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The British government has pledged to put the commercialization of scientific knowledge at the heart of its industrial policy. The move comes in an ambitious and wide-ranging series of initiatives announced last week, including a white paper on how science can enhance economic competitiveness.

But implementing the initiatives is likely to be controversial. Some ministers in the Labour government are concerned that some proposals clash with the priorities of other government departments.

The white paper (policy document) includes a new £150 million (US$252 million) national venture capital fund to help finance small businesses with the potential to grow, such as high-technology companies. It also includes a £20 million annual Higher Education Reach Out fund to reward universities in England that work with businesses. Universities in Scotland will receive £34 million over three years.

Existing schemes encouraging academics to work with industry are also being expanded, while £75 million for equipment is being given under the Joint Research Equipment Initiative (see Nature 396, 607; 1998).

Some of the thinking behind the white paper is borrowed from the United States. For example, the science minister, Lord David Sainsbury, is to coordinate a series of studies into the extent to which high-technology companies in Britain can benefit by being located in clusters such as those to be found in Silicon Valley or around Boston.

The white paper includes a government-sponsored review of whether publicly funded research establishments are making the best use of intellectual property rights to maximize the commercial returns from research.

Launching the initiatives, Peter Mandelson, Secretary of State for Trade and Industry, said that, as a high-wage economy with high land and transport costs and few raw materials, the United Kingdom's best hope of raising economic growth rates is by exploiting the potential of ‘knowledge industries’.

Many see the white paper as a significant step in the Labour party's shift away from its traditional socialist roots to its present position as a party of the centre-left, comfortable both with increased public investment and free markets. This is a shift that Mandelson personally helped to engineer, and he has strong backing from Sainsbury.

In a newspaper article published the day after the white paper's launch, Mandelson wrote that he was a politician “confident that his white paper marks a turning point in ideology and policy for his party and his country”. The message was plain, he wrote: “Labour has dumped its interventionist past.”

This language, and the emphasis on relying on science to create wealth, concerns ministers with more traditional socialist leanings. These include Michael Meacher, the environment minister, and his boss, John Prescott, the deputy prime minister.

Mandelson and Sainsbury will face one of their first tests over the development of high-technology clusters. These businesses are likely to be subjected to rigorous and lengthy planning applications, particularly if they are to be built in or near rural areas.

Mandelson says he wants planning applications from high-technology industries to be dealt with such that “the national economic interest is taken into consideration”. But the environment department, which oversees the planning system, is anxious that environmental considerations should not be downgraded, according to officials.

A key test of this is likely to be an application by the Wellcome Trust to build a science park next to its genetics research centre at Hinxton Hall near Cambridge. The planning inspector has rejected the proposal. But this decision has yet to be endorsed by Prescott.

Another battle looms over biotechnology regulation. The environment department plans to include more public representatives on its committee of scientists that advises the government on the safety of proposed genetically modified crops.

It also wants applications to grow such crops to be seen by an additional ethics committee. But the Department of Trade and Industry (DTI) is likely to oppose this on behalf of industry, which fears that further regulations will be time-consuming and a threat to economic competitiveness.

This battle will be fought out in a forthcoming review of the structure of Britain's biotechnology regulatory system, also announced last week. The review, to be carried out by the Cabinet Office and the Office of Science and Technology, will include public consultation on the regulatory process.

It has been set up partly in response to the collapse in public confidence in government science advice during the crisis over bovine spongiform encephalopathy, and partly to address public concern that regulations on the planting of genetically modified crops do not adequately address safety issues.

One senior environment civil servant says the spectre of a possible recession is one reason that the DTI is keen to help set up knowledge-based companies. But she says her department will face severe public criticism if environmental and safety considerations are relaxed.