generally.

N ow this is about China and India, the changing geography, because it’s no accident
that we see these countries em erging in innovation. I worked for IBM for 20 years and
I spent the first 15 years in research, and then I was in developm ent. It’s another thing
I heard again this m orning that I don’t resonate with. In Europe, R & D is allone thing,
I m ean to m e, they’re not. I worked in research and then I m oved to developm ent:
different m indset, different activity in m any ways. The interesting thing is that those
pure research labs, like the IBM Thom as J Watson research lab had a lot ofpure
science going on in it. We thought that the com pany really owed it to society. BellLabs
were the sam e – the background radiation in the universe. In Y orktown, we had
people looking at gravity waves, fractors, galaxy form ation.

N ow in m y opinion looking back as som ewhat ofa cynic, or with scepticism at least on
those days, is ofcourse AT& T and IBM were in effect m onopolies, so they could afford
it. Com panies can’t do that anym ore and the interesting thing is that there aren’t
corporate research labs doing fundam entalscience alm ost anywhere in the world now.
It’s best done in universities, but I’m not going to diverge into that one. I just want to
com pare IBM with Intelfor a while because I think the world’s gone towards an Intel
m odelfrom the m odelwe had at IBM . We had a research lab, that research lab had its
own sem i-conductor fabrication facilities. When we wanted to transfer a technology
we had to take that technology and transfer it into a developm ent lab silicon line.
H aving done that, we had to transfer it into m anufacturing. This turned out to be
inefficient, hugely expensive. Fortunately we had lots ofm oney and we could afford it.

Intelhas never done things that way. They have engineers m odifying and playing with
processors on their m anufacturing line during the off-hour. They gradually build up a
series ofchanges and m odifications, im provem ents that are processed. They try out
new things here and new things there. When they’ve got a great new accum ulation and
they can shrink to a new dim ension they build a new facility. But they do it m ore in
the evolution oftechnology, so it’s im proving what already exists. It’s very m uch what
the Chinese have already done.

Look at China M obile’s lab in Beijing. I think it was a brilliant m ove on their part.
They invited in N okia, Ericsson, M otorola, Alcatel, and they gave them allspace. And
then on the top floor they gave twice as m uch space to H uawei. And look where
H uawei is now, doing extrem ely well, caught up with world technology with rapid
speed just as has happened allover those place in those technologies in China and
India. Its utterly phenom enalthe rate at which they have established capabilities that
would have taken years and years and years. And I hope also learning to live in the
disciplined world that one has to live in with intellectualproperty.

I was asked to tellthis story. We kicked offin Cam bridge this week a program m e for
educating or interacting with senior CEO s ofChinese com panies: som e 30 very senior
Chinese industrialists and business m en. And I talked to them , as did John Browne
and N orun Sanderson and Stephen G reen, and they asked m e, did I think technology
would proceed as fast in the 21st century as in the 20th century? I went back to a little
story. I worked on the developm ent ofIBM ’s 3090 system . I reckon that by the tim e
the 3090s were really launched in ‘83-4, IBM had invested som e $4.5 billion ofR & D
in those system s. At about the sam e tim e, a Japanese com pany, through industrial
espionage, stole the design m anuals for those com puters. That com pany was taken to
court and was fined $400 m illion. But ofcourse they got ten tim es that in R & D
developm ent.

Ifwe look around the world at the m om ent, I don’t know whether it’s the risk or the
com petition, but I don’t see those giant technologicalprojects so m uch anym ore. I
don’t know who’s doing that today. The closest thing perhaps is in som e ofthe sem i-
conductor and drug com panies. They would claim , and perhaps they are spending that
sort ofm oney on developing new projects on really long term things. But iftechnology
is to proceed at the phenom enalpace it proceeded in the 20th century, there willhave
to be those giant projects and those involved in them willhave to be able to get their
m oney back, or they plain won’t do it because there won’t be any business sense in
doing it.

Just to finish up on ethics and risk. I have been im m ensely im pressed with the genuine
interest and willingness to com m it to these issues ofethics and risk in both China and
in India. I delivered a talk with the World Engineering Forum in Shanghai on this
topic and I thought I would be in one ofthe sm allroom s at the back and that m ost
people would start yawning before I got into it. N ot a bit ofit. I delivered the lecture in
the end in the m ain hallwith som e 3,000 in the audience, and probably 100 hands
went up at the end to ask questions and to com m ent on this issue. People are really
interested in this.

What should we do? WellI think there are severalthings we should do. I like the
article by Charles Leadbeater and Jam es Wilsdon in the FT today. I thought that got it
exactly right, there’s no way we can regard the Chinese and Indians as a threat in any
way, we’ve got to join in with them , we m ust work with them . Ifwe don’t, it won’t
perhaps m atter that m uch to them , although it willm atter a lot to us. We m ust join in.
What we’ve got to try and do, I think, also, is to balance the flows ofpeople. We’ve had
huge quantities ofChinese and Indians com ing to this country and being ofhuge
benefit to us. I’ve run university research projects, how would we have done this
without som e ofthe brilliant people we’ve had from these countries.

But we’ve got to now balance the flow. I think m ore ofus should be going there. It’s
one thing we’re trying to do in the R oyalAcadem y ofEngineering. We have got som e
new globalresearch awards that enable high quality British engineers engaged in R & D
in industry to be seconded overseas. We’ve tried to introduce internationaltravel
awards and we’ve got new program m es com ing that willallow top levelengineering
researchers to spend tim e in these countries. I think this is an extrem ely im portant
thing.

The other thing we can do is to help in other ways, ifwe’ve got m ore sophisticated
capabilities and can exchange these things. The H ouse ofLords Science and
Technology Com m ittee kicked offyesterday an enquiry. It’llbe a rapid one into
pandem ics, needless to say triggered by avian flu. N ow one ofthe problem s with
pandem ics is ifyou can identify things very fast, then you can shut them down. Ifyou
can’t, ifit gets away from you and there’s alm ost no stopping it, an epidem ic has to go
through its cycle. But we could certainly help in south-east Asia in particular with our
sophisticated capabilities in m edicalidentification etc. I think it’s across the board. We
m ust think ofways that we can help and then im plem ent them .

WellI’m afraid I’ve jum ped allover the place, but thank you allvery m uch, that’s all
I’m saying to kick offthis paneldiscussion.

Jam es W ilsdon
Alec, thank you. That’s really helpfuland there are lots ofthem es there that we can
com e back to now in the discussion. As I say, we’ve got a paneloffive speakers,
including Alec m akes six. And what I thought we’d do is get two or three m inutes of
initialthoughts from each ofthose speakers before then opening it up to questions. So
our first panellist is Ed Balls.
Ed B alls, M P for N orm anton and form er Chief Econom ic Adviser to H M
Treasury
Thank you very m uch indeed. Thanks for inviting m e today. I was very pleased to
discuss the project at the beginning with Charlie Leadbeater and to play a part in
organising today’s conference. I very m uch welcom e the project. I think it’s very
exciting indeed.

I don’t think that I agree that the biggest threat to our country in science is
protectionism . The biggest threat is com placency and it’s im portant to think that
through. We as a country have always had an internationalist tradition in our attitudes
to trade, in our attitudes to science. Alm ost m y earliest m em ory is ofacquiring what
turned out to be an extensive stam p collection, which I think I was never allowed to
touch. M y father was the secretary ofthe British Society for D evelopm entalBiology
and the InternationalSociety for CellBiology. This was back in the early 1970s. And
the InternationalSociety for CellBiology run out ofa British U niversity m eant this
wonderfulflow ofletters arriving from allover the world alm ost every day, and he
collected this astonishing stam p collection on m y behalf. As I said, I’m not sure I’ve
seen it for 25 or 30 years because it was always far too precious for m e to ever to be
allowed to touch.

But it was an exam ple, ifyou like, ofthat tradition ofinternationalism and
collaboration in science, which is as deep in our culture as it is in our attitude to trade.
Y ou only have to com pare the reaction ofthe trade union m ovem ents in Am erica and
Britain to the debate about globalisation, to see how different our histories and
cultures affect the way we see new challenges. The British trade union m ovem ent has
always been internationalist in its outlook and is cham pioning trade justice and
opening m arkets in developed countries to exports from India and China, rather than
opposing them . I don’t think protectionism is our problem .

I don’t think that when the politicians m ake the speeches which Charlie referred to his
article this m orning in the FT with Jam es. I don’t think that what they’re doing is
saying, we m ust erect barriers to India and China. I think what they’re saying is do you
understand the scale ofwhat’s happening around the world, the pace ofchange, the
com m itm ent ofgovernm ents and scientific and business com m unities? And do you
understand that in order for us to continue to be productive and to succeed
econom ically we need to be doing the sam e thing? I think it’s m ore a callto action
than it is a callto protect. And that is what you see when you go into m ore detailin the
speeches by G ordon Brown in China, Tony Blair in China, or you listen to Lord
Sainsbury this m orning or you look at the long list ofdifferent collaboration projects
happening at the m om ent between our governm ent and governm ents around the
world, but particularly with India and China.

I don’t look at allthat and see protectionism . What I do think is that we’ve done a
great dealin term s ofinvesting in science over the last few years. But as Alec said,
investm ent in pure science is only part ofthe solution. It’s actually about the attitude
and the approaches being taken in businesses around the country to the issues ofR & D
and innovation and technologicaldevelopm ent. The challenge ofthe new science
fram ework is for the public and the private sectors in Britain to work together and
m atch each other in term s ofcom m itm ent and resource and funding and outlook and
am bition. I think the politicians are saying we need as a society, as a whole
com m unity, public and private, to really understand the way the world is changing
and rise to the challenge. And so I hope we never in Britain see a shift to protectionism
in trade or in science, I think that would be a betrayalofour past. I don’t think it’s
going to happen, but we do need to understand the way in which other countries are
changing very fast.

There’s a great quote I saw from a senior vice-president for Cisco who said this is an
article in August, “We cam e to India for the costs, we stayed for the quality and we’re
now investing for the innovation”. The sense is that that this lifecycle ofattitudes has
happened over a very short period oftim e. The issue is, how we can deepen
collaboration but also understand the challenge back to us – to us as a society, us as an
econom y, us as a business and scientific com m unity. That’s why this project is very
im portant because I think it’s starts from a com m itm ent to collaboration and what we
need at the end ofit is an understanding ofnot only what needs to be done
internationally, but also what the challenge is for Britain to m ake sure we don’t end up
being left behind. I don’t see being left behind as a race to the bottom or a zero sum
gam e, but just not understanding what you need to do ifyou want to continue to
deliver prosperity and decent jobs for your citizens. That’s really what the challenge is.

I’ve just com e over from the H ouse ofCom m ons this m orning where we were having a
debate about the future ofthe coalindustry in Britain. And it struck m e, as this debate
was going on, that it was actually a good preparation for the discussion which was to
follow. This is surprising, because ifyou’d been talking five or ten years about coal
you’d have been discussing it differently. There would have been som e people saying
coalhas no future, and there would have been others saying, we m ust protect the
indigenous industry. And there would be som e people saying, how can we sensibly
m anage decline?

The debate these days is quite different, not sim ply because ofissues around security of
supply, but because ifyou take a globalview ofclim ate change and you look at what’s
happening in India and China, what we need is not only collaboration in policy term s,
but also collaboration in scientific and technologicalterm s to m ake tackling clim ate
change consistent with power generation and industrialdevelopm ent. And you look at
India and China, and you can look at Britain, and you see three countries which have a
quite substantialdependence on coal-fired power generation, And in the case ofChina
certainly, and I guess in India as well, an expanding dependence on coalpower
generation.

The only way in that context to address the issue ofclim ate change is to invest in clean
coaltechnologies, in carbon capture and storage which is a new and very im portant
and exciting area ofscientific and technologicaldevelopm ent, driven by necessity,
driven by a reality as Lord Broers was saying, that this is where we start from .
There is no future in Britain, China and India com peting to be first in clean coaland
carbon-free technology. We have a huge interest in collaboration across our countries
to understand and then im plem ent those technologies. That just struck m e this
m orning as one very concrete exam ple where this discussion, which D em os is leading,
and the Foreign O ffice are sponsoring and others are supporting, could m ake a real
difference. Collaboration in technology not just for econom ic developm ent, but also to
tackle clim ate change. That’s why, in this area and m any others, I hope that the project
willproduce not just a greater understanding, but also som e concrete areas where we
can m ake future progress.

Jam es W ilsdon
Ed, thanks very m uch. I think certainly the environm entaltechnologies strand ofallof
this willbe an im portant part ofthe project as we get underway. O ur next speaker is
Fiona Clouder-R ichards. Fiona is H ead ofScience and Innovation at the Foreign
O ffice. FCO are the lead funder ofthe project and we’re very gratefulto Fiona and her
colleagues, not only for that practicalsupport but also for the big contribution they’ve
m ade to shaping the research agenda that we’re now em barking on. Fiona.

Fiona Clouder-Richards
Thank you, Jam es, and I’m delighted to see the progress this project has already m ade
since I m et Charlie som e tim e ago. I think already we see the m om entum ofthe project
starting to take off. But I hope from the m eeting today we’llget lots ofinput from
everyone in this room on the future direction ofthe project, both intellectualinput,
sharing ofwhat we allknow about China, India and other key partners in Asia, and
also feedback on what you want out ofthis project. It is in allour collective interest to
understand how best we can engage as partners with this new geography.

We have a m essage from Jack Straw, the Foreign Secretary. H e says that “at the heart
ofBritain’s approach to science and innovation lies a spirit ofinternational
collaboration, and our ability to work with em erging scientific nations such as China,
India and South K orea willbe vitalto securing Britain’s long term prosperity. I am
pleased to offer m y support to the A tlas ofIdeas project. This im portant and tim ely
study willim prove our understanding ofscientific and technologicalchange in Asia
and help policy m akers and the private sector to respond creatively.”

And I think it’s on that creative response that we need to focus our discussion today.
We’ve had an outline ofthis project, it’s very m uch at the start and we’re alllooking
forward to future discussions that can help to drive forward our partnership agenda.
A question was asked earlier about science as a toolofdiplom acy and this is som ething
I’ve been very interested in, in trying to build up science work in the Foreign O ffice.

U ltim ately science is about our world ofthe future, driving our collective econom ic
prosperity, driving trends in globalisation, driving socialchange around the world and
the ways in which our societies interact with one another. It’s also about the future in
that science provides m any ofthe tools and solutions that can help us to address som e
ofthe big globalissues, like clim ate change, like m anagem ent ofdisease, for exam ple,
looking at how we can respond to the threat ofpandem ic flu. And so we need to build
a dialogue that understands how science plays into these foreign policy issues and how
science can also be another language ofinteraction. H ow science by its nature, by the
way it can cut across politicaland geographicalboundaries, can help forge new
partnerships.

We’ve heard today about the trends and excitem ent in China and India and other key
hubs in Asia. O ur partnership in this new geography is not only im portant for
scientific advance or econom ic prosperity. I think we also have to consider the broader
globalinfluences ofcountries such as China and India, and how we can use science as
a way ofbuilding further understanding and partnership which m eans that in the
future developm ent ofthe world there willbe strong friendships, strong alliances
between the U K , China and India and other key countries.

Also we have to be realistic. We’re sitting here very m uch from a U K perspective,
thinking how we wish to partner with these countries. I think we need to get realand
realise that these em erging scientific nations are looking very strategically about who
they wish to partner with. What we need to ensure is that we prom ote the excellence of
the U K science and engineering base, we prom ote the U K as a place for inward
investm ent and we forge partnerships through our high-tech trade, and so realise the
governm ent’s vision ofthe U K as the best place in the world for science and
innovation.

And so from the Foreign O ffice we have our network ofscience officers around the
world working with the British Counciland with U K Trade and Investm ent, and in
partnership with agencies across governm ent and the private sector, to look at how we
can further internationalinteractions. So please use the Foreign O ffice as a resource to
help take forward som e ofthese partnerships.

I m yselffirst got involved in science in China back in the early ‘90s and I’ve been
privileged enough to go back m any tim es since. I was also able to visit India earlier this
sum m er and indeed am looking forward to working out there next year. And I think
in both places, you get a realsense ofthe things changing very, very fast. So I hope that
we, through our efforts in the Foreign O ffice with our partners, and through this
D em os project are going to understand how best to engage creatively. Thank you.

Jam es W ilsdon
Thanks very m uch, Fiona. N ext up is Stephen Em m ott, who is D irector ofExternal
R esearch for M icrosoft’s research labs in Cam bridge.

Professor Step hen Em m ott, D irector of External Research, M icrosoft


Research, Cam bridge
Thanks very m uch. I’lltry and be brief, but necessarily it willbe quite high levelso
apologies in advance.
I think that there are three fundam entally im portant things that are underway, which
have the potentialto profoundly transform the scientific as wellas the world econom ic
m ap: the atlas. O nly one ofwhich is the w here ofscience which is what the A tlas of
Ideas project is about. And it’s fairly clear from what the M inister said this m orning
and what Charlie Leadbeater said and what others have said, I think we would allagree
that we don’t know the answer to the where at the m om ent. But I don’t think that we
can actually answer the where untilwe try and address, as part ofthis debate, the other
two fundam entally im portant things that are going on.

The first one is the w hat ofscience, what types ofscience are em erging. I would differ
with Alec Broers in that. Well, I would agree and disagree in equalm easures. There’s
an im portant distinction to m ake between science and technology. I actually think that
science is going to be fundam entally m ore im portant than technology going forward,
but in ways that are underpinned by technology and I’llcom e to that in a m om ent.

So the first ofthese three fundam entally im portant things going on is the where, that’s
the nature ofthis project. The second one, which willbe able to answer the where is
the what ofscience and then the other one is the how ofscience. H ow can new m odels
ofR & D that are needed start to em erge? And it’s the what and the how that will
determ ine the where. These thing willunderpin probably at least the next 25 years of
econom ic growth. I think we’re on the verge ofa quarter ofa century ofscience-based
innovation that willbe at least as im portant as the last 25 years oftechnology-based
innovation.

As a consequence ofthe integration ofcom puting and the other sciences, and m ost
im portantly the life sciences, I think that the work that’s starting to go on in som e labs,
here in Europe, here in the U K , elsewhere, in Japan, in China, has the potentialto
com pletely revolutionise m edicine, our understanding ofthe aetiology ofdisease. The
life sciences could even create entirely new sectors around healthcare that we can
hardly im agine at the m om ent, in the sam e way that we could hardly have im agined 50
or 60 years ago, a Silicon V alley em erging and the m arkets and the sectors that
em erged around the PC industry: sem i-conductors, telecom m unications and allthe
rest ofit.

I think that there’s an im portant side bar to this intersection ofcom puting and the
other sciences because it willbe this intersection ofcom putationalscience, that will
drive the next wave ofinnovation. We’llsee this innovation in healthcare, and it will
also help us create better sources ofenergy.

M ost im portantly, it m ay be the case that technologicalsolutions to these challenges


are not enough. Also what’s needed is a better understanding ofthe nature ofthe
problem – and I don’t think we have a good understanding ofthe nature ofthe
problem that we’re creating on the planet in our consum ption ofenergy and
destruction ofthe planet’s life support system . I think that what’s required is a m uch
better understanding from com putationalm odels that range from clim atology to
biodiversity to population biology and genetics, ofthe dam age that we’re doing to the
system s that we depend upon for our survival.

And I think that there’s an increasing am ount ofevidence to show that we’ve
em barked on a greater m ass destruction oflife on the planet, in geologicaltim e, than
the event that wiped nearly everything out 65 m illion years ago. It should be a worry
for us allthat in the last 100-odd years ofhum an endeavour, we’ve created this
situation. And it’s not clear to m e, or to the rest ofthe scientific com m unity, that the
solution is a technologicalsolution. It m ay be that we just have to use less resources.

But untilwe can underpin the nature ofthe problem that we’ve created with
fundam entally new kinds ofscience that can be presented as an unequivocally
com pelling case to policy m akers, I don’t think that we’re going to get very far. So I
think the point I’m trying to m ake there is that prosperity m ight not necessarily be
underpinned by econom ic growth, but m ore im portantly, by som e m echanism s that
present serious deleterious effects to econom ic prosperity to do with environm ental
disasters.

The other thing that I think willbe fundam entally im portant is the how ofthese new
kinds ofscience. I think as a consequence ofthese new kinds ofsciences em erging, and
a good exam ple is the m apping ofthe hum an genom e which was a trium ph of
com puting as m uch as a trium ph ofbiology. It sim ply wouldn’t have been possible ifit
hadn’t been for som e fairly sophisticated com puting power integrated into the process
ofm olecular biology. And that’s just the first step, I think, we’re onto proteom ics and
m etabolom ics and a whole range ofother things that are far m ore difficult challenges
to solve.

So wrapped around allthese new kinds ofscience is the how ofscience. As a


consequence ofthese new kinds ofscience, what im pact willthey have on the life
sciences, on energy and such like. What was once called blue sky research or basic
research is going to be m uch m ore com pressed over the next few decades. And I think
that, oddly enough, this is com ing at a tim e, as Alec Broers m entioned, when corporate
research labs are in term inaldecline, at a tim e when basic research is probably far
m ore im portant than it’s ever been to industry, as the tim e period between what was
called basic research and technologicalinnovation com presses.

What that really requires is a fundam entalrethink by both industry, governm ent and
academ ia about how they work together. I don’t think anyone’s got the answers to
what the idealm odelis. We’ve em barked on what is a fairly large experim ent,
ourselves, in som ething that M icrosoft has joined, which is called the European
Science Initiative. This is a big endeavour for M icrosoft R esearch, which is to kind of
lead and pioneer som e ofthese new kinds ofscience, through new kinds ofpublic
private partnerships. And so far it’s proving quite successful. It’s only just started, but
it is fundam entally im portant for us and I think for the U K and Europe to have a fresh
set ofthinking, certainly policy thinking, around significant public private
partnerships between industry and governm ent and academ ia.
I think that the how also requires us to kind ofthink about the new kinds ofscientists
that we need to train, for these new kinds ofscience. It willbe whoever pioneers the
training ofthese new kinds ofscientists because we’ve spent a lot oftim e this m orning
talking about India having x num ber ofengineers and technologists and China having
x num ber ofthousands. But it really willbe these new kinds ofscientists pioneering
these new kinds ofscience that willunderpin the next big waves ofinnovation in
m edicine, life sciences, energy.

And the U K actually has the opportunity to train those new kinds ofscientist. It
requires som e urgent thinking about how we’re educating today’s 11 and 12 year olds,
but it can be done and we can in the U K can lead these new kinds ofscience ifwe’re
able to. So that’s it from m e.

Jam es W ilsdon
Stephen, thank you. N ext up, we’re going to hear another Stephen – Stephen M inger –
who is D irector ofthe Stem CellBiology at the Wolfson Centre for Age-R elated
D isorders at K ing's College London. Stephen was also one ofthe authors ofa very
interesting D TI G lobalwatch study which cam e out a few m onths ago looking
com paratively at stem cellresearch in China, South K orea and Singapore, which
sparked a fair bit ofcoverage. So, Stephen… .

D r Step hen M inger, D irector, Stem Cell B iology Laboratory, W olfson Centre
for Age Related D iseases, K ings College London
Thank you, Jam es. M y com m ents willbe m uch less erudite than m y previous
colleagues and probably a little bit closer to the ground. What I want to address is
really what I perceive to be the state ofplay in the Far East and India, particularly
related to regenerative m edicine and stem cellbiology. I’m a U S-trained scientist. I
trained in som e ofthe best-funded labs in the U S, and I cam e to the U K about ten
years ago, not to pursue stem cellresearch but because I wanted to live in Europe. And
obviously I’ve benefited greatly from being in the U K which has a very tight regulatory
policy around stem cellresearch, but one which is scientifically very perm issive and
enlightened.

I’ve worked on stem cells for going on 15 years now and particularly over the last three
or four years, I’ve been fortunate enough, as Jam es just alluded to, to have travelled
extensively for the D TI and the R oyalSociety and to have assessed stem cell
technologies and regenerative m edicine in the U S, Canada, Scandinavia, China,
Singapore, South K orea.

I’ve been on a R oyalSociety ten day workshop m ission to India and m ost recently
attended a stem cellm eeting in M um bai about a m onth ago. What I’m im pressed with
is the drive and com m itm ent that we’ve seen m ost notably in China and South K orea.
Singapore we knew had lots ofm oney to put into basic science, particularly in term s of
regenerative m edicine, but ofthe three countries that we visited on our Far East trip, I
think m y colleagues and I were m ost im pressed with China and probably even m ore so
with South K orea. I don’t think it’s debated that currently South K orea leads the world
in stem celltechnology. The South K orean governm ent has invested huge sum s in the
stem cellcentre in Seouland m ore particularly in Professor Wang’s group. It’s the only
group in the world who have successfully cloned a hum an cellline at the m om ent, and
South K orea’s certainly generated m ore celllines and probably has m ore funding in
stem cellresearch than any other country in the world. Probably even including the
U S, because allthe m oney that’s supposed to be com ing out ofCalifornia seem s to be
nowhere to be seen.

So I think for the U K to retain its role - not dom inant, but certainly to be a player, it’s
going to take m ore com m itted resources from this country. M y good friend, M iodrag
Stojkovic, there was an article in the Telegraph today about how he’s leaving the U K to
go to V alencia because he feels there’s not strong enough com m itm ent here. I disagree
with him . I don’t think that’s actually the case. I think the U K governm ent has been
incredibly supportive ofstem cellresearch in this country. But it pales into
insignificance com pared to countries like South K orea and China.

Y ou go to China and you go into the labs and they are absolutely world class, they have
the best infrastructure ofany labs I’ve seen either here or in the U S. It’s absolutely
stunning. And the governm ent is firm ly com m itted to bringing back a large num ber of
western-trained Chinese scientists, putting them into top notch labs and investing
huge sum s ofm oney in their research. O n the ground, I think the U K is stilla
dom inant player in this field. But I think it’s going to take sustained long term
investm ent to com pete with what we’ve seen in the Far East. India is further behind
but there certainly is – from the Indian H ealth M inistry and from the M inistry of
Science – a com m itm ent to m aking India a world leader in this field as well. And I
have no doubt in a few years’ tim e they willbe up there with everyone else. So with
that, I’llstop. Thank you.

Jam es W ilsdon
Stephen, thank you. And our finalspeaker is Linda Y ueh who is an expert in the
Chinese econom y, and a Fellow both at LSE and at O xford. Linda.

D r Linda Y ueh, Fellow in Econom ics at Pem broke College, O xford


U niversity, and M Sc Tutor at the D ep artm ent of Econom ics, LSE
Thank you, Jam es. As the finalspeaker, I feelI need to raise m ore questions than
answers to stim ulate a bit ofa discussion from the audience, so please don’t disappoint
m e. And it also m akes m y task easier because I can sim ply tellyou what we don’t
know, and then raise questions which is what academ ics tend to do.

So with that, what I’ve been asked to do is to say just a few words, I think Jam es
described it as a reality check, about China’s place in the new geography ofscience. But
I have to say, m y background is I’m an econom ics lecturer and I used to be a corporate
lawyer who worked with com panies investing globally. I’llraise som e ofthe topics and
then I hope we do have a discussion to try to contextualise som e ofthese concepts and
a little bit about what we don’t know, what we do know and what we’d like to know
and what I hope the D em os project can bring to light for allofus.
So with that, let m e start with the big globaleconom ic picture, and talk a little bit
about globalisation and what that m eans for the spread oftechnologies and science.
I’m going to focus a bit on China’s growth prospects, what it’s doing, what the
evidence is, how is it trying to stim ulate its growth and the im plications that has for
the wider globaleconom y, including for the U K .

I won’t bore you with the why globalisation is so im portant and the establishm ent of
the World Trade O rganisation and allthose things. I’llsim ply say that in the post-war
period, we’ve seen astounding rates ofgrowth. Taken as a whole, the post-war period
has seen globaleconom ic growth ofabout 3.8% each year. N ow, internationaltrade
has grown at over 9%, and so you sort ofwork that out ifyou can bear the num bers.

G lobalisation is im portant today and that’s why when we do see allthe products that
have com e from these countries, and the students and the scholarships and allthe
inform ation that we get, this is why we are so m uch m ore inter-linked today than
before. It’s also why concepts which I think non-econom ists find very esoteric, like
com parative advantage, and m oving ofthe value chain, have becom e im portant. I will
define those at the end ofm y talk.

China’s econom ic growth: the reality check. China’s growth has been astounding –
over 9% per annum . Statistics never m ean m uch unless you have som e context. What
that m eans is that G D P in China has doubled approxim ately every eight years. So if
you think about the G D P ofa country doubling every eight years, this is why sm all
changes and com pound growth rates m ean so m uch to a country and why we panic
over sm allchanges in growth rates. So that’s why we have seen this astounding growth
ofChina: a $1.4 trillion econom y, doubling every eight years, 1.3 billion people, 20% of
the world’s population. It is a significant em erging power.

O fcourse, how it’s been achieved has always been a bit ofa m ystery. I’ve spent years
looking at it and it’s stilla bit ofa m ystery. But I’lltellyou what we know, which is that
a lot ofChina’s growth has been achieved by productivity advances via factor
reorientation. So factor accum ulation, things like having fem ale workforce
participation was one ofthe driving forces ofgrowth in the O ECD countries in the
post-war period. China now has high rates oflabour m arket participation and it has
industrialised. These factors generate productivity gains, and this has been a driver of
China’s growth, rather than technologicalprogress clearly m easured by things like
breakthrough technologies, which push up the efficiency ofthe factors that we use.

So m ost ofthe evidence, although it’s a bit sketchy because it’s difficult to estim ate
these things, is that China has grown not so m uch by technologicaladvancem ent –
although there is som e – but prim arily because it is a poor country and it’s growing by
factor reorientation.

What is China trying to do in order to sustain its rate ofgrowth? I think this is where
the science and technology issues really com e in. D eveloping countries can grow in
two ways. O ne is by catching up and this is a concept by which it im itates or adopts
existing technology, so it need not reinvent the wheel, And ofcourse, the other way
you can do it is sim ply to invest in dom estic com petitiveness, dom estic innovation.

I recently gave a paper in China about different ways ofusing R & D , how to fund it
using tax credits and subsidies and the advantages and disadvantages ofthose. N ow,
when we think about a developing country, m any struggle to get the kind offoreign
direct investm ent (FD I) that has any significant technologicalcom ponent and I think
this is what m akes China and India stand out so m uch.

The policy in China for targeting high technology FD I started in the m id-1990s. China
was a pretty m uch closed econom y until1992 when the open door policy took off–
when D eng X ioping m ade his fam ous southern tour to G uangdong and Fujian and
said, it is glorious to be rich. The next thing you knew, China was a m uch m ore open
econom y and FD I shot up and trade shot up and exports have been growing at 17%
per annum on average for about a dozen years.

But when it opened up in the early 1990s, what China m anaged to do was to attract
low technology FD I, intending to use its low-cost labour to produce things like textiles
and clothing and shoes. In 1995, the governm ent took a decision to create what are
known as high technology developm ent zones, which now exist in allbut three
provinces. These are three-in-one system s. They are science or industrialparks
intended to bring together R & D facilities with som e type ofuniversity or research lab,
with m anufacturing capacity and with m arketing. They were intended to translate
science and technologicalinnovation into industrialoutput. This is what they’ve done
since the m id-1990s, and there has been a huge surge in foreign direct investm ent in
China since that tim e.

China also has a high degree ofhum an capital. It graduates alm ost three m illion
graduates a year, 60% ofwhich are in science and engineering. N ow, ofcourse, this is
partly a legacy ofthe centrally planned period, where science was very im portant
because we allhad to get to the m oon first. So there are obviously contextualissues in
how we view this, but there’s no doubt there’s a lot ofscientific personnelin China,
coupled with the fact they have a way ofattracting higher leveltechnologies through
these industrialparks. These are intended to create network externalities, and spill
over effects from having a lot ofinnovative people in a com m on area – like Silicon
V alley or Silicon G len.

So this is partly why they have been attracting so m uch FD I, and ofcourse, this is
where the picture gets increasingly m urky. The evidence is very sketchy on how m uch
technologicalspillover has com e from FD I, how m uch ofthe technology can be
im itated. We think it’s a lot because m ore than 50% ofChina’s exports are produced
by foreign investor enterprises and it’s over 80% in som e high tech sectors. So that
would suggest a high degree offoreign advanced technology going into China.

D oes this translate into dom estic productivity? Is there any evidence ofspillover from
foreign know-how into dom estic know-how? The evidence suggests that Chinese
investm ent is stillthe m ain driver, not very dissim ilar to other countries. For a lot of
developing countries, this is a cause ofworry. IfChina, the leading destination of
globalFD I, is unable to generate a lot ofspillover, what hope is there for the rest ofthe
developing world to catch up?

Let m e conclude by saying that when we think about what this actually m eans in term s
ofthe future ofinnovation, because ofthe Chinese stock ofcapital, its ability to attract
FD I and the fact that there is so m uch globalisation, I’ve only focussed on econom ic
growth as it relates to science and technology. But when we think about where
com petition is good and where cooperation is good, it would be good to distinguish,
for instance, between what is a public good and what is a non-public good. So things
like the environm ent tend to be a public good, where cooperation and sharing
technologies willreduce the externalities associated with private consum ption. Things
like private goods have tended to stim ulate com petitiveness. N obody wants to be left
behind on the value chain. Everybody wants to be in the higher value added sector and
there is space for that, but it does require quality and product differentiation ofa
different sort than just com peting on cost. So that’s one ofthe things to keep in m ind –
the theory ofcom parative advantage.

The standard theory says, ifthey can produce everything cheaper and they’re
innovative in m edium to high technology goods, how could we possibly com pete?
Well, econom ists say trade is good because the pie gets bigger. But the question for
countries like the U K is how to stim ulate com petitiveness in the higher value-added
part ofthe value chain, because com parative value does not tellyou where one should
target one’s resources: to support the technologicaland scientific research that’s
needed, to help com panies m ove up the value chain, and to educate the people needed
to run these com panies. I’llconclude with repeating that trade is good and we should
trade m ore. Ifthe pie’s bigger, we willallbenefit, so long as we can m anage the process
ofglobalisation. Thank you for your attention.

Jam es W ilsdon
Linda, thank you. WellI’m not sure it’s ever good to give the last word to an
econom ist. Please chip in with questions targeted at individualspeakers, or com m ents
that you think we should take on board as we get underway with the project.

Christop her Cullen


I’m the D irector ofthe N eedham R esearch Institute in Cam bridge, where we do
research into the history ofscience and technology in East Asia. It’s from a historical
point ofview that I want to propose som ething for this discussion. I was very pleased
by the last few words ofthe last speaker, what she said about the pie getting bigger. It
seem ed to m e there was a hint offear in som e ofthe politicaldiscourse that we heard
earlier today – a stress on the notion ofcom petition, and a certain fear behind that.
What willhappen to us ifChina and India succeed in doing what we’ve been doing? Is
there a threat there? But don’t worry, perhaps they’re not really ever going to be able to
do what we do, so perhaps we can relax a bit.
I deliberately caricature because it seem s to m e that it’s im portant to realise the
strength ofthat position in people’s m inds when they think about the industrialisation
ofIndia and China. Is it not the case though that ifyou look back on a previous
exam ple ofthis phenom enon, on another place becom ing scientifically and
industrially productive, you can see som ething m uch m ore hopeful? What ifBritain in
1890 had looked to the U nited States and said, m y G od, what’s going to happen when
the U nited States is as scientifically and industrially productive as we are?

Is it not the case that we need to seek the opportunity presented by the
industrialisation and scientific creativity ofChina and India com ing on stream as an
im m ensely beneficialthing we should just try to prom ote in our pure self-interest?

John B ibby
I am from the D epartm ent ofM athem atics at the U niversity ofY ork. A couple of
questions: the first relating to supply side dynam ics. O ne ofthe reasons for this new
geography ofscience is because ofthe wage advantage in China and India. This will
not always stay the sam e. As wages rise, and as currency rates change, this differential
willbe lost and I’m wondering whether, in perhaps 20 years tim e, we’llbe talking
about the China-India bubble in just the sam e way as earlier speakers were talking
about the Japan bubble. A second question is on the dem and side. We’ve been looking
exclusively at inhabitants ofChina and India as producers, but where is the dem and
side analysis? What is the im pact oftheir role as consum ers?

Carl Schneider
CarlSchneider, executive editor ofN ew Scientist. Som ething I’ve not heard m entioned
so far is the fact that a big slice ofthe Chinese politicalleadership are either engineers
or scientists them selves. Ifyou look at the backgrounds ofthe top twenty or so leaders,
it reads engineer, engineer, engineer, physicist, engineer, engineer, engineer, chem ist
and so on. What significance do people think this has, ifany, and secondly, what
im pact has it had, and willit have, on Chinese developm ent and the growth ofscience?
I would be particularly interested to hear what Linda has to say on that.

D avid G rayson
I want to pick up the fourth ofthese strands which you have in the outline ofthe
research project, about the link between science, ethics and sustainable developm ent.
H ave you thought about an em phasis on research into clim ate change and other
aspects ofsustainability as being one ofthe things that m ight m ake the U K m ore
attractive as a long term partner for China, India and K orea? I would be interested to
know from other panelm em bers whether they think this is true. And ifit is, what
m ore could we be doing in term s ofsetting a forward agenda around clim ate change,
that would help to project the U K as having that distinctive interest and therefore
potentially being a m ore attractive long term partner than som e ofthe other advanced
industrialised countries?
Jon Agar
I lecture on the history of20th century science at Cam bridge. It’s strange, I heard the
sam e talks as Christopher did, and I heard m ore reference to collaboration and
cooperation than I did to threat, although I don’t deny that undertones ofthreat were
there. But it did get m e thinking that one ofthe m ajor dynam ics ofthe last 60 years
was conflict. It was the Cold War dynam ic which produced m any ofthe gigantic
projects which Lord Broers rem em bers from his youth. Whether or not we are being
overly optim istic, I’d like to hope that the future is one ofcollaboration and
cooperation But I’d like to hear the panel’s view as to whether there’s room for a m ore
pessim istic, perhaps m ore realistic view? After all, we do see anti-Japanese riots in
China, and there are going to be conflicts over Taiwan. What are the geo-politics ofthe
next 50 years ofscience and technology going to be like alongside the hoped for
collaboration and cooperative networks?

Jam es W ilsdon
O K , thank you. We’llcom e back to the panel. Ifyou could each take one or two of
those questions. We’llstart with Fiona.

Fiona Clouder-Richards
Thank you, Jam es. A huge range oftopics covered in those questions, but first ofall, to
the one about com petition versus collaboration. We cannot afford to ignore China and
India and other nations com ing up on the horizon, but I hope that our m indset is
m oving away from that – that we’re looking forward to this as a partnership ofm utual
benefit that we have to capitalise on in both directions. I think that’s certainly what
we’re thinking across governm ent.

There was also a question about how willthis feed into our future strategy for
engagem ent and I think again this is m ulti-dim ensional. It is about feeding into our
strategy in term s ofim m ediate internationalrelationships. And it’s feeding m ore
broadly into those politicalpartnerships and wider foreign policy issues. It’s also about
understanding how different countries are developing their policy fram eworks and
how this should influence our science and innovation investm ent strategy in the U K .

O ne point that didn’t com e out is about ‘Chindia’. We’re talking very generally, very
collectively, in today’s session about China, India and other countries and I hope this
project is going to focus down m ore selectively on particular regions and hubs within
those countries, because they are not an am orphous m ass, We need to understand
m uch m ore selectively what’s going on in each ofthose hubs and how we can
optim ally engage.

A point was also m ade about the significance ofthe scientific leadership in these
countries and I think this is very im portant, and one ofthe reasons why science is so
crucialto internationalrelations and foreign policy. M any ofthese countries do have a
very different m ake up in their politicalleadership (although I’m delighted to see on
this panelat least we have the son ofa scientist as one ofour M Ps!). We have to build
collaborative relationships that are an investm ent for the future in term s ofour
influence on the leadership ofthese countries.

In term s ofprojecting the U K , perhaps there’s som e m isunderstanding about what I


said. I was talking about the science ofclim ate change, for exam ple, as a wider foreign
policy issue. What we’re trying to do through our Partners in Science initiative in
China, is to focus across som e high priority areas like e-science, food safety,
nanotechnology, to look at how we can build interactions for m utualbenefit.

And finally a point which was m ade on science and society and ethicalengagem ent, I
think that’s another area where we can exchange m odels ofhow we’ve approached
these issues in the U K . For exam ple, creating a very strong ethicaland regulatory
fram ework that allows Stephen M inger’s research on stem cells to proceed. We need to
build m utualunderstanding with other countries on these sensitive issues so that we
can ensure that the research we deliver ultim ately serves the wider public good and is
acceptable to society. Thank you.

Ed B alls M P
I was struck, first ofall, by the question about politicalleadership and science, and I
was thinking whether the right thing to do is to have scientists as your politicalleaders
– whether the Chinese have got that right. The period when we had a scientist as our
Prim e M inister, between 1979 and 1990, was probably the period in which science was
least invested in and when we allowed our science base to erode. Since 1997, we’ve had
a lawyer as Prim e M inister and a historian as Chancellor, and m aybe that is a better
way to go than to have scientists running things.

That’s alla bit glib. The realdifference between Britain and Am erica is that, although
we think ofAm erica as being a free m arket open econom y, it’s always had a far m ore
collaborative and strategic view ofeconom ic developm ent than the U K . Ifyou go to
any U S university, or to any U S state, and you ask about econom ic developm ent, the
im portance ofpublic private collaboration, industry policy and science policy, they are
far m ore advanced than in the U K . I m ean M IT is a good exam ple ofthat but there are
very m any other exam ples as well.

I think in a way the Chinese understood from Am erica rather than from Britain that if
you wanted to have a m arket econom y, the right kind ofm arket econom y was one
which was based upon collaboration and strategic econom ic developm ent, rather than
sim ply liberalisation. The big change which is happening in Britain now isn’t sim ply
reversing that underfunding. By the end ofthis spending review period, British public
spending on science willbe twice the levelthat it was in 1997. It’s not sim ply about
resources, it’s a m uch m ore intensive view ofpublic private collaboration around
science, research and developm ent and technologicalinnovation. The Lam bert R eview
was allabout how within the regions we can have m uch closer working between
business and the public sector in science. As I said, in Britain we’re catching up with
Am erica and China in understanding how to go about that.
That’s why we have a catch up issue and you have to understand why senior politicians
talk about com petition, com petitiveness, challenge. The gentlem an there was saying
he’s concerned about that. It’s not because it’s a zero sum gam e and com petition is the
language ofconflict. It’s actually m uch m ore to do with m otivating people not to be
com placent. The problem in Britain over the last 20 or 30 years hasn’t been that we’ve
had too few scientists in public policy, or too m any lawyers or a particular party in
power, or that we haven’t been focussing enough on the com petitive threat. It’s that for
quite a long tim e we’ve been com placent, and the reason why this project is im portant,
the reason why relationships between science and innovation, business and
governm ent in Britain are changing for the better, is because we are challenging that
com placency. We are trying to take a m ore strategic view ofwhat needs to be done in
Britain ifwe are to continue to be up there with the world’s best in term s ofeconom ic
prosperity, quality oflife and scientific and technologicaldevelopm ent.

Lord B roers
Well, a fascinating set ofquestions and com m ents. I’lljust start briefly with the pie
getting larger. I really hope this is true. O n the other hand, having been in com petitive
industry for m ore tim e than m ost, I think the com m ent about being Panglossian m ay
be correct here. As the pie gets bigger and the adjustm ent com es, as salaries begin to
com e up, the win-win situation m ay deteriorate a little. Because at the m om ent, you
know, large com panies are very happy to have low cost and skilled labour and
innovation com ing free. But in the end the situation willchange and the com petition
willincrease and ifD etroit runs into absolutely m assive unem ploym ent, it m ay not be
easy politically to handle. So I just hope that collaboration can go on and the pie can
go on getting bigger, but we do have to worry and look for indicators.

I have to com m ent about engineers and scientists, because ofcourse China is about
80%, 90% engineers. We m ight look at France as well, France trains its leaders as
engineers so where do we allget as a result ofthat? Well, there’s jolly good food in
both places, which perhaps has nothing to do with any ofit. But perhaps what is
consoling from the China point ofview is look at France, they have a better situation
with energy generation than anybody on the planet. They’ve sorted their transport a
hellofa lot better than we have. Adm ittedly they have a bit m ore space. Energy and
transport are going to be absolutely crucialto China and India, so having a lot of
engineers around is probably a great help there.

I’m just going to finish not by trying to suppress any disagreem ent that Stephen and I
m ight have, because I really don’t think we’ve got any. When I talk about the
im portance oftechnology I’m just trying to get the right balance. O fcourse science is
absolutely crucial, and it’s the origin ofthings, but once you’ve got the science, you’re
going to need ten tim es the effort, ifnot a hundred tim es the effort, to take that science
and give it to you as a citizen so you can benefit from it. That ratio in m ost ofthe
technologies ofthe 20th century, was ten, even 100 tim es to one. By the tim e you’ve
learned to m anufacture, take the science, m odify it so that it’s useful, there’s a vast
resource and I have this worry in this country is that we stilldon’t quite understand
those ratios. O fcourse we m ust have the science but ifwe don’t have the rest then
you’re not going to benefit from it as a citizen.

Professor Step hen Em m ott


Collaboration’s been m entioned quite a bit, so I’llm aybe talk about that one. Scientists
do collaborate with each other. I work with scientists in China and Japan, Italy, France,
the U S. So scientific collaboration is a very long standing thing, and scientific
knowledge has traditionally been open through publications. Even ifyou look at the
EU fram ework program m es, you couldn’t really deny that’s collaboration, yet I would
probably say it’s forced collaboration. But what has that produced? I look at FP5, FP6
and the things that went before, and they didn’t really produce that m uch and I don’t
think FP7’s going to be that m uch different. So collaboration occurs, but there’s not
always m uch to show for it.

Ifyou’re Astrazeneca or G laxoSm ithK line you’re not going to want to collaborate with
each other ifit’s near a product line. That said I think it’s quite likely that we probably
willend up collaborating with people like G laxoSm ithK line and Astrazeneca on som e
basic m odelling ofbiologicalprocesses where we can bring som e com puter science to
it and they can bring som e ofthe life sciences elem ent to it. I think the point I’m trying
to m ake in m y ram bling way is that we need to define what collaboration would m ean.
What we need is to rethink public private partnerships, specifically in the U K and in
Europe. I would com pletely rethink the EU fram ework project for a start. And in the
U K , som e ofthe things that the Chancellor has been talking about in the ten year
science and innovation fram ework, show som e positive signs ofa receptiveness to
rethink public private partnerships, which is a very good thing.

I want to tackle som ething that I think I heard Ed Balls say, which was in the U S the
reason why science and technology has been successfulis because ofcollaboration and
links with industry. H e m entioned M IT as a good exam ple ofthat. But as far as I can
see, two things really underpinned the U S, and to a large extent the world econom y for
the last 25 years. Both cam e out ofthe U S and were not collaborations. O ne was the
evolution ofarpanet into darpanet and then into the internet, which was funded by the
N ationalScience Foundation and D AR PA, and it’s im portant to acknowledge the
im portance ofbasic science and infrastructure, and the im pact that can have.

The other one was the invention ofthe transistor, which equally wasn’t a
collaboration. I was fortunate enough to work in the sam e laboratory in BellLabs that
Bardeen, Brattain and Shockley worked in, and had access to their diaries. It really was
fundam entalscience they were working on, and the im pact ofsem i-conductors that
their work underpinned has transform ed the entire way we live. But that wasn’t a
collaboration, and indeed ifyou look at the Bardeen, Brattain and Shockley diaries
they alm ost closed that work down because BellLabs didn’t see a point to it. And then
when they did actually invent som ething, BellLabs virtually gave the patent away,
which was a good thing in fact, eventually, but could have been very valuable to Bell
Labs. So I think need to be carefulabout this whole collaboration, by defining what we
m ean by things like public private partnerships and collaborations at different levels.
D r Step hen M inger
I’llbriefly address collaboration as well, because this is som ething that’s com e up in
our interactions in China and South K orea and India with academ ic scientists. In
India, in particular, at the m eeting in M um bai where we sat and talked about what
would be required for India to becom e a dom inant leader in regenerative m edicine,
m oney wasn’t the issue. It was really the quality oftrained people.

And so, together with the R oyalSociety, we’re trying very hard to im plem ent strategies
whereby prom ising young Indian graduate students or post docs can com e to your lab
in the U K and benefit from the fact that we’ve had three, alm ost four years now of
access to hum an em bryonic stem celllines and regenerative m edicine techniques. I
already have two senior Indian scientists who want to com e and spend six m onths and
four m onths respectively in m y lab, and that willhappen m ore and m ore often. There
seem s to be a big im petus for this, the British governm ent is putting m oney into
studentships, which are restricted to students from outside the west, so I have a young
Indian m edic in m y lab doing a PhD . These kinds ofthings are collaborative, but
they’re m ore training and the idea is the students willthen go back to their hom e
countries and bring back that expertise.

And som ething we really haven’t talked about in term s ofscience and ethics. O ne of
the things that we were really concerned about when we went to the Far East and spent
over a week in Beijing, Shanghai, Tianjan, alm ost a week in Singapore and severaldays
in South K orea, was the ethicalfram ework, particularly related to stem celltechnology.
Before we went our idea was, particularly in China, that the ethicalfram ework would
be very loose. We were very surprised to find that in m any respects it m irrored what
exists here in the U K , in term s ofinform ed consent, using em bryos that are surplus to
IV F, not just wholesale creation ofem bryos for the purposes ofm aking stem cells.

But one area in India and China that is quite different is clinicaltranslation. That is,
how do we take these technologies to the clinic. H ere in Europe the regulations about
taking cell-based therapies to patients are going to be very, very tight. In both India
and China there’s m ore clinicalim perative, and potentialtherapies seem to be
translated m uch m ore quickly and probably with less pre-clinicaland clinicaltrial
data. So, for instance, bone m arrow transplantation into heart m uscles, which is stilla
relatively unproven therapy, seem s to be in India alm ost standard clinicalprocedure.

In China, they rarely do double blinded clinicalcontroltrials because there is an


ethicalbias against. It is seen as im m oralto withhold treatm ent from one group of
patients and give it to another, and so there is a great reluctance to do the kind of
clinicalcontroltrials we do here. Ifyou look in last week’s N ature, there is an interview
with a Chinese surgeon who is doing stem celltransplantation into patients with spinal
cord injury, and he thinks he’s being com pletely dissed by the West because he’s not
doing controlstudies. H e feels that his therapies work and therefore he should treat
every patient that com es into his clinic, rather than withhold that treatm ent. So I think
in term s ofscience and ethics we have to be very carefulto m ake sure that we’re not
being culturally elitist, and that we’re sensitive to differences in term s ofethics.
D r Linda Y ueh
I’lljust touch on a few questions. The first was about the undertone ofpoliticalfear,
which I thought was a very good point, and the undertone ofnot being realistic
enough about geopolitics. I think both are true. To think there willbe no geopolitical
conflict, over things like energy, is unrealistic. H owever, the sym pathies that we extend
to those stuck in structuraladjustm ent has to be sincere, because I think that often it is
the insincerity about what econom ic transform ation m eans for allofus that generates
that uncertainty. So I do think there is a space for that especially because hum an
capitalis so im portant to preserve.

To the com m ent about Chinese leaders being engineers. In the centrally planned
period, there was a heavy em phasis on science, to a large extent to the neglect ofsocial
sciences and hum anities. So this generation, the H u team , are indeed dom inated by
engineers. I think it’s a legacy ofthe period from which they cam e and the Cultural
R evolution and what they experienced. According to m y colleagues who are politics
specialists, there is a change in the Chinese leadership away from ideology and towards
defining legitim acy by im proving econom ic developm ent. And so they are looking
m ore like a standard politicalparty which wishes to stay in power. But ofcourse there
is a brutaldownside to the Chinese regim e, which we cannot discount.

To the question about supply side and dem and side factories in the globaleconom y,
China and India willeventually lose their advantage, but it willbe som e tim e yet
because G D P per capita is less than U S $1000 in India and just over that for China.
When this changes, ofcourse, the question is, are they positioned to m ove up the value
chain? The fast-growing sectors are sectors in which there have been strategic
investm ents in technologicaladvancem ent. O fcourse, this is different for India than
for China. But how likely are they to be successfulwhen G D P per capita reaches
$10,000? This willnot happen in the next even 20-30 years. China willhave a G D P of
just $3000 in 2010 ifit continues to grow at 8 or 9%, and that's only the level, the
m edium leveldeveloped country com pared to $38,000 in the U nited States.

So there willbe som e tim e yet before we see this. It's very hard to increase the rate of
growth in an econom y. Countries would like to diversify their exports but they sim ply
can't, and that is som ething that China has done well. O n the dem and side, ofcourse,
yes, China produces a lot and it potentially could consum e a lot, with im port
restrictions com ing away as the WTO accession term s kick in. China has contributed
about 20% to globalincrem entalgrowth in the past few years. As it begins to take its
place as a globalconsum er, I think we willhave to look at it m ore seriously. Well, we
already take it quite seriously. N o-one really called m e to speak on China when I was
doing this seven years ago. And now everybody is interested, so I do think there is a
shift in the way that China's im pact has been felt.

And I'm just going to conclude with what this m eans for the U K . Are we doing what
we should do to m ove up the value chain? A very, very hard question. I think the
generalprinciples from econom ics are there, that basic research has to be supported by
the state, including hum an capital. So allthe basic infrastructure for science does have
to be there. But the question is, countries don't trade, it's com panies that trade.
Countries can only innovate to an extent, it's com panies that innovate. So what kind of
policies prom ote innovation, entrepreneurship, and can they pick sectors? That is why
the East Asian m iracle was m iraculous, I think, because the East Asian tiger econom ies
picked nationalcham pions and rode on the back ofthe electronics revolution
throughout the 70s and 80s.

Is there som ething com parable that can be done? V ery difficult to say as we m ove into
a knowledge econom y where G D P in the U K is 75% determ ined by services. What
does it m ean to m ove up the value chain in the U K ? Wellthe good news, ofcourse, is
that export ofservices is growing very quickly. But what about industrialoutput,
which is only 15% ofG D P? Where are the intersections between that sector and the
services sector? So finally, should the U K work to prom ote technology in relation to
clim ate change and sustainable developm ent? Y es, absolutely. We'd alllike to live in a
world which is not just prosperous, but has clean air. I don't know m uch about this
area, but I'm a big supporter ofit. Thank you.

Jam es W ilsdon
G reat, wellwe're out oftim e, I'm afraid, but please do stay and continue the discussion
over lunch. A word on where we go next with allofthis. We've certainly found today
very usefulin helping to sharpen the questions we want to ask. The project team at
D em os willbe spending the next year trying to fillin as m any ofthese knowledge gaps
as we can. A lot ofthat tim e willbe spent in the three countries under discussion, but
we are also keen to talk to and engage with experts and others here in the U K who
have usefulperspectives to feed in.

So ifthere are questions you think we haven't yet asked and should be asking, or
people we should be talking to, please do grab m e or one ofthe other D em os
researchers afterwards and stay in touch. We're also running a series ofsm aller, m ore
focused sem inars through the project, the first ofwhich is on 13th D ecem ber. There
are details ofthis in your packs.

So let m e end just by thanking allofyou for com ing, by thanking again our partners
and funders. And particularly our speakers in this session: Fiona Clouder-R ichards, Ed
Balls, Alec Broer, Stephen Em m ott, Stephen M inger and Linda Y ueh. Thank you all
very m uch.
A b o u t D em o s

W ho w e are
D em os is the think tank for everyday dem ocracy. We believe everyone should be able
to m ake personalchoices in their daily lives that contribute to the com m on good. O ur
aim is to put this idea into practice by working with organisations in ways that m ake
them m ore effective and legitim ate.

W hat w e w ork on
We focus on six areas: public services;science and technology;cities and public space;
people and com m unities;arts and culture;and globalsecurity.

W ho w e w ork w ith
O ur partners include policy-m akers, com panies, public service providers and social
entrepreneurs. D em os is not linked to any party but we work with politicians across
politicaldivides. O ur internationalnetwork – which extends across eastern Europe,
Scandinavia, Australia, Brazil, India and China – provides a globalperspective and
enables us to work across borders.

H ow w e w ork
D em os knows the im portance oflearning from experience. We test and im prove our
ideas in practice by working with people who can m ake change happen.
O ur collaborative approach m eans that our partners share in the creation and
ownership ofnew ideas.

W hat w e offer
We analyse socialand politicalchange, which we connect to innovation and learning
in organisations. We help our partners show thought leadership and respond to
em erging policy challenges.

H ow w e com m unicate
As an independent voice, we can create debates that lead to realchange. We use
the m edia, public events, workshops and publications to com m unicate our ideas. All
our books can be downloaded free from www.dem os.co.uk

C o n tact u s

Fo r m o re in fo rm atio n o r to g et in vo lved w ith The Atlas of Ideas p ro ject,


p lease co n tact Jam es W ilsd o n (jam es.w ilsd o n @ d em o s.co .u k)