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Lord Sainsbury's London Games Summit speech in full.

Yesterday, the London Games Summit opened with a speech by Lord David Sainsbury, the parliamentary under secretary of State for science and innovation.

Lord Sainsbury covered topics such as the Government's latest initiatives to help the games industry, the problems and challenges ahead and the importance of the sector to the UK economy. Here, the speech is reproduced in full.

Mr Chairman, ladies and gentlemen, as Minister for Science and Innovation at the DTI, I am delighted to be here this morning to speak to you about what I believe is an exciting opportunity for the UK.

Throughout my time as UK Science Minister, I have been impressed by the technical and creative innovation of the games sector. The UK industry has huge talent and expertise and has been behind some of the greatest innovations in games development over the years. It is this innovation and creativity that has helped the sector grow to become a force in the global market for games, and opens up great opportunities for the future.

Tomorrow you will hear from Shaun Woodward, the Creative Industries Minister. The fact that both he and I are attending your Summit underlines our partnership approach to the Governmentās work with the games sector and demonstrates, I hope, our commitment to creating the best possible conditions in this country for the computer games industry to innovate and grow.

A point not missed by the Government is that computer games generated an export value of Ā£488 million in 2003 compared with Ā£256 million from the much higher profile UK film sector. This impressive economic performance resulted in a positive trade balance of close to Ā£200 million in 2003.

We are also at a particularly critical but exciting point in the games industry's evolution. We're seeing the introduction of the third generation of powerful games consoles; a broadening of the market into previously unreached demographics through innovations such as Brain Training; the fascinating things that are emerging in terms of user generated content; and the way that games are increasingly supporting social interactions - an aspect of gaming that I know is particularly attractive to female players.

But along with this comes a number of challenges, of course. The cost of developing for the 3rd generation consoles, the need to find the talent to develop these new games and new type of games, and also - inevitably, perhaps - the likelihood that games will increasingly attract the attention of the regulators in areas such as the US.

So the industry faces both huge opportunities but also huge challenges, and I want to talk briefly this morning about what the Government can do in these circumstances to help the industry.

Government wants to help create the best possible conditions for businesses to innovate and grow, but most of our policies in the fields of education, tax, intellectual property and open markets apply to all companies. There are, however, a couple of areas where I see the need for industry-specific policies that can help you.

First, the Governmentās work on innovation and the Technology Programme and the growing area of using games in "serious applications". And second, whatās being done to maximise the wealth of creative talent in the UK.

The games sector is by its very nature high-tech, entrepreneurial and innovative, and it could make a significant contribution towards our ambitions for raising the industry to more value-added areas.

Thatās why DTI officials are working hard to ensure that the sector is kept very firmly in mind in the development of major initiatives such as our Technology Programme.

For those who donāt know, this national programme, backed by Ā£320 million funding over the period 2005-2008, is a long-term government commitment to assist businesses in developing new and emerging technologies in a competitive market.

The Government recognises that the games sector is an important industry. It is one at the cutting edge of software development and application. We therefore want the Technology Programme to work for you.

That is why the DTIās business-led board that is developing a national Technology Strategy for key technologies is having a day-long workshop with the creative media industries later this month to see if there is a common view on what these industries want out of the Technology Programme.

It is your opportunity to influence the support that may be available under the Technology Programme in the future, including whether such initiatives as Knowledge Transfer Networks can help improve the UKās innovation performance in this area. Let me stress that the Technology Strategy Boardās work is user-driven, driven by industry and the board is made up of industrialists and venture capitalists.

We are also very pleased that there has been a strong response from the games sector to calls for project proposals under the Technology Programmeās collaborative R&D product. We were delighted that the Technology Programme was able to deliver Ā£1 million to Blitz Games and its partners to develop a number of demonstrators on the use of games in "serious" applications. This is an excellent example of what the Technology Programme can do for the sector.

And I am delighted to say that in the most recent call for proposals, in April 2006, two promising projects are in the digital content area and we look forward to working with the consortia involved over the coming months.

Most of you will know that a theme of previous responses has been on the serious application of games. Many of these applications have a focus on training and it is clear to me that this is an area on which industry and Government can work together to get the most value out of the Technology Programme.

But it would be wrong to think simply about the application of games for training purposes. We are also excited about the opportunities for using games technology for a whole range of applications. I was very interested for example in recent suggestions that the PlayStation 3ās computing power could be used during downtime to support scientists trying to tackle disease like Alzheimerās. Grid computing is a key technology area for us.

Serious games looks to me like an area where there might be some valuable opportunities for public procurement to be used to increase the rate of innovation.

The use of computer games technology and content in serious applications is one that has grown over the last few years. Thatās not surprising given the major revenue stream that many predict such applications may offer.

Government too is starting to consider the potential of using games content and technology to help deliver our policy aims. The adoption of games technology by the Ministry of Defence for infantry training or medical decision-making is the best known example of this. And there are some excellent examples of where the Department for Education is piloting the use of games as a learning tool in the classroom.

And I am grateful to Electronic Arts for supporting Futurelab in their work to assess the learning benefits of using computer games in schools. You will have seen the Futurelab report that was published earlier this week, which showed how motivating games in lessons can be.

But I think there is a need for a co-ordinated view of where games are being applied across Government Departments, and I am pleased that the DTI is leading a discussion on joint working on the serious games agenda with primarily the MoD, DfES and the Research Councils.

I was also delighted to see that the UK sector is learning from the experiences of others. For example, a DTI-supported mission of business people and academics visited the US in May to gain an understanding of the latest applications of interactive simulations and eLearning, including game-based learning.

The final subject I want to deal with is skills. The need to attract and retain staff with the right skills is central to the success of any industry. Skilled staff drive up productivity and raise prosperity. It is important therefore that the games industry works hand-in-hand with Government to create the best possible environment in the UK for making games. This is not something Government can do on its own, so I encourage you to support us in this work.

I am always impressed by the commitment of people working in the games sector. But you tell us that it is often difficult to find people you need with the skills to keep your businesses competitive. I therefore welcome the work Skillset is doing to address this key issue for the sector.

An excellent example of the work of Skillset is the introduction of a university course accreditation scheme. Many of you will know that last May Skillset announced that four degree courses had achieved accredited status. I think this is a significant development for the sector, and one can help give creative young students the education and skills necessary to support innovation in your industry.

Accreditation is of course an ongoing process and I look forward to hearing that more courses have achieved this status. And the work that Skillset is doing on apprenticeships for QA testing roles and induction courses to help small companies support new staff are further examples of what can be done for the sector.We look forward to working with Skillset on other activities for the games sector over the coming years.

If we are to solve the global challenges we face and create new jobs and wealth, it will be through science and innovation. And in particular through the efforts of a new generation of creative young scientists. That is why the Government is determined to see that all young people have the opportunity to acquire the scientific and technological skills that will be so vital to our success and competitiveness in the future.

I know from my discussions with you that you believe that too few students are leaving school with even a basic understanding of science. You tell me that this is impacting on your ability to recruit new staff. We need to be doing more to enthuse young people into core subjects like science and maths. In our 10 year Science and Innovation document: Next Steps 2004 - 2014 Budget Report we will be improving our teaching of science and technology in schools. I would like you to help us show them that subjects like physics and maths is essential for entering your industry.

The games industry has faced some difficult challenges over recent years. Many more challenges lie ahead, but I am confident that you will be able to overcome them.

The Government sees computer games as an important part of the industrial future of this country, and we want to create the best possible conditions in this country for your industry to innovate and grow. We all need to understand how this creative jigsaw fits together and to understand what pieces are missing. Only by working together will we have the opportunity to realise the full potential of this industry.

Lord David Sainsbury is the parliamentary under secretary of State for science and innovation.

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