Crumbling Britain: new technology and future projects

Over the last week I have set out some thoughts on how we could build ourselves capacity in the main networks across the downturn, largely using private money. The public sector needs to be a speedier and more helpful regulator, and to spend from within existing budgets intelligently to maximise private sector response.

One of the big issues the government needs to speed is what will be the role of new technology and new projects in the future of the UK? Again this is not a case of the government needing to spend more money. Much fo the development and all of the production can be paid for by the private sector. It is a case of the government being a well informed purchaser of technology for its own purposes, and a good regulator capable of allowing and even initiating the right kind of projects which the public sector can bid for and accomplish.

There are a number of large schemes around on drawing boards and in dreamers and designers minds. The government has set out ten different possible projects as options for harnessing the tidal power of the Severn estuary – but wants to take two years consulting and thinking about it. Two years is a common time period for thought these days, taking decisions beyond the next Election. Some people want to build new islands in the Thames estuary, and some even want to put a new London airport on one, others favour a new bridge between Kent and Essex as part of the package. There are schemes of drawing boards for new reservoirs, new desalination plants, new power stations, schemes for clean coal technology and carbon storage, schemes for more renewable power and greater energy efficiency, schemes for local and micro generation and for more water capture from each household roof. The private sector is alive with proposals to make the world cleaner, greener, more fuel efficient..

Some of these will be developed and hammered out in the market place with no government involvement. Others are large, need a government view and government permits of various kinds. Some need the government to organise competitions around the permits it is prepared to grant, as it will have to create artificial scarcity as part of its planning view. No Minister has managed to bring these issues to sensible conclusions or to provide an overarching vision of the role of technology in solving these network and supply issues, backed up by administrative speed and competence to make something happen on the ground. |Let’s hope sometime soon the penny drops. Technology is in an exciting phase. It can solve some of these problems if government wishes it to.

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7 Comments

  1. Neil Craig
    Posted August 8, 2008 at 2:17 pm | Permalink

    The best way to do new technology projects are X-Prizes & X-Programmes.

    X-Prizes, the simplest & usually the best, involve putting up an award for achieving some technological goal. It is therefore open to anybody from basement inventor to multinational company, though some legal care is needed to make sure the latter is doing this research & paying a fair proportion of its taxes in the UK. It is particularly suitable for off the wall ideas since, unlike all other government projects, if nothing comes of it no prize money has to be paid out.

    An $10 million X-Prize was what got Spaceship One & Virgin Galactic started. The only British government uuse of it is Scotland's issuing of a £20 million prize for anybody developing a commercial sea turbine.

    An X-Project is government funded in advance.

    "Real X programs have certain characteristics, and while they are hardly all identical, we can tease out some common factors.

    First, they are relatively small. They don’t have huge budgets. They don’t attract big attention and they are not good bait for large bureaucratic sharks or big companies. They are not profitable in the usual sense of the word. The payoff to a big company from participation in an X project is nearly all intangible: prestige at least within the profession, and some early technological advantages from having employed people who built and understood the new technologies identified or acquired by the project. Actual monetary gains are small and often negative.

    Indeed, the payoff to everyone: sponsoring institution, contractors, the United States, and sometimes all mankind, is technology and experience and not much else. X-programs do not result in operational vehicles, and X-craft do not fly missions. Most of them can’t. The X-airplanes had no payloads unless you call a stick of Beeman’s chewing gum a payload. [4]

    Next, X-programs have limited goals, and are over and done with in a relatively short time. They are not intended for career building, and ideally there should not be any career opportunities in X-program management. One does the project and gets out. It’s over. There’s no empire to be built because the project doesn’t last long enough to allow that. This is key to X-success.

    Finally, the best X-projects are based in out of the way places, generally unpleasant places. It is no coincidence that some of the best X projects were done at Edwards. No one wants to build empires in the Mojave Desert. Edwards is far enough from Washington, or even Los Angeles, that there is some autonomy. It is also dull enough to encourage work, if only in the hopes of getting the project over with so you can return to civilization. I note that making life in Palmdale somewhat more pleasant than the Spartan existence of Edwards in the days of the X programs is probably a step backward.

    The typical X project focused on a needed technology. Although the technique is applicable to many areas of technology…"
    http://www.jerrypournelle.com/reports/jerryp/gett

    The most important thing with such projects is that they be short term & not a way to keep companies or individuals feeding from the public purse forever.

    Prizes, in particular, tend to encourage the most efficient way of doing something. For example awarding a prize for a Kent Essex link might well produce a tunnel rather than bridge, which the Norwegians have proven far more economic.

    I previously suggested that awarding a set prize per km for overhead monorails would lead to them being produced & the market would decide where the best places to put them were.

    However in this situation & others it may well be more important to overcome government regulations than it is to provide government subsidy. See, for example, the expected 9 year timetable to produce new nuclear plants – 4 years to build them but 5 to get permission to start.

    Here are 30 hi-tech projects I proposed for Scotland. They would mostly work as well elsewhere. http://9percentgrowth.blogspot.com/2006/10/30-sho

  2. mikestallard
    Posted August 8, 2008 at 5:04 pm | Permalink

    Nobody is standing in the way of Progress, I hope.
    However, the question is this: who should do it?
    What about the Universities being left alone to dream and think? Isn't that what they are really for? I do not think, myself, that they are really places where hairdressers should go and learn part-time how to do crimping. It now costs (BBC this morning) some £30,000 to send someone to University. Why not Technology Colleges for different skills, for heaven's sake? Leave the Universities to be what they are – specialist think tanks devoted to excellence and weeding out the unworthy.
    If there is a real need, then (London Eye) people will meet it. If you can get people in paying then people will stump up the money.
    The very last people to do Grands Projets are Government Ministers. Judging by the three pathetic performances of the Housing Minister over the last couple of days, when she cannot even see that a simple yes or no decision is urgent, the current cabinet is not competent to organise anything at all.
    Minister seem to assume that they are all rounders. Be honest – are you? You, John, are good at finance because you have been there and done that. Kenneth Clarke is good at tobacco and William Hague knows about writing successful books. I wonder what the average minister today knows about anything?

  3. Acorn
    Posted August 8, 2008 at 7:11 pm | Permalink

    Forget it John, it is not going to happen. There would have to be a huge portion of national optimism and common purpose to get anywhere near your goal. We have a nation of sixty million cynics, who think that everybody else is getting a better deal than they are; a nation that is over-populated and under-educated.

    We have ruled and regulated – based on spite and envy – ourselves to a standstill. Only a major overhaul of the way we run this country is going to give us any hope of getting out of this mess. The present system has passed its sell-by date. Unfortunately, it has taken ten lost years of socialism to finally prove the point.

  4. Freeborn John
    Posted August 8, 2008 at 7:58 pm | Permalink

    The useful role that government can play in major technology projects is an interesting question. The conventional wisdom pre-Thatcher was that government should ‘prime the pump’ to get major leading edge tech industries established in the UK like nuclear power, jet engines or supersonic travel on the assumption that if these projects were successful the UK would have established an industrial base that would reap long-term rewards. Post-Concorde we rather assume that government is not very good at picking tech winners and should leave this to the market.

    Some Silicon Valley tech majors do not really do much of their own R&D any more preferring to leave it to start-ups. They simply acquire the start-up that looks to have made the right R&D calls and is gaining market traction. If even the most tech-savvy companies on the planet follow such a strategy it must be next to impossible for government to make the correct technology bets.

    The UK state could of course develop a completely hands-off approach, merely seeking to fund UK universities generously and to nurture an attractive low-tax climate in which British and overseas tech companies might prosper. It may be that we can benefit as consumers from whatever fruits are to be had from dirigiste government elsewhere without exposing ourselves to the risk they take. But the government is also a customer of technology and sometimes even the only customer, as in the defence industry. In the extreme case the private sector can only ever do what its one lead customer demands, but government should at least avoid gold-plating specifications such as to price the resulting system out of later export markets. Arguably the success of telecoms companies from smaller countries (e.g. Ericsson of Sweden, Nortel of Canada, Nokia of Finland) has been due to their former monopoly state-owned customer not having the same deep-pockets to indulge all manner of arbitrary dictates that the monopoly phone companies in the bigger European countries (including BT) used to get away with demanding safe in the knowledge that the high end price would be borne by their captive customer base. Future export success for new technologies developed in the UK for which the British government is the main customer will likely depend upon government being sensible in what it asks for and timely as to when it asks.

    The real trick with new technology, which the Japanese seem quite good at, is to study what others are planning so as to avoid already overcrowded glamour projects and those which satisfy no real end need, pick instead concepts that others are ignoring but will later come to realise they do need, be first (but not too early) with domestic deployment so as to build up experience that can soon after be applied in a growing global market, and to be persistent. This never-the-less remains a difficult trick to pull off which, when it is done, is often more through accident than design.

  5. Susan
    Posted August 8, 2008 at 8:06 pm | Permalink

    Mike says he hopes no one is standing in the way of progress.

    What we have at the moment is eleven years of socialism – authoritarian and envious with a bleeding state education, NHS, Police Force, Fire Service.

    Even when the Conservatives win the next GE in 2010 (God willing, there'll be one earlier) there will still be horrid times for the majority of the people – simply because NuLab has ( messed -ed)up so expectedly. No wonder Brits are emigrating at a rate of knots.

  6. Alan Dean
    Posted August 8, 2008 at 11:10 pm | Permalink

    John,

    I have been following your series of posts in investment and infrastructure with considerable interest.

    As this post is talking about a subject which speaks to my professional life (I am a software developer) I thought that I would pose a question to you.

    It is this. What are your thoughts about the IR35 rules for IT Contractors?

    I'm not a contractor by the way, so it isn't special pleading. I'm permanently employed.

    The reason I ask is that it is my opinion that the introduction of IR35 by this government has prevented the birth of a wave of British software companies. Prior to IR35, I knew quite a number of people who used revenue from contracting to provide self-starting launch capital to build businesses. These businesses provided employment by selling products and services in a nation where venture capital and angel funding is far harder to obtain than in the US.

    Regards,
    Alan Dean

    Reply: I opposed it vigorously at the time, and had it on my list of repeals in the Manifesto for the 2005 election. I hope it remains on the list for 2010.

  7. William B.
    Posted August 9, 2008 at 12:04 am | Permalink

    Thank you for this week's series of essays, Mr Redwood, I've found them both interesting and informative.

    In order for any of your proposals to bear fruit it is essential, above all else, that we have a government with courage; courage to admit that big government is obstructive to change and courage to trust the people to do things for themselves. There is no chance of the current government changing after 11 years of constant meddling. I hope Mr Cameron has the guts to grasp the nettle, it is as important for him to do so now as it was for your party to change the course of the country thirty years ago.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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