the atlas of ideas

8/9/2019 The Atlas of Ideas

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Nevertheless, it's still the case that 90% of Chinese workers are employed in agriculture

or the unproductive public sector. Wage rates are rising quickly in the developed

southern and eastern provinces. And when I spoke earlier of the increasing

interdisciplinary nature of engineering, which I believe is reducing the relevance of the

traditional ways of characterising engineering into specific disciplines like electrical,

mechanical or civil, then it occurred to me that perhaps the same decline in relevance

applies to the way in which we've traditionally characterised economies: developed,

developing and under-developed.

Perhaps China and India will become examples of three economies in one country. In

the case of China, the south and east will rapidly become developed. The low

manufacturing will move north and west. The extreme northwest will remain under-

developed and largely agricultural, but over the next 20 years, the boundaries betweenthe three will move inexorably north and west. China, therefore, will challenge not

only for low-skill manufacturing, but also be a highly competitive knowledge economy

as well.

Of course, three economies in one country will inevitably create great social strains. I

mean, we only have to look at the situation with two economies in one country, in

Germany today. And this may 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 social and economic one as well. And that's why we hope that

this Demos project will shed some light on these issues, and help all of us to see the

opportunities and threats that China and India both offer and pose, from a balanced

perspective.

I think the programme weve lined up today, with an extremely impressive set of

speakers, will give the project a very powerful launch. So with no further ado, I'd like

to hand over to James Wilsdon, Head of Science and Innovation at Demos, who is our

Chairman for today. James, with Charles Leadbeater, will lead The Atlas of Ideas

project. Thank you all for attending, and I hope you have an interesting and a

productive day.

James Wilsdon, Head of Science & Innovation, DemosAlf thank you, we're very grateful to you and to the IEE and, indeed, to all our

partners. It's quite a consortium that we've assembled, and it certainly wouldn't have

been possible without our partners generous input and support.

Can I add a word of welcome from Demos to you all. We're delighted to see so many

people here. Today's event marks the start, as Alf said, ofThe Atlas of Ideas project.

Normally Demos would wait until the end of a project, until we had a report to give

you, before organising such a large meeting. But on this topic, in addition to the

tangible sense of momentum and possibility that you get from talking to scientists and

policy-makers in Asia, we were very conscious of the groundswell of interest that there

is in these questions here in the UK.


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So we felt it would be helpful at this point to bring together as many of the interested

parties as we could, and begin a conversation that we hope will continue throughout

the project and, indeed, beyond.

The morning is divided into two halves. In a moment, Charlie Leadbeater, my partner

in coordinating the project, will outline its objectives and the themes that we intend to

explore. We will then hear three different perspectives on the new geography of

science. Firstly Lord Sainsbury, the Minister for Science and Innovation, then his

Excellency, Kamalesh Sharma, the High Commissioner for India here in the UK, and

finally Sheila Jasanoff, who is Professor of Science Studies at Harvard.

After coffee we move into more informal mode. We're going to have a keynote to get

us started from Lord Alec Broers, followed by a panel discussion with, amongst others,Ed Balls, Fiona Clouder-Richards, and a variety of other experts. And we hope that the

second session will provide a chance for more participation and comment from you

all. So I won't say more now. There is an introduction to the project and its aims in

your packs, but to put a bit more flesh on those bones, I'll hand over to Charlie

Leadbeater.

Charlie Leadbeater, Demos associate and coordinator of The Atlas of IdeasThank you James, and thank you to the IEE and all our partners for making this

project possible. To explain the aims and objectives, I'm going to adopt initially a kind

of unabashedly autobiographical and anecdotal approach, which isn't at all scientific.

This project started for me almost two years ago when I was at a conference, actuallywith Lord Sainsbury, and said that I was about to embark on a self-funded tour of

innovation centres around the world. And I managed to bump into Fiona Clouder-

Richards from the Foreign and Commonwealth Office who very kindly put me in

touch with her science and technology advisers, who made possible a series of

meetings in different places. This is just a snapshot, really, of what I found on that little

tour.

I met a Korean man who had started out as a tuna fisherman 50 years ago, who was

moving into the human enhancement business. He had the largest herd of genetically

pure, virus-free pigs to breed human hearts in the world. His point was very simple:Korea is well known for making electrical components, and future healthcare is going

to be a big business, so we'll make human components. Why, if you could live to 130,

wouldn't you want to do that? It's part of an amazing story in Korea over the last

decade or more of a huge growth in R&D and scientific output. In 1971, Korea spent

just $29 million on R&D, or about 0.3% of GDP. Now it spends about 3% of GDP on

R&D. Between 1970 and 1974, Korean inventors were awarded just twenty-four

patents in the US. Between 1995 and 1999, they were awarded 11,000. So this is an

extraordinarily rapid, accelerated rise up the science ladder.

Next I went to Bangalore, and met, amongst other people, a biotech company called

Biocon. This started out making industrial enzymes. Now it has a thousand employeeson the edge of Bangalore. 70% of them have higher degrees. They cost a tenth of a


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scientist in Munich. And the head of research there, Das Gutham, lent over the table

and said to me, what you have to realise is that we only need 5% of Indians to have

higher degrees like these, and we'll have a scientific population the size of the entire

UK. Well, that's hyperbole in part, but it shouldn't be completely ignored. What you

witness in Bangalore is the huge scale and quality of the technical know-how: of a sort

of human capital reserve that all sorts of people can tap into.

At Wipro, one of the biggest information service providers, they told me the problems

they were having in turning their know-how into intellectual property. They'd

invented all sorts of software that they thought was far better than that made by

Microsoft or Sun, but they couldn't imagine turning it into a brand, and so they were

servicing these companies. Everywhere you go in Bangalore, people talk of Silicon

Valley. It's like a second home for a lot of people. And yet that start-up culture seemsto have made relatively little impact on some of the activities in Bangalore. I visited

one of the few start-ups to spin out of the Indian Institute of Science, and it was clearly

quite a rare thing. So turning science into Indian products for Indian markets is

proving perhaps more problematic than servicing multinationals.

In Taiwan, I had dinner with the Minister for Innovation, who was overseeing a new

innovation strategy something new to Taiwan, drawn up because in the previous two

years 5% of Taiwanese manufacturing had departed for mainland China. At the

Hsinchu Science Park started only a couple of decades ago, I learnt that

the movement of expatriate scientific labour is now absolutely critical to scientific

competitiveness. When that Park was created in the early '80s, there were less than 50

returnees from the United States. Now there are 3000. Of the 297 high-tech companies

in that park, 115 have been created by Taiwanese researchers returning from the US.

So it turns out that the brain drain of twenty years ago has become a huge investment

in human capital, which is a source of competitive advantage. And largely thanks to

those returnees, Taiwan now makes 70% of the world's integrated circuits.

In Singapore, I learnt that this circulation and competition for scientific talent is not

confined to luring back expatriates. In the huge Biopolis being created just outside the

centre of Singapore, I met two scientists who had worked in the UK, both at highly

prestigious universities: one at Cambridge, one at UCL. They had both been lured toBiopolis by the Economic Development Board, which had set out a very deliberate

strategy of targeting key scientists who could then attract other research teams. One, a

scientist born in Preston, was revelling in the fact that he had just managed to hire

some researchers from Yale one Swiss, one Spanish to come and work in

Singapore. Now, none of that means that Singapore is going to have a thriving biotech

industry in ten years time, but ten years ago it didn't have a pharmaceuticals industry.

It will definitely be a player in that process.

These huge knowledge diasporas are going to be a critical part of this story. There are

more than 1.3 million people from the former Soviet Republics with a tertiary

education working outside Russia, a million Indians, 700,000 Chinese. Loomingbehind all of this, as I travelled, was the power and the threat of China. I went to


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Finland to look at the much vaunted and incredibly impressive Finnish innovation

system, and visited a company called Elkatec, which makes components for mobile

phones, and has risen on the back of Nokia and Ericsson. They created their first

factory outside Finland in Estonia, and I went to look at it. They started making

mobile phones in this factory in about '97, and slowly they acquired the competence to

not just make them, but design them.

When Elkatec opened its next factory, which was in Hungary, engineers from Hungary

came to Estonia for three months to learn how to set up the factory. Two years later

the next factory was built in Mexico, and engineers came for three weeks. When the

next factory was established in China in 2003, no-one came, because the capability of

setting up a factory to make and design mobile phones was now so well embedded in

the company, they didn't need a lengthy process of learning in Estonia. The guyrunning this factory, Ulma Petisson, who is a kind of Estonian nationalist, was

bemused, really, that only 15 years after escaping Communism and having worked so

hard to build up a capability in mobile phones, it was eroding so rapidly before their

eyes. The story there, of course, is that China is not just competing in low-tech and

commodity goods, but in high-tech at the same time. Exports of high-tech goods have

grown by 22% a year between 1992 and 2001 from China, a six-fold increase, two to

three times quicker than comparable Asian economies. It's doing high-tech and low-

tech and agriculture all at the same time.

So to round it off, a couple of weeks ago, I went to Rolls-Royce, probably Britain's

most innovative, creative and successful engineering company. Rolls-Royce has a

global position thanks to spending 650 million a year on R&D, and I asked them

about their future strategy in R&D. Twenty years ago, more than 90% of Rolls-Royce's

R&D was done in the UK. Now they spend the same amount in real terms on R&D in

the UK, but it's less than 50% of the total that they spend. 50% is now done outside of

the UK. 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 main interest was in

technology partnerships with universities in the UK: 25 of them currently. When I

asked who was doing the science in the labs in these universities they said, well of

course, it's nearly all Chinese and Indian researchers.

So at the end of all this, I decided I had to go to China. From what one was hearing,

one would expect a story of the spectacular rise of a scientific superpower. R&D

investment has increased in China by 15% a year between 1992 and 2002. It's close to

1.5% of GDP. There are now more researchers working in China than in Japan. The

number of researchers has doubled to more than 800,000, and China has been the

recipient of massive inflows of foreign direct investment - $50 billion last year.

So one might expect to find a scientific powerhouse.

But when I met the head of New Margin Ventures, leading venture capitalists in

Shanghai, in the gatehouse of a former compound used by Mao and Deng Xiaoping,

he said, well, we set up in business to back scientific ventures, and we looked hard forscientists to back, but actually we couldn't find many. And some of those that we


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found turned out to be charlatans, so now what we are doing is funding management

buy-outs, bringing in Western technology and management to turn around state

enterprises.

At the Shanghai Science Commission, where I went to learn about their long-term

plans for science, I was met by twenty people who wanted to hear all about Lord

Sainsbury's Foresight initiative, and the UK government's impressive 10-year science

and innovation plan. We have 5-year plans, they said, how can you have a 10-year

plan? Yet as an OECD report on China's role in the world economy in 2002 noted,

quantity doesn't mean quality. There are massive numbers of people doing degrees,

but very few doing higher degrees. Education tends to emphasise theoretical

knowledge rather than research and problem solving. The legacy of state planning is

still heavy; it didn't tend to reward innovation. The lack of IP protection means thatcompetition is ferocious on price, and that doesn't encourage R&D. The links between

performance and promotion aren't obvious for managers, and so that doesn't

necessarily reward innovation. And the financing of R&D is still very under-

developed.

That is all borne out if you look at one of the classic measures of R&D output, which is

patenting. Despite the massive growth in R&D spending in China, the share of

Chinese patents granted in the US and Europe has remained static at about 0.3% of all

patents. So despite massive inputs into R&D, one of the measures commonly used for

outputs, remains very low. Even amongst those patents, most were granted to

multinational companies. Now, it may be that patents are the wrong measure to use,

and that we're simply not spotting what's really going on, but the conclusions that I

came back with from all of that were three-fold.

The first is, there's just a huge amount going on. A lot more going on than we might

give credence to if, as Alf said, we think that the competition is just about low-wage

jobs, commodity products, call-centres and services.

Second, I had absolutely no idea what it all amounted to, because it's obviously a very

complicated story with criss-crossing flows, things that look big but aren't big. It's very

easy to overestimate what's going on, and it's very easy to underestimate it, becauseactually we have very little purchase on it.

My third conclusion was that we needed a more sober and strategic overview of the

trajectories of development of science and innovation in these countries to learn where

they're headed, what the impact might be, how they're organising themselves, and

what are the opportunities for collaboration and competition. The other thing that I

think I realise in coming back was that, to do this, would require us to think afresh

about many of the assumptions that we've used to think about science innovation and

development.

To close, I just want to run through what I think some of those are. The first is aboutleap-frogging. I think one of the assumptions behind a lot of science and innovation


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policy has been that being able to innovate and invest in science is a mark of a stage of

development, of a mature economy with surpluses to invest. Well, it turns out that in

Korea, that effort can be organised at a very accelerated rate. It can happen far more

quickly than perhaps we had thought. And in China it's clear that you can do

agriculture, low-tech and high-tech all at the same time. As Alf said, three economies

in one. That may be because science and innovation is becoming 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 will be a very important part of the story.

So that the whole model of innovation being a distinct stage of development, 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 global and national trends here. Oneof the most impressive bodies of academic literature on innovation is called the

National Innovation Systems set of theories, and it's assumed that in some sense

innovation is the product of an interlinked set of national institutions of markets and

research and academia and so on and so forth. But these countries seem to be

developing national capabilities on the basis of drawing from global flows of

knowledge. So they haven't done national first and then gone global, it's almost as if

they're drawing down from global flows to create their national science base. What we

used to think of as the brain drain, a kind of zero sum transfer of knowledge and

people, actually turns out to be something more like brain circulation, complex and

criss-crossing flows of people and ideas.

The third thing that struck me is that, of course, this is part of a very familiar story.

When you look at who's doing R&D in these places, it's often multinational

companies, large global companies, searching for cheaper, better sources of innovation

close to fast-growing markets. There's absolutely nothing new in that. That's what

large companies have always done. They've always been at the forefront of R&D and

they've always been at the forefront of globalisation. This is exactly what you would

expect them to do. But there are two qualifications to that.

The first is that the way that companies organise R&D will change quite significantly. I

had a session with Nokia, the Finnish mobile phone company, in which Erki Umula,the Head of Science and Technology Policy there said, look, twenty years ago we used

to think of ourselves as a mobile phone maker, and we had a kind of pipeline.

Knowledge over here, down a pipeline, products over here to consumers. Now 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 move in tandem with markets, with ideas coming to us from the

market as much as ideas are going down the pipeline outwards. It's a process of

orchestrating lots of different players around a new domain of value, he said. So even if

multinationals are at the heart of this, the way they organise research is going to

change a lot, and the spin-offs from that multinational research will have local pay-

offs. It will transfer and feed into the local economies.


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Another question is what's the public role of knowledge in this globalising knowledge

economy? The National Innovations Systems literature gives a very important role to

universities and the sharing of knowledge through public protocol. What should be

the public accompaniment to the globalisation of private flows of R&D? This issue will

become more important, as is absolutely clear over the debate on SARS and avian flu.

We'll need stronger and more effective forms of public cooperation.

Will the emergence of more science in these economies mean that we will do new

science in new ways? Their science is growing at a time when we're on the verge of

dramatic advances in biotech, nanotech and other areas. Will China or India invent or

create new ways of doing science in these areas by blending knowledge in different

ways? Not just outsourcing or offshoring existing ways of doing innovation, but

creating entirely new kinds of organisation. Edison's lab, invented at the time of thegrowth of electronics and the rise of the telephone, was a classic organisational

innovation that defined how R&D was done for many years afterwards. Well, will we

find in these places organisational innovations of that kind as well?

And will new science mean new ethics? I think there's a widespread assumption here

that science thrives in a kind of world described by Karl Popper and Richard Florida,

in which ideas are openly contested and debated. As Florida argued in The Creative

Class, it's tolerance that creates the atmosphere in which talent is attracted, and then

technology follows. But that doesn't necessarily seem to be the case in Asia. In fact in

some respects, biotechnology is advancing in these countries because there isn't that

kind of culture. Because there is, as the people in the economic development board in

Singapore put it to me, a much more pragmatic approach to these questions.

Paul David, the economic historian, argues that the open culture of science in Europe

is historically contingent. These very different cultures will create entirely new cultures

and ethics of science. And they will create new kinds of products when they start

addressing those very fast growing markets. At Biocon, they were mainly making

statins for western markets. It will, I think, become incredibly interesting when they

start making products designed for the Indian market. One of the most interesting

products that was being developed when I was in Bangalore was the simputer, a multi-

lingual handheld computer for use by farmers.

And finally, we won't be able to think about the future unless we think about the past

in new kinds of ways. This is not a story of emergence, but a story ofre-emergence.

When Europe was in the dark ages, Koreans were using metallic printing, China was

using gunpowder, India was developing sophisticated mathematics. I was in Blackwells

bookshop in Oxford yesterday looking at the history of science shelves, and it's an

amazing account, really, of science through the eyes of a series of great male European

inventors. There was a great book called Leonardo: the First Scientist, which might

strike you as rather odd if you're Indian or Chinese. I think there were two books

about China in that entire shelf of hundreds of books. So we should beware that our

own viewpoints and frameworks for this are heavily inflected by the history ofcolonialism, which colours the way we think. In 1935, Sir Arthur Eddington, then one


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of the greatest astrophysicists, publicly ridiculed a young scientist who had just arrived

in Cambridge from Madras, who had come up with the theory of black holes. It set

back astrophysics for 40 years, and Chandrasekhar won a Nobel Prize belatedly in

1983. We should bear that story in mind when thinking about the impact and

importance of science in India.

So what does all this mean? Well, it means we're entering a new phase of globalisation.

A phase in which ideas, people, knowledge will flow as easily as commodities, money

and products. Ideas will come from many more places. There will be many more

players, and it will be much more uncertain. That means there will be more

competition: competition for talent, competition for resources, and competition in

products. That will have big implications for the ways in which we organise ourselves.

But there will also be huge opportunities for collaboration, for the publicaccompaniment of that much more dynamic knowledge economy. And it also means

that we'll be living in a much more complicated, multi-polar world in which ideas will

come from many more sources. That's why I'm very pleased that the Foreign Office

have led this consortium with others, the British Council, Scottish Enterprise,

Vodafone, Microsoft, SEEDA and others, to make this project possible, and I hope that

we can report back to you in due course on what we find out. Thank you very much.

James WilsdonCharlie, thank you. We're going to hear now from Lord Sainsbury, the Minister for

Science and Innovation. Lord Sainsbury has long been a champion of these questions

within government, and as Charlie mentioned, he's also been a source of greatencouragement to us at Demos in developing this project. We are really delighted that

he could be here today.

Lord Sainsbury, Minister for Science and Innovation, DTIThank you very much. I think at no time since the industrial revolution, has the

restructuring of global economic activity been so great, with Asia moving from the

fringes of the world economic order to the centre. We're seeing the world's division of

labour being redrawn. In 1980, less than a tenth of manufacturing exports came from

the developing world. Today it is almost 30%. In 20 years time, the figure will probably

be 50%. I think this new economic 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 Atlas of Ideas, which I think is an extremely exciting project to map the trends in

science and globalisation with a particular focus on the emerging economies of Asia

China, India and Korea.

I think this study is important because if we are to form relationships of mutual

advantage with emerging economies such as China, India and Korea, we need to do so

on the basis of good knowledge of their scientific and technological strengths and

weaknesses. When events are moving as fast as they are in Asia today, I think it's

extremely easy both to overestimate and underestimate their knowledge base. I was

hugely encouraged by Charlie Leadbeater's introduction, because I think what we neednow is really hard facts and economic expert judgements. We've had enough of what I


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think of as excited journalism, of the kind that says I visited Bangalore and there were

all these white-coated Indian scientists standing by gleaming laboratories. That's fine,

but it doesn't actually give you a good assessment of what is a very complicated but

extremely interesting and important situation.

If you look at what is happening in China, you see a very interesting situation. But it's

not simply that China is a high-tech country powering ahead. It's much more

complicated than that. Or perhaps it's much more simple than that. What the story of

China is today, I believe, is a story of a country which has brought together what is

necessary for economic growth, which is a reasonably well-educated population, very

low wages and a market economy. And what we now know is that if you bring those

ingredients together, in the globalised world in which we live, you can expand progress

much faster than was ever possible in the past. That's because of modern transport andmodern communications. What China is growing on is not the basis of a lot of high-

tech, it's on the basis of a huge amount of foreign direct investment. That foreign

direct investment is by and large bringing the technology into China.

Now the situation, as always, is much more complicated than that, in the sense that

there is, an additional factor here which was not present in the story of Japan, and I

think hardly at all in Korea, but may turn out now to be very important in the case of

India as well, which is, of course, you have a large diaspora, and that includes an

enormous population of very good Chinese scientists who have been underpinning the

American scientific system. What you are now seeing is these people coming back to

China and of course that will radically change the position and mean that China can

much more quickly play its part in a high-tech world. But I don't think one should

confuse that with what is happening economically at the moment in China, which is

very much powered by foreign direct investment and foreign technology.

Even in the case of Taiwan, again, where you've had the enormous impact from

Taiwanese scientists and entrepreneurs who have come back from America, it's quite

interesting if you look at what is happening there in the electronics field, where the

designs and the major advances are taking place still in Silicon Valley, but because the

Taiwanese scientists and entrepreneurs have come back from Silicon Valley and have

very good contacts there, what you're seeing is a flow of ideas coming back and beingmanufactured in Taiwan, or now in China. But it's all on the basis of the development

being done in Silicon Valley. So I think we need to be able to take a much more subtle

and careful view of what is happening in these countries if we are to have really

mutually advantageous relationships.

Also, we need to be very clear-headed about our own competencies and knowledge in

these areas. There is a tendency in these things to go and visit these countries and say,

they have huge numbers of scientists and engineers. Well, usually it is engineers, and it

is important to keep in mind is whether you're talking about engineers or scientists. A

lot of these countries, particularly it's true of Japan, it's true of Korea, it's true now of

China, have very numbers of engineers. And that's where they put a huge effort.Against that we do indeed appear to have very few engineers. But if you broaden it out


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and look at the number of scientists, then the picture is rather different. Of course, in

any of these countries, simply because of the scale of the country, the numbers are

huge. But people always look at the UK and start saying, we're not producing

scientists.

Well, about 40% of our undergraduates are in fact scientists. The number has gone up

hugely in recent years. There are now 120,000 more young people studying science at

university than in 1997. Not 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 of the future. So nothing will be gained from this study

if it's just a question of going round and saying, we can't do this in the UK, and there's

all this 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 despairwithout any intermediate stage of actually thinking about where we're good and how

we can exploit the opportunities that are opening up.

If we are to become a key hub in the knowledge economy, which is what we plan to do,

we need to get emerging economies to invest in R&D in this country, and we need to

forge partnerships with the best research abroad. Both of these objectives depend on a

good understanding of the new scientific and technological geography. At the present

moment we're drawing up a new international science and technology strategy to

inform our relationship with other countries. This has four objectives. Using

international scientific collaboration to make sure that the UK retains its outstanding

record of discovery and remains at the cutting edge of world science. Secondly, using

international scientific and technological collaboration between countries, universities

and venture capitalists to increase our innovation performance. Thirdly, using science

as a tool of diplomacy to tackle problems such as climate change. And fourthly, using

scientific and technological collaboration to help the developing world tackle its

problems. And I believe that the Demos work could form a very useful input into this

strategy.

I mentioned the figures about restructuring the world economy, and when you look at

this, the impact of China and India is enormous. China and India could be the second

and sixth largest economies in the world in 20 years time. On a purchasing powerpriority basis, the IMF estimates China is already the second biggest economy in the

world behind the US, and almost double the size of Japan. India is already bigger than

Germany, the UK and France. China and India are now turning out more engineers,

more computer scientists, more university graduates 4 million a year than the

whole of Europe and America combined. In this new geography we have to forge new

partnerships to collectively make the most of our skills, science and technology. As the

Prime Minister said during his recent visit to China, it is in the areas of science, and

technology, and knowledge that the future of both our economies is going to be

found.


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Let me first say a few words about China. Of course, this has been one of the world's

major economic success stories since reform began in 1978. China's economy has

grown by an average of 9.5% a year over the past 20 years. And lately an increasingly

sophisticated range of exports has sustained this growth. But again, as I said earlier, we

need to be clear about whether this is on the basis of home-grown science and

technology, or on the basis of foreign science and technology. If current trends

continue, we could see China's economy quadrupling in size between 2000 and 2020.

And China becoming the largest world's exporter by 2010, with China's goods and

services representing as much as 10% of world trade.

Now in the UK, we are already building partnerships with China in high-tech trade

and inward investment. The two biggest foreign investors in China are Shell and BP, of

course who are both British and science-based. Other significant British investors inChina include GlaxoSmithKline and AstroZeneca and Vodafone. Some of the major

British exports to China are in precision instruments, medical, optical, phototechnical

chemicals and pharmaceuticals - all science-based. So here you see what you would

expect to be happening in these circumstances, which is that China is making most of

its growth on the base of its low wages. It may be high-tech manufacturing, but of

course it is foreign technology.

In March 2004, Huawei, which is a major Chinese telecoms company, opened their

European headquarters in Basingstoke. A UK R&D centre will follow. As China's

economy has grown and opened up, so has the country's science and technology base.

In 2003, China spent approximately 10.2 billion on research and development,

representing 1.35% of GDP. It's aiming for a figure of 2% by the end of the decade, but

already China's R&D spend is in PPP terms the third largest in the world, after the US

and Japan. Well-equipped lab buildings are going up on the campuses of major

Chinese universities. In Beijing and Shanghai, multinational companies are setting up

major R&D facilities. And China's share of the international science literature is rising

too. China will publish a 2020 plan for science and technology priorities over a broad

range of sectors in early 2006.

Of course, they have a slightly different view of science and technology plans than we

do. Their plans are still, I would conceive, old-fashioned in the sense that they seek toplan where they will actually put the science and technology resources, as opposed to

what we see as the way that you plan ahead, which is to plan the amount of resources

to go in, but keep a great deal of flexibility on how those will be funded through the

research councils. It's a very different view of what 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 teams in Beijing, Shanghai, Chongqing and

Guangzhou, working in partnership with British Council colleagues. The FCO's

science officers also work very closely with UK Trade and Investment and with the

GlobalWatch International Technology Promoters of the DTI, to make the most of

commercial opportunities and high tech missions. For example, two Chinese sciencepark incubators have been established in the UK, at Cambridge and Manchester, and


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these are paired with incubators in Wuhan and Guangzhou. So we have the idea that

there may be cases where the Chinese government wants to get Chinese companies to

go global in high-tech fields. And the way they will do that is by putting them in

incubators, like these in Cambridge and Manchester.

We also have annual meetings on science which take place at a ministerial level. I've

visited China as Minister for Science and Innovation six times since I've been Minister,

and I think each visit has revealed more of China's dynamism, the momentum for

change and opportunities to build links through science. I was delighted in January to

launch our year long UK-China Partners in Science initiative. This aims to promote

collaboration with China and to raise the profile of UK science.

Funded by the Office of Science and Technology, the FCO, the British Council, UKTIand private companies, the initiative includes some one hundred events. These have

included workshops or missions on climate change, food safety, hydrogen energy,

astronomy, B3G mobile phone technology, advanced jet engine technology, foodborne

pathogens, advanced materials and manufacturing engineering. Other events still to

take place include workshops on cancer research, plant science, e-science, satellite

technology, the science of sustainable development, polar research and urban

planning.

Events co-ordinated by the FCO focus principally on senior Chinese S & T specialists,

government officials and high-tech Chinese businesses. Alongside these activities are

events, led by the British Council, designed to engage a wider audience of educated

city-dwellers in the 16 to 35 year old age bracket.

This co-ordinated approach has had a real impact. In January I opened the UK-China

High Tech Forum. More than 100 delegates from UK universities and companies met

with 200 leading Chinese scientists, technologists and officials. Topics covered

included cancer research, renewable energy, knowledge transfer and the role of

venture capital in science. This was a highly productive meeting, prompting the China

Daily (the nations biggest selling English language daily) to declare on its front page

that Britain, China unite in hi-tech research.

All events under the initiative have delivered a clearer sense of where and how UK and

China can benefit from collaboration. Media activities and targeted networking have

helped to raise the profile of UK science. The initiative is on target to deliver a step

change in the number and quality of science and technology links between the UK and

China.

Turning now to India, which is also an extremely important partner for future UK

engagement. The Prime Ministers initiative signed on 20th September 2004 set out a

new strategic partnership between the UK and India. The initiative identifies key areas

for cooperation, where we want to tap the rich vein of innovative talent that both

countries share. India, of course, has the second largest English speaking scientific andtechnological workforce in the world. Every year it produces more than 3.4 million


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science graduates, and 690,000 post-graduates. An estimated 1.5 million scientists and

technicians are involved in research and development.

India produces world-class science. The 24% rise in its recent science budgets indicates

the importance that India places on R&D. Substantial funding for biotechnology

research, significant commercial interest, the creation of a new national stem-cell

research taskforce, and a new draft biotechnology policy have all ensured robust

growth in this sector. Other areas of international expertise include pure mathematics,

theoretical physics, chemistry, information technology and space research. There are

laboratories and institutes of the highest international standard. And a space

programme boasts a varied fleet of satellites and indigenous launch capability. India

has also joined the European Galileo Programme, and we've all heard about India's

global position in software development and IT-related services.

Again, our officers in country from the FCO, British Council, and UKTI work together

to facilitate policy influence, and build scientific and commercial links. A real

milestone for our science and technology relations with India is the agreement to set

up a new Indo-UK Science and Innovation Council, which will first meet in March

2006. This will produce a step change through closer coordination of science and

technology interests across all government departments in both UK and India, making

the most of the global competitiveness of both science communities. It will also

produce a mechanism for promoting British and EU funding opportunities, and

fostering higher education links and networking. I myself met with Minister Sibal in

July to discuss how to take forward the development of the Indo-UK science and

technology action plan, and I hope to visit India next year.

Some examples of how we've taken forward links with India include a visit by

Professor Dame Julia Higgins, Foreign Secretary of the Royal Society, to India's

premier research institutions, to explore possible collaborations. An Indo-UK stem

cell workshop was held in Bangalore in April 2005, instigated by our science team in

India. And as a follow-up, the Royal Society hosted a meeting in London in July

attended by the British scientists, other UK stakeholders, Indian scientists and policy-

makers.

As a result of these meetings there are moves for India to join the international stem

cell forum and set up a link with the UK stem cell bank. We already have in place with

India a number of scholarship, networking and collaboration schemes. We'll continue

to develop these to get the best young Indian talent to study or do post-doctoral work

in the UK, including the 10-20 million education initiative for India, announced by the

Prime Minister when he visited last month. We will also work out the development

side of the science and innovation relationship with India, building linkages in

agriculture, health-related research, technology transfer, and capacity building. We

will continue to foster scientific links in shared areas of excellence such as ICT,

biotechnology, material sciences, nanotechnology, genomics, environmental sciences,

mathematics, physics and chemistry.


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Our vision is that the U.K. should be a key hub in the global knowledge economy.

This means that the UK should be a country famed not only for its outstanding record

of discovery 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 companies

come from around the world to do research and set up high-tech companies, attracted

by the quality of our research and the strong links between universities, research

institutes and industry.

Finally, we should be a country with strong science and technological links with the

best research around the world, so that we can stay always at the leading edge. The

Demos project will be a valuable tool to further inform policymakers, universities and

business on how to take these interactions forward and forge new partnerships in thefuture.

James WilsdonLord Sainsbury, thank you very much. And now to complement that very helpful

overview of the activities of the UK government, we're pleased to have the High

Commissioner of India here in the UK, Kamalesh Sharma, who is going to give us a

view from the Indian side of some of these debates.

H.E. Kamalesh Sharma, High Commissioner for India in the UKThank you very much. First of all, I want to compliment those who have devised the

title for this seminar. I think 'Atlas' is a very happy choice of word, because you dorequire a new atlas in two ways. One is the geographical atlas in our minds which

divides the world into north and south, and into hermetic national, southern and

northern entities. Very recently, in the Journal for Economic Perspectives, Paul

Samuelson who is more than 90 years old and doesn't usually write anymore stirred

himself to write and enter into a debate. He said, look, I think I'm the biggest free

trader since Adam Smith, but I thought that the way the world is going to move

forward is that the north would vacate areas towards the lower end as it moves 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 global economics 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 much, 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 of as 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 many others with the developing capability that is associated with the

north, and that is a key factor. Not whether X percentage of the population is living

under one dollar a day. The question is, are they available to the north for partnership

or not, and economically how to get them in partnership? The geography has changed.

Mr Leadbeater made a very interesting point that the mental geography has to changetoo. In the New York Natural History Museum, they have done some research that


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shows every visitor has about 45 seconds of attention time per civilisation. As you walk

past, you are supposed to glance through all this 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 half of the things I didnt know myself.

Domestication of cotton, 2000 BC; domestication of chickens, 2000 BC; first surgical

intervention, 600 BC; the value ofpi, something like 500 BC. It goes on like this.

There was a trick question in the New York Times, 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 Galileo, is it somebody else, Kepler? And if you said one of these,

you were wrong, because the correct answer was Aryabhata, the Indian astronomer,

who said all this and spoke about the axis and why the seasons change and so on. But

the most startling thing was that if you said any of the Western names, you were out bymore than 1000 years.

This is not an unimportant point. Indian civilisations are supposed to have entered the

sand a long time ago, and cultural palaeontologists are supposed to dig them out and

reconstruct them. In the history of the world, the only two civilisations which have

been there from the beginning of civilisation and are modernising themselves are the

Indian and the Chinese. So people will be 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 meaning when

people say they are an old civilisation.

Why should it matter whether you are 5000 years old or 500 years old? Well, it does

matter, apparently. Because there is a DNA of capability and achievement which

obviously is ineradicable, which comes out when the conditions are right. This is what

is happening, I think, before our eyes. In manufacturing, this point was made recently

in a CBI conference when someone got up and said, please dont be surprised at what

is happening. India and China are trying to claw their way back towards the 50%

contribution to the worlds production which was theirs till about the middle 18th

century. So its nothing new. They can handle it, the question is, how are you going to

handle it?

What does it mean for globalisation? Globalisation has various types. Techno-globalism is going to have very different features. I read somewhere that there was a

decision taken that 3% of Europes GDP investment should be in science and

technology. Well, someone made a calculation: if its tough to get there with the

money, itll be even tougher getting there with the people, because that would involve

creating 700,000 extra scientists. Now even with 25 countries in the European Union,

that might take some doing.

If your mindset is we have to produce this only from the north, maybe you cant get

there. But if your mindset is that now there is techno-globalisation, you can find others

to make partnerships and alliances with you. I can do clinical testing there, I can do

molecule development there, I can do something, then you have a package which


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makes sense economically, and which gives you momentum and velocity, and in

which the emerging capabilities are being used.

A very important point was made by Mr Leadbeater: the capabilities are there, but the

entrepreneurial ability has lagged behind significantly. There are 100 R&D centres

from Fortune 100 companies - mainly US - in India, and thousands of patents are

being posted by these 100% owned companies. But if you look at spin-off companies,

there are not that many. So I think the future of any alliance is in how you can get the

ability as well as the entrepreneurial input. This is why everyone wants to have a share

in the company, in the management if possible, 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, untilChandrasekhar was mentioned, and Khorana in medicine and Chandrasekhar in

physics got Nobel prizes. And people started asking in India, where would these

people have been if they hadnt left the country? They probably would have been

pushing paper in in-trays and out-trays in some laboratory. Isnt it fair that talent finds

its highest level wherever it can find it? So we became very liberal about sending

people and this is now paying dividends back to us. Because now you have one terrain.

To Indians abroad, physical income, now, has become less important than psychic

income. They want to be at the place where they can make the biggest contribution,

and if they can go back to their own country and culture and make 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 isnt something thats

happened overnight. Nehru made this investment in the 1950s. Nehru 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 of our planning. Its not going to be

sequential. Its going to head on all fronts and then try and get the steam going in all of

them. So you had societies, polytechnics, engineering colleges, institutes of technology,

management, universities and everything. All of this was being created. This

intellectual, human capital was there, but it was not tradable.

Then came a technological revolution in telecommunications, first when the dot com

companies went bust, then it was optic fibre facility. For a song you could get

broadband. What would be a disadvantage in merchandise trade, which was that your

client is half way across the world, became 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 something which was tradable.

Now for a long time, a country like India has been an economy with a lot of inertia. A

lot of our modernisation began because of external reasons. The Soviet Union

disappeared, which was the model for planning. We had a huge balance of repayment

crisis, so we were propelled into modernisation. That phase has gone. Now India is anintellectually, economically, self-propelled entity. People are saying that you started


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AstraZeneca and Vodafone. Why are these the companies that are doing well in

China? It seems to me, at least as a nave listener to this account, that these are

companies that deliver goods and commodities that people unquestionably regard as

their birthright and that they know how to take up into their lives. So whether it's

mobility and automobiles or telecommunications or healthcare products or things to

do with food, these are very much things that we know are biologically, socially,

culturally universally needed for the development of human life. So it's not particularly

surprising to me in one sense that the companies that know how to serve these

particular niches are ones that should most readily have found partners in other

societies across cultural barriers.

I was also interested in the High Commissioner, Mr Sharma's account of the timeline

suggesting what kinds of contributions traditional economies, that are seen asdeveloping economies today, had made historically to science and technology. So 2000

years ago, India contributed such-and-such. If you look on the timelines of biotech

companies, they often begin in 6000 BC when China discovers, for example, the

brewing of beer. But what's the nature of those innovations? They pre-date science

policy, the language of hubs, and innovation and leading edge kinds of economy, so

what exactly was the process that allowed those kinds of innovations to come into

being? And one is forced to conclude that the hallmark of that era of innovation was

that it was bottom up. That the needs that people had were in some sense driving the

kinds of products, goods and commodities that came into being, rather than being

science driven, as we classically understand it, in terms of the elite of a knowledge

society coming up with where the next breakthrough is, and then that breakthrough

getting translated into products and going on into the market.

Well, why should we care which model of innovation we're talking about? The bottom

up kind that puts the needs of people first and generates discoveries, to be sure in

partnership with the best knowledge talents in the world? Or the kind of innovation

that says, invest in the knowledge talent first, the brilliant mathematicians, 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 model of innovation, the one that says begin with the talent and let it

disseminate into the world, into new products and so on, doesn't always work.

In the most recent Indian election, there was a surprising turnaround, a reversal of

fortune for one of India's most talented leaders, Chandra Babu Naidu, in the state of

Andhra Pradesh. He had marketed this other view of innovation, of how India should

lead the high-tech revolution, and how government policy ought to safeguard and

promote it and so on and so forth. The Indian electorate in a resounding victory, as

many people saw it, for popular democracy, said no thank you, that's not the way we

want to go. There's some other model of connecting technological progress to the

needs of people that you've got to present to us. Now, I'm not enough of an Indian

political scientist 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 tocollect the facts on the ground about what is going on in these countries in terms of


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how people are seeing the nature of the technological progress that's being laid upon

them.

To come to something that I'm much more familiar with, the biotechnology politics

material that James was kind enough to mention, here it's a north-north kind of case

study that bears reflecting on. American companies like Monsanto were science-based

companies considering themselves at the leading edge of revolutionary product

development in a burgeoning new area of technological innovation. It turns out that

Monsanto's ideas about how to market its innovative products failed resoundingly

when those products came to Europe, and perhaps will fail in different ways as that

model of innovation tries to make inroads into Africa and other places as well. And

what was the nub of that failure? I mean, it's not the case that scientists failed to do

their job. The innovations came out of leading molecular biology, genetics and so on.But I think what Monsanto had failed to reckon on is that successful products have to

fall into 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 of ideas is the

imaginary. What is the social and cultural imaginary into which an innovative product

falls? Why is it today that Nokia has much more success than nuclear power? It has

something to do with the cultural imaginaries into which the products of our

innovative capacities are able to embed themselves. European farmers, European

publics, European consumers were not able to take on board happily and without

contestation the kind of agricultural product development that American commercial

biotechnology was putting before them.

If there had been the right kind of communication, not from industry to industry, but

from industry to consumers, then a different kind of innovative trajectory might

actually have gained a foothold in the United States, before expensive mistakes were

made and before people had to learn to backtrack. And it's of course not uninteresting

to me that Sainsburys as a food marketing chain proved to be, in some sense, a wiser

manager of innovation by deciding to follow very different policies with regard to GM

products from the official US government position at the time.

So I think that the plea I would make as Demos goes on with itsAtlas of Ideas project,

and as that project interfaces with policymakers in industry and in government, not

only in the UK but in the countries that the UK 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 model or even a modified linear

pipeline model in which one begins with the investment in science and stresses

measures like numbers of patents and numbers of engineers being trained. Nobody in

this room is unsophisticated enough to think that those numbers by themselves mean

anything.


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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 market that Charlie Leadbeater reminded us must be co-constructed

along with the knowledge, but they are actually innovators in and of themselves.

People figure out when they get the technologies how they can use them in novel and

interesting ways. And sources of innovation then emerge from the wider

dissemination of these products among people who have the knowledge to make use

of them.

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 industrial revolution which the UK

spearheaded went hand in hand with the rise of a middle class that was able to make

use of the products that the industrial revolution brought into being. So we need,today, a thoughtful re-enactment, if you will, on a global scale of this kind of very

dynamic multi-faceted industrial revolution. This set of industrial revolutions we're

living through is every bit as much a societal revolution and not just a revolution that

begins in the scientific labs. So while I'm totally in favour of the language of science-led

innovative knowledge economies and societies, lets keep in mind that in the end those

societies are only going to be as robust, as sustainable, as democratic as the people for

whom these innovations and these discoveries are intended. Thank you.

James WilsdonSheila, thank you for those very helpful thoughts and challenges that the Atlas project

will need to grapple with as we get underway. We're running out of time so I think wemay take just a quick round of comments from the floor. In the second session we'll

have more opportunity for debate.

Floor speakerTo what extent you think we are constrained by cultural, political factors? Charles

Leadbeater, you looked in Up the Down Escalatorat the impact of pessimism on

society today,. Are there cultural and political differences between the north and

emerging economies in Asia and the impact that these have on scientific and

technological development?

Qiming Wang, Chinese EmbassyI'd be very interested to see any comments comparing India and Chinas science and

technology and about any differences in those two countries in respect to the West.

And why.

Louis Turner, Asia Pacific Technology Network.You're keeping Japan out of this. Could you throw out a few ideas about what

judgements you have about Japan? 10 or15 years ago, there were all these arguments

about how the centre of gravity of certain sciences was going to Japan. That was the

sort of common wisdom then. What's different between Japan, China and India?


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James WoudhuysenI wonder if Lord Sainsbury could go into a little more about science as a tool for

diplomacy in relation to climate change. The London Assembly has just looked at the

Thames Gateway development and flooding, and the Environment Agency has warned

of flooding. So clearly we need to change the prism through which we look at so many

things today. What do you mean by science as a tool for diplomacy?

Anne McLaren, University of CambridgeI was interested by the mention of a possible new ethics of science, which I think is

going to be very important. But what strikes me as interesting is that the ethics of

science that I have come across in China and South Korea is very similar in its

pragmatic approach to the ethical approach in the UK, and different from other parts

of Europe, different from the United States. So I think that augurs well for futurecooperation.

James WilsdonThank you. We've got a good spread in just five questions there. Can I invite the panel

to offer a brief response to one or more of those questions. Charlie, we'll start with you.

Charlie LeadbeaterWell, first of all on this question of culture, I think the Indian High Commissioner put

it well, that India is not a tired country. Often in Europe things can feel quite 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 andthe sense of the future. The danger is that that all gets translated here into a kind of

pessimistic defensive politics. Part of what we're doing, I suppose, is to explore why

that shouldn't be so.

On Louis Turner's question about Japan, I'm speaking as someone who went to Japan

precisely to try and find that out just as the bubble burst. I spent my time trying to find

where things were happening, only to find that the bubble was burst. So it may be that

this is absolutely the right time 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

became too focused on particular mechanisms in Japan, about particular ways of

working. We became too obsessed with particular things that the Japanese were good

at which they are still fantastically good at quality and incremental innovation,

without realising our own strengths.

During the first Gulf War, there was a huge debate about the technology of Korea and

Japan, and then in the following decade, the US semi-conductor industry resurged on

the basis of radical innovation. So I think that one of the lessons of all of this is that

there are many different ways of being a knowledge economy. There isn't just a

Japanese way or a Finnish way or a Silicon Valley way. There are many different routes

into it.


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And in regards to the question from the gentleman from the Chinese Embassy, one of

the dangers about the debate is that politicians lump China and India together into

some amorphous great threat called Chindia, which is an amalgamation of the two.

But they are very, very different. Fascinated by one another but very different. Just the

politics of how science and technology is organised, the history of the way that it's

been approached, these are very different places which mean that getting a subtler

understanding, as Lord Sainsbury said, is absolutely critical. So I think the over-riding

thought for us is to come back to this sense that there are many different ways of being

a successful knowledge economy. There isn't a single recipe. And that we must find

our own in a much more complicated world where there will be many more players.

Lord Sainsbury

Well, dealing first with comparisons of China and India, I think there are two differentfactors. The first has to do with the educational systems. I think you could characterise

it that China has a very broad educational base. That is to say that it has very high

levels of primary and secondary education across the country. It's not so good in

higher education, it's put less resources into higher education. India, by comparison, is

less good in terms of the basic education across the country, but has very high levels of

graduate education and has some remarkable higher education establishments in

terms of the Indian Institutes of Technology. So there is a slightly different balance

there.

On top of that you've got the fact that I mentioned earlier: the huge numbers, in both

countries, of scientists going to America and underpinning American research. I thinkinitially there have been more of those people come back to China. So there are very

high quality Chinese scientists coming back to China. I think that's less true in India

but I believe it is now happening. And then of course you always have cultural

differences, which are interesting in this also.

I think the Japanese situation is worth reflecting on, and it's one of the reasons that I

think you need to take a rather sober view of these issues, because everyone, including

myself, said we have to look at what's happening in Japan, they've discovered whole

new ways of doing things and we have to learn from it. Some of that was true, some of

it wasnt really very new or different. And they also had some problems. It comes back,I think, to this situation of a country which puts together a market economy and

where science and technology is imported. You can grow very fast, and that looks from

the outside enormously dynamic, as if people are inventing new things. Therefore, you

have endless books which talk about Japan as number one, learning from Japan, what

we must do to keep up with Japan.

We are now about to enter the China is number one era. We've just had the first book

on what we can learn from Chinese management methods. I think one should be

rather sceptical about this. I suspect there is very little we can learn from Chinese

management. What they are doing is just using ruthlessly and extremely well their low

wages plus foreign technology to grow very fast. So, I think one should be aware of


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what's happening, and always be a little bit sceptical about claims of wonderful new

ways of running the economy, or running companies in these situations.

Finally, the question about science as a tool of diplomacy. The Foreign Secretary and

the Foreign Office have taken on board this idea that a lot of the issues in diplomacy

now have a science aspect to them. So when we are talking about climate change at a

Foreign Secretary or Prime Minister level, it is extremely important that that is

underpinned by knowledge of our science and technology position and what is

happening in the other countries. It's about both, in the case of climate change, the

actual science and technology involved, but it's also about other issues like, for

example, the Foresight programme we did on flood and coastal defences. I think it's

very interesting how Sir David King, who's made this whole issue of climate change

very central to his work as Chief Scientific Adviser, is now constantly advising thePrime Minister and the Foreign Office on these issues, so that our diplomacy in these

areas is well founded. What it tells you is modern diplomacy often now has to take on

board issues which have a very strong science base.

Kamalesh SharmaThe first question was a very pertinent and interesting one. He's absolutely right. I

mean, your elitist dreams can run away with you. You can run away with them and

leave the people far behind. But if there is no cultural or political or social ownership

of what your policies are, then they are not sustainable. He's absolutely right. I'd like to

make three points. The first is that there is a very wide base in India of entrepreneurial

excitement and talent. I was astonished recently to learn of the number of businessschools in India, maybe more than a thousand, which obviously are of very variable

quality. But this means that no matter where you are in India, if you are in the

burgeoning Indian middle class, you can join a business school and learn whatever you

can. So there is a widespread process of entering the new economy. And you can see it

also in the mergers and acquisitions which are happening abroad. It's a naturally

entrepreneurial educated community. Certainly the middle 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. One of the biggest programmes we have is for thedigitalisation and eventually taking the intellectual property out on thousands of forms

of traditional knowledge. They were even trying to take out a patent on yoga postures

in the US. On many of our traditional items, weve challenged successfully, so people

see that were not just, you know, using knowledge for the sake of joining 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

many between the digital divide and the development divide. Is one relevant for the

other or not? And I think India has demonstrated, certainly to the satisfaction of its

own people, thanks hugely to the contribution of our president, whos always on this

team, that yes you can use the highest technology to solve your ancient developmentproblems. For instance, same boat, same fish, same fisherman, but through the satellite


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he is guided to where to fish, and then through mobile phone he is told where to bring

it and sell it for the highest price. The connectivity revolution in India is based on the

mobile telephone. The off-take of mobile telephone in India today is an astonishing

hundred thousand per day. And this is going to villages and everywhere. Its getting to

be a very, very highly connected country.

Literacy. I spoke about scientists in Europe. To educate Indians in primary school, and

the Ministers quite right, thats a deficit sector, you need another million of teachers.

So what were trying to do is tele-education through our satellites and also computer

literacy and these are two very successful programmes. We are trying to convince the

people that this is not a schizophrenic science policy. It has something for everybody.

Sheila JasanoffIll just say one thing about ethics and pragmatism and that is that Im always a little

bit nervous when people start celebrating pragmatism, because behind it lies a

question about pragmatic in whose view. Pragmatism works when theres considerable

agreement about the means and the ends to be used in any given context. It may seem

to us that other people are being equally pragmatic, but if we look behind their

particular accommodations we might find a very different set of values animating their

pragmatism from ours.

So I think that one shouldnt underestimate the kind of rich politics that underlies

what the American status quo now looks like with regard to something like stem cells,

for instance. We may look less pragmatic on the surface, but its possible that behindthe lack of consensus, certain rather important questions are being put on the table

and being worked out in more detail than might be the case if we reached a very

pragmatic settlement early on and decided to go forward without investigating those

questions. So Ill just leave us with that little bit of unease about what seems on the

surface a happy accommodation that the word pragmatism evokes.

James WilsdonGreat. Well its always good to head into coffee on a note of unease. But before we go,

please join me in thanking again our four speakers for such a thought-provoking start

to the day.

[Applause - end of session]


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James WilsdonWelcome back. In this session, were going to begin with a keynote speech from Alec

Broers, and then were going to move into a panel discussion where hopefully therell

be more opportunity for questions and comments from all of you.

So just to introduce Lord Broers. Alec Broers is President of the Royal Academy of

Engineering. He chairs the House of Lords Science and Technology Committee and of

course he gave this years Reith Lectures, which Im sure many of you heard, on the

theme of the triumph of technology. And it was his references within some of those

lectures to the changing global geography of science that sparked our interest and led

us to invite him to elaborate on some of those thoughts in the context of todays

discussion. So were really delighted that hes here. Alec Broers.

Lord BroersThank you very much. I think much of what can be said about this situation was said

before the break, so Im not going to reiterate all of that. But Im going to put my

particular twist on it. Ill be borrowing from what I said in the Reith Lectures on

occasion, but I still feel that my point of view, which I know is shared by a lot of

engineers and technologists, is not shared by many people in this country, although we

get sort of lip service for it. Clearly technology has become global. No single company

makes all of its products, its got to look all around the world. Innovation goes on all

around the world. We dont disagree about any of these things. Where I think we

disagree is the balance between science and engineering and or technology creation.

Most modern technologies are created by bringing together and developing

capabilities which already exist. Few emerge from fundamentally new ideas. The

genius lies in the capability to bring these things together, and there are countless

examples to illustrate this. The long sought mobile phone was made a reality by

bringing together mathematical concepts of cellular networks, advanced ultra high

frequency radios, low power micro processors and improved batteries. The mobile

phone was not invented, although buried within it are innumerable inventions. The

hybrid car combines the efficient modern internal combustion engine with pollution

free electric drive and systems that recycle the energy dissipated in braking. All

existing capabilities but in a novel and powerful combination. The modern jet airliner

combines hundreds of individual capabilities in mechanical design, aerodynamics, jet

engines, electronic communications and navigation systems, and the airports that they

serve are wonders of modern civil engineering. Other examples easily come to mind:

ocean oil drilling rigs, electronic stock exchanges, the global positioning system, the

apparatus used to decode DNA, the iPod and so on all came about through a process

in which established capabilities were further developed and combined in new ways.

They did not emerge directly from new science.

A strong science base is essential to modern society but its not sufficient if one wants

to be competitive in producing state of the art technology. Thats my position. Lord

Sainsbury said we dont have as many engineers as China or India, but weve got lotsmore scientists. I think weve got the balance wrong. Of course we need the scientists


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and we need the science, but weve got to have the really bright people on the other

side. The countries that are going to succeed in the world economically in new

economies are going to be those where the brightest of the young people go into the

creation of new technologies. It needs just the same power, intellectual power.

We had pictures of a micro processor chip up here before. Thats my game. Ive been

in that game since before it began. The intellectual power that was needed to put those

20 million transistors in that complex micro processor is about 50 times more in my

estimate than what Bardeen, Brattain and Shockley did at Bell Labs in 1948. It doesnt

even use the transistor they came up with. Now their work was brilliant, but they were

doing a technological thing, they were being paid by AT&T to find a solid state version

of JJ Thomson, Langley and Deforest vacuum valve. They werent seeking the answer

to Gods universe, they were doing technology.

The laser is always quoted, what was the laser? The laser was the thing that followed

the maser. What was the maser? The microwave amplifier, maser stood for microwave

amplification through stimulated emission of radiation. It was a technological device

solving a technological problem.

So I think we dont quite understand this. The institutions and places in this country

that are outstanding are those where our outstanding young people go. Our science

base is one of them and I wouldnt want to have that change. The City is another. Lets

face it, and we shouldnt really say it here, Alf, should we but I dont think we can say

at this stage that we are truly world leading experts and excellent in technology

creation. We have some very bright spots, we have some very good companies, but I

dont think we can say that generally.

Now this is about China and India, the changing geography, because its no accident

that we see these countries emerging in innovation. I worked for IBM for 20 years and

I spent the first 15 years in research, and then I was in development. Its another thing

I heard again this morning that I dont resonate with. In Europe, R&D is all one thing,

I mean to me, theyre not. I worked in research and then I moved to development:

different mindset, different activity in many ways. The interesting thing is that those

pure research labs, like the IBM Thomas J Watson research lab had a lot of purescience going on in it. We thought that the company really owed it to society. Bell Labs

were the same the background radiation in the universe. In Yorktown, we had

people looking at gravity waves, fractors, galaxy formation.

Now in my opinion looking back as somewhat of a cynic, or with scepticism at least on

those days, is of course AT&T and IBM were in effect monopolies, so they could afford

it. Companies cant do that anymore and the interesting thing is that there arent

corporate research labs doing fundamental science almost anywhere in the world now.

Its best done in universities, but Im not going to diverge into that one. I just want to

compare IBM with Intel for a while because I think the worlds gone towards an Intel

model from the model we had at IBM. We had a research lab, that research lab had itsown semi-conductor fabrication facilities. When we wanted to transfer a technology


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we had to take that technology and transfer it into a development lab silicon line.

Having done that, we had to transfer it into manufacturing. This turned out to be

inefficient, hugely expensive. Fortunately we had lots of money and we could afford it.

Intel has never done things that way. They have engineers modifying and playing with

processors on their manufacturing line during the off-hour. They gradually build up a

series of changes and modifications, improvements that are processed. They try out

new things here and new things there. When theyve got a great new accumulation and

they can shrink to a new dimension they build a new facility. But they do it more in

the evolution of technology, so its improving what already exists. Its very much what

the Chinese have already done.

Look at China Mobiles lab in Beijing. I think it was a brilliant move on their part.They invited in Nokia, Ericsson, Motorola, Alcatel, and they gave them all space. And

then on the top floor they gave twice as much space to Huawei. And look where

Huawei is now, doing extremely well, caught up with world technology with rapid

speed just as has happened all over those place in those technologies in China and

India. Its utterly phenomenal the 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 intellectual property.

I was asked to tell this story. We kicked off in Cambridge this week a programme for

educating or interacting with senior CEOs of Chinese companies: some 30 very senior

Chinese industrialists and business men. And I talked to them, as did John Browne

and Norun Sanderson and Stephen Green, and they asked me, 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 development of IBMs 3090 system. I reckon that by the time

the 3090s were really launched in 83-4, IBM had invested some $4.5 billion of R & D

in those systems. At about the same time, a Japanese company, through industrial

espionage, stole the design manuals for those computers. That company was taken to

court and was fined $400 million. But of course they got ten times that in R & D

development.

If we look around the world at the moment, I dont know whether its the risk or thecompetition, but I dont see those giant technological projects so much anymore. I

dont know whos doing that today. The closest thing perhaps is in some of the semi-

conductor and drug companies. They would claim, and perhaps they are spending that

sort of money on developing new projects on really long term things. But if technology

is to proceed at the phenomenal pace it proceeded in the 20th century, there will have

to be those giant projects and those involved in them will have to be able to get their

money back, or they plain wont do it because there wont be any business sense in

doing it.

Just to finish up on ethics and risk. I have been immensely impressed with the genuine

interest and willingness to commit to these issues of ethics and ri

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