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Title: Our competitive future: building the knowledge driven economy-[Text]

Notes: In the global economy, capital is mobile, technology spreads quickly and goods can be made in low cost countries and shipped to developed markets. British business therefore has to compete by exploiting capabilities which competitors find hard to imitate. The UK`s distinctive capabilities are not raw materials, land or cheap labour. They must be knowledge, skills and creativity. Crucially, this challenge is for all industries, not just new ones. Businesses in all sectors need to exploit new sources of competitive advantage and respond rapidly and flexibly to change. All businesses in the UK, large and small, manufacturing and services, low and high-tech, urban and rural need to marshal their knowledge and skills to satisfy customers, exploit market opportunities and meet society`s aspirations for a better environment. To make the most of its capabilities, British business needs to combine its know-how with finance for investment and a flexible skilled workforce, with a guarantee of a modern infrastructure and macro-economic stability - all this in a world of ever greater pressure on material resources and the environment. Entrepreneurial individuals with the vision to turn new ideas into winning products and processes are also needed. Entrepreneurship is the lifeblood of the new British economy, in large companies as well as small. To encourage a new generation of entrepreneurs, who will create the businesses on which our future prosperity will depend, the British Government will: - create a new Enterprise Fund to support the financing of small businesses with growth potential - including a ground-breaking scheme in which six major financial institutions will provide new venture capital for this type of company - improve the help given to start-ups - providing a new high-quality advice service targeting 10,000 growth start-ups a year in England - change the insolvency laws to give businesses in difficulties a better chance to turning around - look at ways of removing the stigma associated with business failure. Few companies have all the skills to make and market technologically complex products. Successful businesses depend upon strong team work - with suppliers, customers, joint-venture partners, universities and between managers and employees. The Government will act as a catalyst to promote creative collaboration between businesses and within regions. Competition is the sharpest spur to improve productivity and the best guarantee of reward for talent and innovation. A dynamic economy needs flexible, open markets. To make markets more competitive the Government will strengthen the Office of Fair Trading, consider the case for reform of merger policy, step up the pressure for economic reform in Europe, press for the removal of barriers to international trade and oppose unnecessarily burdensome regulations from whatever source. The Government must improve its performance by becoming more innovative. With business a set of competitiveness indicators - the Competitiveness Index - will be created to track British performance and guide policy development.

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