Mandelson Seeks Mighty Innovation From Acorn Founder

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The UK must “get more D out of our R and D”, according to the business secretary, who has asked German venture capitalist Herman Hauser to lead the way

Business secretary Peter Mandelson has announced that the founder of tech companies such as Acorn Computers and partner in venture capital firm Amadeus Capital Partners Herman Hauser has been drafted in to advise the government on how to overhaul innovation in the UK.

As part of a wide-ranging speech made this week to the Work Foundation, Lord Mandelson said the government needs to focus not only on tackling the budget deficit through spending cuts but also be driving innovation and growth in the economy. “A credible deficit reduction plan has to be accompanied by an equally credible growth plan. Deficit reduction is a three-sided triangle: spending reductions, tax increases and economic growth, and, of the three, growth is the best antidote to debt both in short term and the long term,” he said.

Key to pushing economic growth is the need to foster technical innovation in the UK, the business secretary explained. “We need to renew our focus on what makes us successful innovators. A decade of sustained investment by this government has rescued British science from its desperate straits in the 90s and secured its position of global excellence, second only to the United States,” said Mandelson. “Our challenge is to transform more of that knowledge into economic gain. To get more D out of our R and D.”

According to Mandelson, the UK’s best hope for improving innovation lies in following the model laid down by the German Fraunhofer network. The Fraunhofer-Gesellschaft was established in Germany after the end of the Second World War to create tighter links between research and industry. The orgaisation owes its name to Munich researcher, inventor and entrepreneur Joseph von Fraunhofer who died in 1826 of heavy metal poisoning related to his experiments with glass making. Innovations that have resulted from Fraunhofer over recent years included contributing to the development of the MP3 music format.

“Over recent years we have built up the basic skeleton of an industrial innovation system in the UK,” said Mandelson. “Our challenge now is to build and consolidate that innovation landscape into something like the Fraunhofer network in Germany which actively connects industry and the German research base. With this objective in mind I have asked technology entrepreneur Hermann Hauser to undertake an urgent but systematic evaluation of the UK’s existing Innovation network to see how Britain can best emulate the outcomes of the Fraunhofer model.”

Funding is also key to innovation, the business secretary acknowledged and said that the government would be looking at ways to extend existing capital being made available to small businesses through approaches such as the Innovation Investment Fund. “We need a new range of public- private financial instruments to step into the historical equity gap and the breach created by the banking system’s reduced appetite for commercial risk,” said Mandelson.

“That is what the Innovation Investment Fund launched last year will in part do – it has already more than doubled its initial £150 million public investment with private funds and its professional independent fund managers will make their first investments this year.”

The business secretary also made reference to the roll-out of broadband networks across the UK and said that government funding would help to drive the development of high-speed Internet access across the UK. “We are implementing plans to stimulate investment in the infrastructure for digital communications. They will extend broadband access to every home and business in Britain in just a few years and extend next-generation broadband beyond where the market alone will build it to serve 90 percent of the population,” he said.

Acorn Computers was established in Cambridge in 1978 and developed computers including the popular BBC Micro, Acorn Electron and the Acorn Archimedes. The company was relaunched in 2006 as a seller of notebook computers.

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