The government has outlined plans to promote innovation in British industry by harnessing the power of public spending.

Its new Innovation Nation White Paper argues that innovation is essential to the UK's future prosperity and is targeting £150 billion at industry.

The paper, published by the Department for Innovation, Universities and Skills (DIUS) sets out a number of practical measures to ensure that businesses and people in the UK are best placed to benefit from the new opportunities and prosperity created by the demand for innovation. Immediate steps include a commitment for each government department to publish an Innovation Procurement Plan as part of its commercial strategy.

But Dr Richard Barker, director-general of the Association of The British Pharmaceutical Industry, said the government's ideals were “at variance with the current National Health Service reality of providing patients with modern medicines”.

“We are seeing constant pressure from NICE and local NHS decision-makers that prevents doctors from using the most innovative treatments and persuades them to use older generic medicines. Further downward pressure on prices would be an additional disincentive to the development of innovative medicines in the UK, especially given the intense global competition for research activities,” he said.

But Iain Gray, chief executive of the Technology Strategy Board, countered the criticisms. He said: “The pharmaceutical business should be pleased beyond that in the extent to which the White Paper promotes the demand side of government on procurement".

“The important thing now is that this is not just empty rhetoric - I see the Technology Strategy Board having a key role in the implementation. If things are no different in two years time then they will be valid criticisms,” he said.

Unlocking talent
Secretary of State for Science and Innovation, John Denham, added: “We want to make Britain the best country in the world to run an innovative business or public service. We can do this by investing in people and knowledge, unlocking talent at all levels, by investing in research and in the exploitation of knowledge and by using regulation, public procurement and public services to shape the market for innovative solutions.”

Other initiatives in the White Paper include innovation vouchers for small and medium-size businesses to work with a educational or research organisations develop products or service, and a doubling in the number of knowledge transfer partnerships between businesses and higher education.

By Rob Finch