DTI 1998 Competitiveness White Paper:Some background and introduction

Intellect Knowledge Economy CampaignKnowledge Economy Working Party Meeting

Russell Square House4th November 2003

A personal view from:Prof. Jim Norton

Independent DirectorFormer Director Cabinet OfficePerformance & Innovation Unit

e-Commerce team

• The context in which the White Paper was developed.

•Was the basic analysis sound?

•What does benchmarking indicate?

•Were the initiatives taken successful - a personalview?

•What are the key issues now for Intellect members?

• A closing thought...

Issues to be covered

The White Paper context…

History of ‘Hezeltine’CompetitivenessWhite Papers.

Need to revitaliseDTI.

Background of firstDTI Future Unitreport.

Led to firstPerformance &Innovation Unitreport

A contemporary slide produced for the DTI’sDepartmental Strategy Group on the Future Unit

“Converging Technologies” Report

• Peter Mandelson is positioning DTI as: “the Department of the Future”; and “giving priority to the development of the knowledge-driven

economy”, impacting all sectors of UK industry, manufacturing andservice alike.

• He has tasked the Future Unit to “champion the development of theknowledge-driven economy”. This will be achieved through the work ofDTI’s sectoral and regional units. It will be at the heart of the forthcomingCompetitiveness White Paper.

• The report’s recommendations reflect the significant further multi-disciplinary work required to ensure that that the UK’s social, economicand institutional developments remain in step during this period of rapidand complex change.

• The context in which the White Paper was developed.

•Was the basic analysis sound?

•What does benchmarking indicate?

•Were the initiatives taken successful - a personalview?

•What are the key issues now for Intellect members?

• A closing thought...

Issues to be covered

Was the basic analysis sound?

The challenge of the knowledge driven economy:

“In the global economy, capital is mobile, technologyspreads quickly and goods can be made in low costcountries and shipped to developed markets. Britishbusiness therefore has to compete by exploitingcapabilities which competitors find hard to imitate.The UK’s distinctive capabilities are not rawmaterials, land or cheap labour. They must be ourknowledge, skills and creativity.”

Source: Our Competitive Future building the knowledge driven economy. Dec1998

• The context in which the White Paper was developed.

•Was the basic analysis sound?

•What does benchmarking indicate?

•Were the initiatives taken successful - a personalview?

•What are the key issues now for Intellect members?

• A closing thought...

Issues to be covered

Booz Allen Hamilton e-Economy Framework

Market

Citizen Readiness

Citizen Use

Citizen Impact

Political

Business Readiness

Business Use

Business Impact

Infrastructural

Govt. Readiness

Govt. Use

Govt. Impact

The e-Economy

Environment

Readiness

Uptake & Use

Impact

The above twelve indicators (shown in white) formed the basis for the BAH benchmark

Source: BAH Benchmark report November 2002

Recent Benchmarks: Booz Allen Hamilton 11/02

Extract from the Executive Summary of International e-Economy Benchmarking:

The UK has the second best environment for e-commerce among the benchmarkgroup of nine countries.

Assessed against the quantitative multi-indicator benchmarking frameworkdesigned for the Information Age Partnership, Booz Allen Hamilton & INSEAD,the UK has not yet reached its target of being the best environment for e-commerce,but has made substantial progress since 1998 when the target was set.

The UK has many environmental strengths, although these have not yet beentranslated into high levels of uptake and use of the Internet.

The UK’s relative strengths are in its Market and Political Environments, Businessand Government Readiness for e-commerce.

Its relative weaknesses are in Citizen Uptake, Government Uptake and to a lesserextent in Infrastructure.

Source: BAH. Covering Australia, Canada, France, Germany, Italy, Japan, Sweden, UK and USA

Which Countries score highest?

Source: BAH. Covering Australia, Canada, France, Germany, Italy, Japan, Sweden, UK and USA

Market

Citizen Readiness

Citizen Use

Citizen Impact

Political

Business Readiness

Business Use

Business Impact

Infrastructural

Govt. Readiness

Govt. Use

Govt. Impact

Sweden, USA, UK

Canada, USA

Canada, Sweden, USA

USA, Sweden

USA, Australia, UK

Sweden, Germany, UK

USA, Sweden, Germany

USA

Japan, USA

USA, Canada,Australia, UK

Sweden, Canada,USA, Australia

Sweden, Australia

But a following wind: Communications spend as a proportion ofhousehold income has been steadily increasing across the OECD

countries…

*Communications includes Telecommunications equipment and services and postal services

Hungary, Norway, Slovak Republic, Switzerland and Turkey are not included

Source: OECDSNA Database

• The context in which the White Paper was developed.

•Was the basic analysis sound?

•What does benchmarking indicate?

•Were the initiatives taken successful - a personalview?

•What are the key issues now for Intellect members?

• A closing thought...

Issues to be covered

White Paper Commitments

Building UK capabilities

Collaborate to compete

Competitive modern markets

Innovation and entrepreneurship in government

Measures to tackle the productivity gap (as setout in the 1998 Pre-Budget Report)

Building UK capabilities: A personal view…

Ensure that by 2002 the UKprovides the best environmentin the world for electronictrading.

Launch new support servicesaimed at helping one million UKbusinesses to get wired up tothe digital market place by2002.

Tax incentives to encourageR&D in SMEs.

Establish a national network ofFaraday Partnerships

Provide advice to 10000 start-ups a year through BusinessLinks.

Appoint a SpecialRepresentative for the DigitalEconomy.

Consult on corporate venturingand review public financialmarkets for small businesses.

Recommend ways of makingmore of the commercialpotential of the outputs of publicsector research establishments.

Launch a second round ofForesight.

Successes Failures

Source: Personal opinion focusing on areas within the ambit of Intellect

Collaborate to compete: A personal view…

Set up new Business LinkCentres of Expertise to providelocal access to new specialistservices.

Fund up to ten proposals fromsectors to improve their supplychains adapting the SMMTIndustry Forum model.

Examine whether there is scopeto lower barriers to immigrationthat prevent entrepreneurs andskilled professionals fromcoming to or remaining in theUK.

Substantially support the CBI’sFit for the Future campaign.

Increase the ‘Invest in BritainBureau’s focus on attracting high-value projects.

Look at specific ways to work moreclosely with local government tosupport new investment andbusiness competitiveness.

Create the conditions whichencourage the formation andgrowth of clusters and set up aMinisterially-led team to look atbiotechnology clusters.

Review how the planning systemcan best help promote the needs ofclusters.

Successes Failures

Source: Personal opinion focusing on areas within the ambit of Intellect

Competitive modern markets: A personal view…

Maintain the UK’s position asone of the world’s most openeconomies.

Remove legal obstacles thatstand in the way of electroniccommerce.

Provide the OFT with an extra£15M over three years toenforce the new CompetitionAct more effectively.

Establish a voluntary licensingscheme organisations providingsecure electronic messaging.

Implement an action plan tomodernise the intellectualproperty rights system.

Reform telecommunicationsregulation.

Review with the BritishStandards Institution what canbe done to acceleratestandards setting.

Ask the Accounting StandardsBoard, in consultation withothers, to look at the scope forbetter guidance on disclosure ofintangible assets..

Successes Failures

Source: Personal opinion focusing on areas within the ambit of Intellect

Innovation and entrepreneurship in government:A personal view…

Ensure that by March 2001, 90%by volume of routineprocurement of goods bycentral government isconducted electronically .

Ensure that by 2002, 25% ofGovernment services areaccessible electronically.

Develop a competitivenessindex, based on a set ofcompetitiveness indicators, tomeasure the UK’s progress..

Carry forward the work of theFuture Unit to champion theknowledge driven economy.

Provide better information forSMEs building on theEnterprise Zone web-site.

Successes Failures

Source: Personal opinion focusing on areas within the ambit of Intellect

• The context in which the White Paper was developed.

•Was the basic analysis sound?

•What does benchmarking indicate?

•Were the initiatives taken successful - a personalview?

•What are the key issues now for Intellect members?

• A closing thought...

Issues to be covered

What are the key issues now for Intellect members?

Lack of follow through from research & development intoimplemented innovation?

Continuing productivity gap against major competitor nations?

Difficulty of nurturing new industry clusters?

Continuing public sector problems with the “people dimension”of information systems mediated business change?

Continuing weakness in manufacturing and very visible ‘lowend’ service job losses to transition economies (such as India).

Source: Some suggestions based more personal perceptions thanresearched fact…!

• The context in which the White Paper was developed.

•Was the basic analysis sound?

•What does benchmarking indicate?

•Were the initiatives taken successful - a personalview?

•What are the key issues now for Intellect members?

• A closing thought...

Issues to be covered

A closing thought…

Where is the life we have lost in living?Where is the wisdom we have lost in knowledge?Where is the knowledge we have lost in information?

T S Eliot, Choruses from ‘The Rock’, 1934

And a codicil for the 21st century…Where is the information we have lost in data?