What Britain needs now is the appliance of science

British technology triumphs rarely become commercial successes. Sarah Arnott reports on one sector's attempts to buck the trend

Functioning TV screens printed into the wallpaper? Touch-sensitive shop displays that update automatically or scroll reviews from the internet? Food packaging that monitors the temperature of its contents and shifts the sell-by date accordingly?

"Printed electronics" might sound like the stuff of science fiction. But the technology that one ground-breaking British developer describes as "software applications for cardboard boxes" is tipped to change the world. And if Britain can capitalise on world-leading scientific research, it will also catapult UK manufacturing to the top of the world league.

At this stage, the technology is in its infancy and Britain is the world leader. But the next 12 months is crucial if the UK is not to succumb to a perennial failure to commercialise on scientific breakthroughs.

"At the moment, the UK has the edge," said Eifion Jewell, at the world-leading printed electronics research hub at Swansea University's Welsh Centre for Printing and Coating. "But we're at a key point now and there's a real danger that we will lose our advantage."

The more entrepreneurial culture in the US and the weight of indigenous industrial giants such as Siemens and BASF in Germany both threaten to outpace Britain's nascent printed electronics industry. And with the industry forecast to grow to nearly £200bn within 20 years, the UK cannot afford to follow the traditional model of creating the technology and then licensing out the manufacturing. "It works for a while, but once the technology matures and the licences run out, then all the know-how is in the manufacturer and we lose out," Dr Jewell said.

The Government has not been blind to the potential of printed electronics. Under the former Labour government, the Department for Business, Innovation and Skills (BIS) published a "strategy for success" last year, in line with wider aims to re-balance the economy away from financial services. But recognising the potential is not the same as ensuring it is delivered, warn industry representatives. Not only is there unease over the impact of looming public spending cuts. There is also concern that the focus remains on high-end research when the key to successful commercialisation will be Britain's 15,000 printers.

"The problem is that the Government's strategy looks at printed electronics as a purely technological advance, but to take it into mass production needs manufacturing," said Terry Watts, the chief executive of Proskills, the manufacturing Sector Skills Council.

Forging links between scientific researchers and the manufacturing community is not the only priority. Work also needs to go into finding buyers. With the technology at such an early stage, efforts at commercialisation suffer from a chicken-and-egg dilemma. Potentially market-making customers such as Unilever and Procter & Gamble may love the concept. But the component technologies are fragmented between multiple, often tiny, development companies, and there are few entrepreneurs to bring everything together and identify the commercial market. So the product remains just an idea. It is here, with its highly entrepreneurial culture and tradition of "business scientists", that the US has a major advantage. And it is here that the Government could make a real difference.

There are some signs of progress. The BIS Technology Strategy Board (TSB) last month created an £8.4m fund for 13 year-long partnerships between technologists and printers to make "demonstrators" that can be used to take the concept to potential buyers. The Northern Way programme – set up by three Regional Development Agencies – is also putting technologists in touch with printers to turn theory into reality.

But the steps are tentative and there is not much time. "We have a window of opportunity where we probably have about a year to get this right or it will happen overseas," said Kate Stone, the founder of Cambridge-based start-up Novalia, which is involved with Northern Way.

"The thing that scares us the most is that we inspire someone abroad and then they beat us to it."

In part, the US advantage is a simple question of size. The market is five times as big as Britain's, and it is home to the majority of the major global brands that will be crucial early customers. But there is also a different mindset. Just as the Government needs to shift its focus from blue-sky research, so do Britain's technology start-ups.

"We tend to have a rolling five-year horizon, with the final product always about to be released the following year," Dr Stone said. "We need to change that mindset: this is not about creating a product with future technology, it is about getting into the market now and evolving into the five-year plan."

The prize is potentially enormous. Alongside massive revenue opportunities, it is also a rare chance to claw back competitive advantage from the East. Compared with traditional printing, printed electronics are vastly expensive, because of the high cost of materials. But by shifting the high cost from labour to materials, the structural advantage of China or India is eroded.

But that is just the beginning. With the addition of printed processor chips, speakers and touch sensitivity, printed electronics can turn all the world's printed matter into an interactive user interface. There are profound implications for the integration of the internet into daily life. But such technology would also create an entirely new manufacturing platform, freed from the limitations of assembly lines building expensive, traditional electronics from components of plastic and metal. "If you don't need to hand assemble things, you can go for any shape or size and just change the software to change their purpose," Dr Stone said.

And with value shifted from construction to design, Britain really comes into its own. "Something we are great at in the UK is design," Dr Stone said.

What is printed electronics?

* Using highly conductive metallic inks and hi-tech printing techniques, electronics can be printed on to any traditional printing surface.

* So far, real-world examples are limited to a tiny number of prototype adverts with flashing colours or moving pictures.

But when the technology is perfected, it could include in-built printed computer chips, speakers and network links. Ultimately, anything that is printed could be turned into a computer.

* Television screens printed into wallpaper are an industry favourite for the wow-factor. But there are more prosaic but equally revolutionary applications just a few years away.

* A key market is intelligent packaging. Food wrappers that monitor the temperature of their contents and reset sell-by dates accordingly could help cut food waste. Similarly drug packets could log when doses are taken and even remind patients if they forget. Microchips could also guarantee the authenticity of high-value products such as cosmetics, printer cartridges or cigarettes.

* Retailers are another big potential market. Printed display units that either flash, or update their pricing information are likely to come first. A second generation could enable customers to interact with displays to find out more information, search for alternatives or access user reviews on the internet.