Over a decade of sustained investment by Labour has rescued science and research in the UK. The UK research base ranks as among the best in the world, supporting business development and inward investment, and is second only to the US on research citations. We are the most productive nation in the G8, per researcher and per public pound spent. By 2010-11, Labour investment in science and research will have doubled from its 1997 level, to over £6 billion.

Supporting curiosity driven research creates knowledge. This in turn generates innovation and creates employment in emerging new sectors.It is clear that a business led recovery, underpinned by excellent science and ground-breaking technologies, will enable the UK to secure strong economic growth. As the economy recovers, we will build on our strengths at creating knowledge in the UK and become even more effective at transforming that knowledge into economic growth. We need more young people to undertake STEM degrees. To enable this to happen we will recruit 20,000 extra undergraduates on courses starting in September 2010.

We are already taking action to make sure that innovative new businesses succeed. For example, we have started to invest in centres of excellence in emerging technologies. Facilities such as the recently launched Stevenage Bioscience Park, the Composites Centre, the Printable Electronics Technology Centre (PETEC) and the European Space Agency’s investment in a new space technology centre at Harwell will play a critical role in commercialising the outputs of our world leading research and developing the platform technologies and industries of the future.

Labour’s Innovation Investment Fund will back entrepreneurs who need capital for their businesses to grow. Financed by £325m of government investment and private venture capital, the fund will support the next generation of technology-based businesses. The fund will be invested in important growth sectors, such as low carbon, digital, life sciences and advanced manufacturing. We have simplified the research and development (R&D) tax credit scheme to further support small and medium-sized enterprises (SMEs). SMEs will no longer have to own any intellectual property attributable to their R&D expenditure as a condition of being able to claim under the R&D tax credit SME scheme. The change will apply to any expenditure incurred in accounting periods ending on or after 9 December 2009.

We will continue helping businesses to fully exploit the commercial potential of their intellectual property. The Intellectual Property Office has introduced a raft of measures to improve the granting of patents and trademarks. These include a fast track procedure for green patents to support the rapid growth of climate-friendly industries. Building on the Hauser Review, which is looking into the role of science in the UK economy, we will ensure that the UK’s Technology and Innovation Centres achieve their potential to commercialise new British discoveries. We will encourage businesses from all sectors to benefit from the introduction of the 'Patent Box'. From April 2013, the Patent Box will apply a 10 per cent rate of corporation tax to income received from UK patents to ensure the UK that remains an attractive location for innovation.

The process of transforming knowledge developed in the UK into economic benefits for the UK must be a key focus of policy in the years ahead. This is reflected in a new commitment to increase our focus on the economic and social impact of research. Through changes in the new Research Excellence Framework, we will do more to incentivise universities to broaden and deepen their links with business and users of research and to think further about the impact they generate. We will provide further incentives for universities to commercialise their research. We will invest up to £25 million in a University Enterprise Capital Fund, which will provide crucial early stage funding for the commercialisation of some of the most promising university innovations.