Look Back in Alvey: Why Support for R&D Is Not Enough

Abstract

This paper contends that government support for Research and Development (R&D) programmes is not sufficient, on its own, to stimulate the development of high technology industries. The paper draws upon the author's extensive experience in British government technology policy, and in particular the Alvey Programme - the UK's strategic initiative in Information Technology - which Brian Oakley directed from 1983-7. The paper outlines the objectives, modus operandi and the apparently less than optimal impact of the Alvey Programme. Though Alvey had important indirect benefits, it improved collaboration between industry and academia, it created a pool of highly skilled technologists, and introduced a range of novel techniques into industry, it has not yet resulted in the launch of many new commercially-successful products. The paper argues that R&D support programmes will be successful only if there is a favourable environment for the commercial exploitation of innovations. Governments can play a key role here - in particular through economic and fiscal policies to sustain an appropriate capital investment climate. In Britain, high interests rates over many years have inhibited investment. Governments can also support innovation indirectly, for example by maintaining and effective communications infrastructure and the provision of education and training.