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In the red corner – economists battle it out at innovation fringe

Anna Kharbanda

26 September 2012

Throughout history heavyweights have come together to fight about the big issues of the day. From the boxing bouts of Ali v Frazier or Foreman v Ali to the political and budgetary battles of Clinton v Bush and Osborne v Balls. Yesterday’s fringe ( Monday 24 September)  -  It’s innovation, stupid - hosted by the Big Innovation Centre at the Liberal Democrat conference, was no different in leaving its mark. Leading UK economists went head to head to debate the question - Is the government’s strategy for growth working?

Round one and Will Hutton, chair of the fringe and the Big Innovation Centre, set the tone with an economic upper cut to the floor. He said: “We want the UK to be a catalyst for transforming the UK into a global innovation hub. Co-creation is at the heart of this vision. We need to drive the recovery forward through open innovation.” He delivered more punches, this time to the financial system, which he remarked, “Is not fit for purpose. We must reinvent the way we do capitalism.”

On to round two with Professor Birgitte Andersen, director of the Big Innovation Centre, heading for a sure fire KO against IPR and recent courtroom battles, said: “our courtrooms are not embracing entrepreneurship. Intellectual Property Rights are restricting growth. Lawyers always calculate losses, never the economic benefits of open innovation.” She followed with some Big Innovation Centre fancy footwork, and spoke of the need to “tackle growth at its roots”, urged for “more investment in entrepreneurs”, and echoed Hutton’s appeal for “co-creation between institutions to drive the recovery forward”.

By round three Prateek Buch, Acting Director of the Social Liberal Forum, took a jab at the UK’s catapult centres: “Our strategy is mistakenly focused on supply and catapults need to go further.” He added: “We need a sector by sector approach and public procurement should go to more SMEs”.  He later pushed the discussion up against the ropes and remarked: “We need to tap into employees so they have more of a say in the direction of their companies.”

But my highlight for the evening really came in round four. In a true Ali-esque moment of “Floats like a butterfly, stings like a bee. If you dream of beating me you’d better wake up and apologise”, Paul Nightingale, Deputy Director of SPRU at the University of Sussex, challenged some of the preconceptions of the previous speakers. “Our policy on innovation needs to be realistic. Entrepreneurs are NOT the only answer to our growth problem. Small firms may create a lot of jobs, but they also lose a lot of jobs. Incentives matter. Innovations which are new to the country and new to the firm with a focus on skills are important. We need to concentrate on firms that are doing well.” As if that didn’t hurt some of the panel enough, he went on to deliver further blows to catapult centres.

From here the weaving and dancing with the floor began, as Paul Nightingale was challenged by delegates. Some were heavily in favour of  entrepreneurship as the cure to slow growth, others backed catapult centres as incubators for new ideas, and a few questioned how the UK can get better at exporting equity.

As the discussion came to a close, Roger Williams MP (member of the science and technology select committee) offered his thoughts from the political arena and said: “We must accept that some businesses will fail, there are some green shoots. Catapults are a good step and we need to invest more in procurement. I have some great ideas here to take back with me to the select committee.”

And so, from the thrilla in manila to the rumble in the jungle  - Will Hutton closed the clash of the economic titans in Brighton. As Professor Andersen concluded: “We welcomed the growth strategy, but it’s clear it must go further.” Looking ahead to the Budget, how will the government improve on last years strategy for growth and drive innovation? Let’s hope it’s not a case of, “That all you got, George?”