The role of universities in driving UK innovation has been expanded in a wide-ranging White Paper.

The Government has placed innovation at the heart of strategies to ensure that the economy stays competitive, and says that it wants policy closely tied to university talent and research.

After the publication of the White Paper Innovation Nation last week, John Denham, the Innovation, Universities and Skills Secretary, said the aim was to make Britain the "best in the world" for innovation.

"We can do this by investing in people and knowledge, unlocking talent at all levels, by investing in research and in the exploitation of knowledge and by using regulation, public procurement and public services to shape the market for innovative solutions," he said.

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Among the paper's headline pledges is a plan to use the Government's procurement budget of ?150 billion a year to create demand for innovative products and services, but other measures were focused directly at higher education.

There will be ?3 million invested in the provision of 1,000 innovation vouchers each year by 2011 given to businesses as an incentive to commission universities to develop new products and services.

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The number of knowledge transfer partnerships between universities and businesses will be doubled, as was recommended in Lord Sainsbury's 2007 review of science and innovation policy, The Race to the Top.

Also on the cards are a new fund to help further education forge links with business and an expansion of the National Skills Academy network to cover every sector of the economy. Plans for local "partnerships for innovation" between universities, business and venture capitalists are outlined in the White Paper, which also pledges to maintain growing investment in science.

The document highlights some activities that were announced earlier, including a review of intellectual property management and the creation of 20 new higher education centres in areas that lack provision.

Universities UK welcomed the paper's commitment to investment in science and to the expansion of knowledge-transfer activities. It hailed the innovation voucher scheme as an effective way to encourage contact between businesses and universities.

UUK also promised to work with the Government to improve procurement in higher education.

Richard Lambert, chief executive of the Confederation of British Industry, said the paper was "welcome rhetoric" that would have to be backed up with action.

He said: "If we are to meet the economy's requirement for many millions more science, technology and engineering jobs over the next few years - (a task) made tougher by the fact in ten years' time many of the current crop will be retiring - we must raise the numbers studying science, engineering and maths in school and university."

Iain Gray, chief executive of the Technology Strategy Board, also welcomed the "ambitious" paper, which he said addressed issues that were crucial to Britain's meeting such challenges as sourcing renewable energy, handling traffic congestion, delivering healthcare for an ageing population and managing environmental pollution and waste.

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The Government's proposals made less of an impression on the Conservatives. David Willetts, the Shadow Universities Secretary, called the Sainsbury Review an "indictment of the Government's failure on innovation" and the White Paper "an open admission of guilt".

"These belated announcements are useful, but they fail to rise to the scale of the challenge," he said.

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A second paper published by the Department for Innovation, Universities and Skills last week said the Government had made "solid progress" on the implementation of the Sainsbury Review.

The report said 20 of the 72 recommendations made had now been delivered, and it outlined progress against each one. Another update was promised in the autumn.

john.gill@tsleducation.com

PROPOSALS FOR AN 'INNOVATION NATION'

At least 500 businesses across England to be given innovation vouchers to work with universities, rising to 1,000 a year by 2011;

The number of knowledge transfer partnerships to double;

Growing investment in UK science to be maintained;

Knowledge exchange between the research base and business broadened into the arts, humanities and service sector;

The UK Intellectual Property Office to develop a toolkit of model university-business licensing agreements to cut the costs and complexity of IP transactions;

A study has been commissioned to look at how universities should manage IP for their own benefit and that of the wider economy;

A new further education Specialisation and Innovation Fund will be piloted to build the capacity of the FE sector to support businesses;

At least one National Skills Academy to be established in every major sector of the economy;

The development of regionally based University Enterprise Networks;

A drive to promote greater take-up of science, technology and maths at school, college and university level;

New Partnerships for Innovation will bring together universities, business, local government and venture capitalists to tackle regional challenges;

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A regional network of the National Council for Graduate Entrepreneurship will be established.