In the context of our economic landscape - the knowledge economy - innovation has progressed to mean not simply the introduction of new methods and ideas but, critically, their exploitation.

To compete against aggressive new economic entrants such as India and China, the UK is going to have to develop new ways to exploit products and services, and to become adept at innovatively exploiting technology for socio-economic gain.

Government has shown a commitment and willingness to forward the innovation agenda; indeed it has placed innovation at the heart of future economic growth.

In December 2003, the government published Competing in the global economy: the innovation challenge, a document that set out government strategy to improve the UK's innovation performance. Its principal aim was to make the UK the leading major country in Europe in research and development (R &D) within a decade.

The report identified six areas of priority, with a series of commitments under each:

• Encouraging knowledge transfer between business and science, from business to business, and in collaboration with international partners

• Using government's enormous purchasing power to stimulate innovation from businesses

• Supporting high-level skills and high-performance workplaces

• Innovation as a key driver of economic development in the regions

• Impact of the regulatory framework on the ability of business to innovate: use of intellectual property rights, standards and the design of regulations

• Supporting small businesses and entrepreneurship as key sources of innovation.

In July 2004, the government published its Science and Innovation Investment Framework 2004-2014, and followed this with the publication of the Department of Trade and Industry (DTI) Five-Year Programme, published in November 2004.

The framework sets out the government's ambition for UK science and innovation over the next decade, in particular the contribution to economic growth and public services, and the attributes and funding arrangements of a research system capable of delivering this.

These are positive first steps, but there is still a long way to go. Government and industry must work together to overcome the barriers to establishing the UK as an environment conducive to innovation.

The Innovation Nation? programme aims to take the debate to the next stage, to put innovation in the context of business, government and in the UK as the place we all live and work.

Of the 15 valuable recommendations that have come out of the project so far, one that Intellect will pursue is to encourage government to lead on innovation. We will commit to the following actions:

• To identify parallels between the Innovation Nation? report and the DTI's Innovation Review, to develop a common government/industry innovation agenda

• To undertake a gap analysis of current cross-government policy and action plans, and liaise directly with the DTI and the Treasury to raise awareness of these gaps and look for practical solutions

• To facilitate government in pushing the innovation message out to our members and act as a communicator of information on innovation opportunities

• To feed the findings of the Innovation Nation? report into our Intellect Index, which will help us to effectively select the measures through which we will track the UK's innovation progress. The Index is scheduled for publication in the spring of 2006; its objective is to measure the UK's progress towards a knowledge  economy.

Intellect, representing the high-tech industry, is determined to ensure that innovation is at the heart of the UK's future,  working with government, academia and other stakeholders to raising the UK's innovation success.

John Higgins is director general of Intellect, the high-tech trade association