I’m addressing the Cambridge Science Festival this Wednesday, in the company of Dr Evan Harris and Dr David Cleevely, chaired by Tim Radford from the Guardian. The theme of the evening is science funding and policy and I’m the economist on the panel. The organisers have let me have 4 slides, which are here. But having put them together it stuck me that quite of lot of science and innovation facts and policy can be put into one picture (which is the final slide in fact): here it is.
A Virgin Upper Class Cabin (B747, November 2009)
The picture is of one of the versions of Virgin’s Upper Class Cabin. Now, I think most people would agree Virgin’s upper class is an innovation. But where’s the science? Where’s the R&D tax credit that helped here? What does this tell us about policy?
Actually, there is some science here. Its not widely known, but Virgin owns some patents that you can see in this picture. Even so, they are surprising. One of the patents they own is not the seat mechanism, which you would think is the main “scientific” bit of the seats, but it’s the layout of the seats that enables them to get more (very valuable ) seats into the space than their competitiors.
But if you asked most people about what’s new in this picture, they wouldn’t immediately even think of the science. Rather, it’s the cool design of the cabin, the hip marketing, the training of the funky staff. Join this with the software that lets you reserve the seat and preview the flight before even get onto the plane and you can see why this is innovation in one picture. Firms are not just developing new knowledge from science, but new knowledge from a whole range of other investment in intangibles: design, reputation, staff knowledge, software, new business processes. The work we have done in developing the UK innovation index shows that, in 2008, spending on R&D was only 12% of all spending on all intangibles (£16bn out of £137bn).
What does this say about policy? A lot of policy is fixated on the science base: universities, large scientific apparatus like the Hadron Collider, and R&D tax credits (which are only for scientific research). Some of those policies, like support for competitively determined university research money via research councils) is very valuable and was rightly defended in the October spending review. But innovation is wider than this and therefore affected by a host of other policies. New firms bring new ideas to the marketplace (Virgin was only able to enter the market when entry regulations were relaxed). Immigration of firms, entrepreneurs and scientists brings new ideas to a country. The internet brings new information and products at the click of a mouse. In making innovation policy, let’s not forget the broader picture.