Every now and then we all come across someone whose opinions are
difficult to counter and who is so blindingly obviously correct you feel
obligated to ensure they’re heard loud and clear so that others can benefit
from their thinking as well.
In this instance I’m referring to the exceptionally talented
economist Professor Mariana Mazzucato of Sussex University. If you’ve never
heard of her then I strongly recommend that if you have any interest at all in
innovation then you familiarise yourself with the work she’s been doing on the
connections between state support for
research and the economic benefits that
can bring in terms of growth, employment and so on and so forth.
Mind you, if you’re in the energy sector and
you’re not interested in innovation then you’re probably in the wrong job! In her book “The Entrepreneurial State” which I’m hoping I’ll be
getting a copy of for Christmas, she explains very lucidly that one of most
iconic pieces of modern gadgetry – the iPhone – would not have been developed
if it hadn’t been for US Government funding for technologies including the
touch screen, the internet itself of course, GPS, micro-processors, speech recognition
and others.
She also explains that the smart thing that Apple really did was to
recognise the potential of all these technologies and cleverly assembled them
in a package which under the iPhone brand has become a global success. Others have of course done pretty much the
same thing since just as successfully as Apple but that doesn’t change the fact
that most of the core technologies were developed in US laboratories with US
taxpayer’s money.
Of course the US Governments role in the development of new
technologies goes back a long way. Their
space programme including the historic moon missions resulted in a whole range
of new technologies including the ubiquitous Teflon coating used on non-stick
cooking pots.
In the energy world the US Government has also been funding new
technologies both via their own research laboratories and through collaboration
with private sector companies. For example, the US Government through its armed forces is having a
positive impact on the development of technologies such as biofuels by funding
both its development and its trials. Biofuels
isn’t of course the only area in which the US Government is involved.
Now, what I find interesting about the US approach is that their
government believes it should have a major role in technology development and
that it considers it as a form of long term investment. There is then a semi symbiotic relationship
between the US Government and its industry which seems to work well and to
their mutual benefit.
It’s not however a perfect relationship in that as Professor
Mazzucato points outs “We have socialised the risk of innovation but privatised
the rewards” In other words, companies
such as Apple which have benefitted so much from publically funded research
haven’t provided a financial return to government. In fact I would add that in Apple’s case and
indeed other companies as well they actually provided a kick in the particulars
for their Government by manufacturing so much of their product range overseas
in communist China and consequently paying far less tax than perhaps they
should have.
So why am I so interested in all this? Well apart from the fact that the policies at
play here are extremely interesting and I’m (sadly) fascinated by that stuff,
it just so happens that Research Councils UK have just published their “Energy
Research and Training Prospectus” which is somewhat optimistically entitled “Investing
in a brighter energy future”. So, I read
that with a view to trying to understand to what extent it might satisfy
Professor Mazzucato’s criteria for the state being the source of a range of new
technologies with real commercial potential around which might lead to a UK
energy technology revival or – as our glorious Chancellor promised – the
rebalancing of the economy.
Bearing in mind that the Prospectus includes the contributions from
not just the Research Councils themselves but all other public sector sources
including the Technology Strategy Board, the Energy Technologies Institute, and
the Carbon Trust and DECC then I was really quite astonished at how small the
overall UK budget actually is.
In fact the estimated budget for 2012 was just £288m which
represents 0.025% of GDP which according to the Prospectus authors means the UK
has fallen back to 19th position in the IEA rankings and 14th within
Europe in terms of energy RD&D spend per unit of GDP. This puts the UK just
behind Italy and ahead of Belgium.
Norway – a small, independent oil rich nation on the other side of the N
Sea is 6th.
The Prospectus also reports that in its 2012 review of the UK, the
IEA noted that “the levels of spending do not seem to match the UK’s ambitious climate
policy objectives and its world-renowned academic institutions and capability”
and recommended that “the UK acknowledge and publicly fund at world-class
levels a focused energy RD&D programme to catalyse a broader United Kingdom
innovation agenda that reflects the country’s industrial and intellectual
comparative advantage”.
Some hopes I think because the Prospectus also calculates that the
UK would need to increase its current public sector energy Research, Development
and Demonstration spend by 70% to bring itself back to the median level of IEA countries,
and by 200% to get itself onto the top rank.
They also suggest that “further increases would be necessary if global
energy Research, Development and Demonstration budgets were to be aligned with
the 2˚C climate change objective and, implicitly, UK climate policy.”
So what do we learn from this?
Well it’s now blindingly obvious that most of what comes out of
Westminster in terms of rhetoric on how important carbon reduction, renewables
technology and so on and so forth really are is just that – rhetoric not backed
up with the wherewithal to make anything worthwhile happen.
It’s also now obvious that promises to rebalance the economy and in
particular to build on the new industries of which energy is probably the most
important were just hogwash.
Professor Mazzucato understands the clear link between state funded
research and economic growth whereas Westminster very obviously either doesn’t
or is still ideologically and idiotically opposed to the state doing anything
much.
This attitude is hugely damaging to our industrial potential and
harms our academic standing. It must
change.
(First published in the Press & Journal "Energy" supplement Dec 3013)
