Government plans high-tech clusters to target global markets

Information and communications technologies will spearhead the government's attempt to grab a significant share of tomorrow's global multi-billion-pound markets, the government said today.

Information and communications technologies will spearhead the government's attempt to grab a significant share of tomorrow's global multi-billion-pound markets, the government said today.

Accepting the Hauser report on the current and future role of technology and innovation centres in the UK, business secretary Peter Mandelson said the government would support the development of a network of technology and innovation centres.

Key industry sectors will be future internet technologies, plastic electronics, software and technologies addressing renewable energy and climate change, satellite communications, fuel cells, advanced manufacturing; composite materials, and stem cells and regenerative medicine.

Report author Hermann Hauser said the UK's science capability was second only to the US but did not translate its leads into market share or really big money.

Speaking to Computer Weekly before the report was published, Hauser said the UK was "strong at the brainy end, not at the low-cost end" of the value chain.

He said the development of "clusters" was essential to his proposed strategy. He also said the risk capital needed to launch world-beating companies could be very low. "For example, a software company doesn't require the capital investment that a silicon fabrication plant needs, and the margins can be much better," he said.

Hauser speaks from experience. He helped start Acorn Computers, the UK's most successful PC maker, in the 1980s, which later became ARM, the chip design house whose designs now outsell Intel's in dollar value. He is currently head of Amadeus Partners, a venture capital company.

ARM was a good example of what he envisaged, but it was rare, he said. "It can be duplicated as model for licensing, but it is very hard to pull off as a manufacturing company," he said.

He dismissed the idea that Britain should repeat the experience of Inmos, the government-backed chip maker. Inmos shut down when the capital needed to upgrade its manufacturing technology was not forthcoming, Inmos then licensed its designs to other chip makers before being absorbed by STMicroelectronics.

A better bet might be what Hauser called "fablets". These are small, highly specialised factories that design and make proof-of-concept products or key components which embody valuable or unique proprietary knowledge as part of a bigger system, as is the case with ARM, he said.

However, because of Inmos, the Bristol/Cardiff area has attracted high tech development firms. HP Labs, EADS, PicoChip and others have set up R&D centres in the "Silicon Southwest", which is now the biggest cluster of microelectronic designers outside of Silicon Valley.

Another advantage of fablets, Hauser said, was that they fell in with the government's "clear vision" of Britain as a low-energy country, both as a centre of technology development and as an energy user.

Referring to the vision outlined in the Digital Britain report, Hauser said government's impact could be shown most in its procurement practices.

"I have spent my life managing companies where capital and equity were crucial factors. Believe me, it is better to have customers than shareholders," he said.

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