Risk and reward

This is the 11th report from the Business and Enterprise Committee, of the 2008-09 session (HCP 746-I, ISBN 9780215540898) entitled "Risk and reward: sustaining a higher value-added economy". The report seeks to look beyond the current recession and its causes. The report says that despite the real and severe challenges facing the country at present, Britain has a much more successful and innovative economy than is generally recognised, and that it has the potential to build a very successful higher value-added economy.The report also looks at areas where more could be done to foster higher value-added activities, and makes a number of specific and more general recommendations on issues such as encouraging research and development, public procurement, the need for broader definitions of innovation, developing clusters of innovative businesses and the role of universities. It also urges that the route to a higher skilled workforce lies in simplifying the skills system and ensuring that young people properly understand the opportunities in the modern economy. Following Committee visits to well-established clusters of higher value-added activity, the Committee identified six key factors in their success: (1) Skills: the successful centres visited were seen to build on the intellectual capital around them; (2) Ideas: the areas visited had centres of research excellence and many organisations dedicated to ensuring ideas could be successfully commercialised. (3) Networks: ultimately, success owed a great deal to the fact that different parts of the system were connected to one another. Universities and technology transfer organisations collaborated; venture capitalists had links to universities and to local government. (4) Finance: there was ready access to risk capital, and encouragement and help for would-be entrepreneurs. (5) Leadership: this could come from business, from academia, or from the relevant part of government. Often, a variety of organisations worked together, or complemented one another. (6) Culture: it was taken as read that good ideas should be commercialised and accepted that not every initiative or business would succeed - indeed frequent failure was seen as part of the price of success. However, in the Committee's view, the most urgent change is one of culture, and that will be the hardest to bring about. For Volume 2, Oral and Written Evidence (see ISBN 9780215540874).