1. Innovation Presentation to Digital Content Industries 29 th September 2004 David Hughes FREng Director General Innovation Group, DTI Competing in the Global Economy: The Innovation Challenge

2. Innovation Our world is changing Healthcare in an Aging Society Global Security Intelligent & Connected World Our impact on the Environment Technology: Driver & Solution

3. Innovation Dramatic Change in Life Cycle Conventional Volume Intro- duction Ramp-up Maturity End of life Development Dramatic end of life Shorter time to market Fast ramp-up Demand fluctuation Higher peak New Digital Consumer 3-5 years 1 year Source: Dr Tsugio Makimoto - Hitachi/Sony

4. Innovation Source: US Department of Labor Increasing intensity of global competition 0 5 10 15 20 UKHong Kong SARTaiwan Hourly compensation costs, 2001, for production workers in manufacturing in US dollars

5. Innovation The economic message  UK Businesses will only achieve long-term success in global markets by focusing on greater value added as their competitive edge.  Innovation is the key to achieving this.  And Businesses need to keep innovating to stay ahead of the competition.

6. Innovation Government strategy - The Innovation Report ‘ Competing in the global economy – the innovation challenge’ Published in December 2004 http://www.dti.gov.uk/innovationreport/index.htm “The challenge... is to create the conditions where all our firms put innovation at the centre of their strategies for the future.” Rt. Hon. Tony Blair, Prime Minister

7. Innovation What can government do to improve innovation performance?  Set an encouraging framework – macroeconomic stability, competition, IP framework, standards.  Strategic investments – science, government R&D, infrastructure.  Support innovative businesses – exploitation of science base, advice, partnerships, access to finance, incentives (e.g. R&D Tax Credit).  Ensure that procurement and regulation create opportunities for innovation – not barriers.  Align efforts at national and regional/Devolved Administrations.

8. Innovation Intellectual Property: Awareness Business Advice Open Days http://www.patent.gov.uk/about/marketing/thinkkit/index.htm

9. Innovation Intellectual Property: Crime and Enforcement Patents Act 2004 2004 Chapter 16 Scoping Study: Report of the Patent Enforcement Project Working Group. - June 16th 2004 ME A Michael Edwards & Associates Consultants in intellectual property management and protection.

10. Innovation SMEs and Entrepreneurship Business Link support for Innovation Upgrading SME management skills Improved support for women’s enterprise “I’ve gained a lot of confidence from all the support I’ve received” Katieca Smith, Partner in Architectural Practice

11. Innovation HEIs/ SET Base Business RDAs Research Councils dti Technology Strategy Research Priorities Culture change needed for better exploitation Science and Industry Councils Business support Higher level SET skills Regional Innovation

12. Innovation New approaches to Procurement £109bn pa goods/services purchased by Government in 2001/2002 Strong Ministerial interest in joined up work across government Capturing Innovation guidance for policymakers Reinvigoration of Small Business Research Initiative underway Joint DoH/DTI seminar on Innovation in the NHS for suppliers and buyers

13. Innovation …… additional boost for technology Competing in the Global Economy – the Innovation Challenge, Dec 2003 Increase Business Demand for New & Emerging Technologies The Technology Strategy & Programme Science & Innovation Investment Framework 2004- 2014, July 2004

14. Innovation Determining Strategic Technology Priorities BUSINESS/USER NETWORKS Sector based networks e.g. IGTs, IAP CBI Chambers of commerce Trade associations SEB NETWORKS Research Council networks Academic groups Professional Institutes RTOs Technology Brokers TECHNOLOGY STRATEGIC PRIORITIES MIXED NETWORKS OGD strategies e.g. MoD, DoH Faraday partnerships Foresight REGIONAL/DEVOLVED ADMINISTRATION NETWORKS Science Industry Councils Networks are fundamental to ensuring that the Technology Strategy reflects the demands and needs of business.

15. Innovation TECHNOLOGYPROGRAMME Collaborative R&D Knowledge Transfer Networks CUSTOMERS BI-ANNUAL CALLS FOR PROPOSALS TECHNOLOGY STRATEGY IDENTIFICATION AND JUSTIFICATION OF TECHNOLOGY PRIORITIES NETWORKS NETWORKS feed into decision making Technology Strategy & Programme

16. Innovation Value added by knowledge based services and Industries G7 comparison, 2000 Per cent of total value added 0 10 20 30 40 50 GermanyUKFranceJapanUSCanada*Italy Finance, insurance, other business services, community, social and personal services Communication services High and medium-high tech Source: OECD The innovation challenge – create value in a knowledge economy …

17. Innovation Source: Creative Industries Economic Estimates, July 2003 Contribution of creative industries % GDP, 2001 0 0.5 1 1.5 2 2.5 3 Software Publishing Radio, TV Design Advertising Architecture Music & arts Video, films Crafts Designer fashion Art, antique Software, computer games and electronic publishing …… the largest of the creative industries

18. Innovation ‘Value added’ Opportunities - Health Care Education for patients using medical devices Medical devices not used correctly Results in little or no benefit from device, maintenance costs, adverse events and negligence claims Training on how to use correctly is needed Opportunity for digital content industries Digital Content ‘Users’

19. Innovation More ‘Value added’ Opportunities Convergence of games/films - Machinima.com E-learning Market - Language-engineering technology Development of next generation broadband - BSG’s new initiative Digital Content ‘Users’

20. Innovation Active involvement of your sector in April competition for funding for Inter-Enterprise Computing Now preparing for the November competition for funding How can you be more engaged in the process? Challenges -- Technology Strategy

21. Innovation Using public procurement to facilitate innovation:  Latest figures show £125bn goods and services procured per year  Around 55% of all spend in the UK on IT services and systems is in the public sector  Best practice guidelines for procuring broadband- type content and applications being drawn up What are the big opportunities for DCI in Government procurement and how can we engage further? Challenges -- Procurement

22. Innovation Measuring our success  Businesses see more value added from goods and services  Economy sees more productivity (e.g. output per hour).  Better public services - - Improved quality of life

23. Innovation Presentation to Digital Content Industries 29 th September 2004 David Hughes FREng Director General Innovation Group, DTI Competing in the Global Economy: The Innovation Challenge