Why the government’s dreams of techno-nationalist glory are really a throwback to the past

If No 10 is to turn its plan into reality, it needs to learn lessons from recent industrial history

July 06, 2020
Photo: PA Archive/PA Images
Photo: PA Archive/PA Images

In 1963, newly-elected Labour prime minister Harold Wilson vowed to forge national economic renewal in “the white heat of scientific revolution.” But his government soon became side-tracked by other priorities and little came of his big idea. Now, almost 60 years later, Boris Johnson, his Tory successor, is reviving it. But will he prove any more successful at transforming rhetoric into reality?

Reeling off Britain’s past scientific and technological achievements, Johnson envisages its future as a “scientific superpower,” its economy propelled by exuberant innovation and dynamic tech industries. Like Wilson, Dominic Cummings, Johnson’s top adviser and the driving force behind the vision, also wants to engineer a broader cultural shift in government and business that puts science in the driving seat.

Many researchers and academics have welcomed their effort to redress the policy balance. However, some are unsure how much it will produce. Historian David Edgerton, an authority on technology policy, thinks the government overstates Britain’s strengths. He says its innovation rate tailed off in the 1970s, since when it has achieved few blockbuster breakthroughs.

One reason is steady relative decline in its spending on research and development to 1.7 per cent of GDP, barely two thirds of the average for advanced economies. Johnson has promised to catch up by increasing government spending in the next five years. However, it remains to be seen whether that commitment—which depends on businesses sharply increasing their own R&D expenditure—will survive the economic and fiscal damage caused by coronavirus, which would be compounded by a hard Brexit.

Nor is it yet clear how and to whom the money will be allocated. A newly published government “road map” for future R&D policy has been criticised for being longer on aspiration, re-packaged announcements and self-congratulatory hyperbole than on setting out a clear strategic direction and concrete new initiatives.

There are other shadows over the government’s ambitions. Half of UK academic research is conducted through international collaboration, much of it with EU partners. However, Brexit is raising barriers to collaboration and Britain faces exclusion from Horizon, the EU’s flagship joint research programme, if it leaves the transition period without a deal. It is also uncertain whether free data flows with the EU, vital to the cross-border exchange of scientific ideas, will continue.

Britain’s national research capacity may suffer, too. Twenty-eight per cent of its academic staff are from abroad, most of those from the EU. Brexit has caused some to leave, while the number of scientists coming to Britain on official programmes fell by 35 per cent between 2015 and 2018. The government hopes to tempt them back by offering unlimited visas, though it is too soon to tell whether that will be enough.

It is also unclear that the government’s innovation drive is aiming at the right target. Its most eye-catching initiative, a Cummings brainchild, is an £800m British version of the US Defense Advanced Research Projects Agency (Darpa). An offshoot of the Pentagon, the agency specialises in “blue sky” research and the development of emerging technologies.

Though dedicated to military requirements, Darpa has spawned commercial spin-offs that include the progenitor of the internet and Siri, Apple’s digital assistant. However, its contribution to US tech industry leadership lies less in its inventive genius than in America’s dynamic innovation ecosystem. Efficient technology diffusion channels, abundant capital, a risk-taking culture, simple bankruptcy procedures, a society that has long valued science and a large domestic market have all been the key factors enabling entrepreneurs to turn Darpa’s breakthroughs rapidly into big money-earners.

Britain’s biggest Achilles’ heel, by contrast, has been its patchy record in turning laboratory breakthroughs into competitive global businesses. As Johnson put it recently: “We must end the chasm between invention and application that means a brilliant British discovery disappears to California and becomes a billion dollar American company or a Chinese company.”

His answer is more muscular intervention by government. He plans a £1.5bn state-backed bail-out plan, including a £500m investment fund, for struggling small tech companies, and the use of preferential public procurement to generate business for them.

We have been here, or somewhere very like it, before. Previous British and European governments also relied heavily on state investment and preferential purchasing in an effort to build world-class tech industries. With few exceptions—the main British one being Rolls-Royce aero-engines—they failed. Instead, they often bred clientelism, incestuous relationships between government and business and pampered “national champion” companies that were giants at home and midgets abroad. All at great cost to taxpayers.

The evidence to date offers no certainty that the Johnson administration will avoid the same pitfalls. Britain’s record of public procurement of large IT projects has been chequered at best. This government’s botched attempts to develop a Covid-19 contact-tracing app and its recent award, without competitive tendering, of large contracts for protective equipment to a confectionery wholesaler and a small pest control company with no obvious relevant experience scarcely suggest it is improving.

In time, Europe’s former leaders wearied of their costly and unsuccessful efforts to “pick winners.” Led by Margaret Thatcher, they abruptly changed course in the 1980s after concluding that the best way to re-energise their economies was to tear down national barriers, reduce state intervention, throw their national markets open to international competition and enable producers to achieve scale. The result was the single European market.

Today, Johnson and Cummings are determined to reverse that achievement by putting barriers between Britain and the single market back up again; jettisoning the extensive EU laws and regulations, many the result of British leadership, designed to keep it free and open; and severing links with EU institutions and scientific agencies.

Cummings is a history graduate, not a scientist. Instead of indulging in dreams of techno-nationalist glory, he should perhaps spend more time pondering lessons from recent British industrial history and the warning by George Santayana, the Spanish-American philosopher, that “those who cannot remember the past are condemned to repeat it.”