Goodbye DTI: game, set and ‘DIUS’
No, this is not a misspelling from the rainy Wimbledon tennis season, but a totally new UK government department that has been given the responsibility of addressing the severe skills shortage in the UK and bringing together all the disparate innovation programmes.
The DIUS (department of innovation, universities and skills) will also be responsible for all the development, funding and performance of higher and further education. The new department’s mission is to deliver the UK government’s long-term vision to make Britain one of the best places in the world for science, research and innovation. It is also tasked to ensure that the UK has the skilled workforce it needs to compete in the global economy.
The department will be headed by Rt Hon John Denham MP, the first Secretary of State for innovation, universities and skills. He will promote effective investment in research, science, innovation and skills, as well ensuring that this remains at the heart of the government’s competitiveness strategy.
We hope it would also signal a new mantra for every government department, that it needs to listen more to the needs of entrepreneurs, the industry and fine-tune support programs where necessary and stay away from areas which can be more efficiently run and dealt with by private industry, instead of competing with them.
One such example is the complex and confusing array of inaccessible business support programmes for entrepreneurs and the industry, whose mission has been hijacked as a job creation programme. It may be worth reminding them about why they were set up in the first place: to reach out and nurture hidden talents and entrepreneurs in various communities up and down the country and help them become more enterprising, take more risks, and design support systems that help them back on their feet if they fail for some reason.
Instead they have become closed (‘old boys’) networks, serving the lead generation needs of its consultants and business partners. Those disruptive, innovative, high risks plays are simply ignored or turned away.
Good move, but not yet better
The responsibility for funding university and university research has been taken away from the old DTI, and given to DIUS. Why such an important component of the economy was the responsibility of the trade department still remains a complete misnomer – however, that is academic (no pun intended) as it is about to change now, thanks to a new regime in the UK. A new department of energy, based on the US model, could be the next such step under this new mantra. The DTI could be considered to have been an old fashioned relic from the glory days of an old empire.
It will now be known as the Department of Business, Enterprise and Regulatory Reform (DBERR)
They should have gone one step further and introduced the word ‘de-regulation’ – which would have been much better than ‘regulatory reform’. If they’d done this, the new acronym, ‘D-BEDR’ (where ‘BEDR’ sounds like ‘better’) could have been like a new mission statement for the bureaucrats – with the goal being less regulation, less bureaucracy, less form filling and more listening and matching industry’s needs,. This would be instead of spending valuable public resource on issues like advising the public about firework safety and work-life balance, and instead focusing on market failures, dealing with insolvent companies and ineffectually trying to burst up monopolies and semi-monopolies, as well as look after energy needs and strategy.
DBERR: more than re-branding and a new logo
But apart from the wording and semantics, the new department of BERR is a brilliant move, as it finally tunes the UK into the new world reality, and impending competition from newly emerging markets. This is more than just a re-branding exercise with a new logo. It reflects the new mood and finally realisation that the world market dynamics and key players have changed dramatically over the last 20 years. The re-branding will fast forwarded the massive bureaucracy (that had an annual budget of £8 billion) to match the new reality of globalisation, and capture new ways of doing business in newly emerging markets.
DBERR brings together functions from the former Department of Trade and Industry, including responsibilities for enterprise, business relations, regional development (local RDAs?), fair markets and energy policy, with the Better Regulation Executive (BRE). It will also look after SMEs, which, in our opinion, should have been joined up with innovation, as they both go hand in hand. Although a lot of large companies spend a lot on R&D, it’s the army of small companies and start-ups that exploit new technologies and provide the innovation with its energy and drive.
Overseas trade promotion and encouraging inward investment (UK Trade & Investment-UKTI) will be a joint responsibility of the DBERR and the Foreign and Commonwealth Office.
The department will headed by John Hutton, the first Secretary of State for business, enterprise and regulatory reform. He will provide a strong voice for business and regulatory reform at Cabinet.
DBERR will provide support to the new Business Council for Britain. The council, made up of senior business leaders, will assist the government in putting in place the right strategy to promote the long-term health of the UK economy. All these good wishes will come to nothing if the new Business Council for Britain is hijacked by big companies with narrow interests. As a reminder, they should read Schumpeter’s ‘creative destructions theory’, which will remind them of how new players replace old players on a regular basis – et al Marconi, Plessey and Ferranti, with ARM, Vodafone, CSR and soon to be followed by more (see The Chilli Due Diligence series).
The new department will be responsible for creating the conditions for business success, developing deeper and more effective engagement with business, and with the ability to promote the competitiveness agenda across critical areas of government policy.
The new departments – DIUS and DBERR – will mean the old Department for Education and Skills and the DTI will be disbanded.
We very much look forward to renewed vigour and new programmes, to see how they will evolve and match the needs of the industry and enterprise; and most importantly how they will benefit tech entrepreneurs, investors, SMEs and start-ups. We hope that it will not just end up as another talking shop, a facet which many of The Chilli’s readers have become well accustomed to.
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