The news that researchers in Newcastle have cloned human cells has rightly been hailed as a major scientific development, one which may soon permit the creation of transplants for failing or diseased organs. A revolution in health care, with incalculable consequences for human well-being, lies before us.

Yet there is more to this breakthrough, worthy as it is, than its implications for boosting modern medicine. It is also a potent sign that the country has begun to emerge as a global leader in the knowledge economy. We may no longer make the goods that the world desires, but we are acquiring an invaluable expertise which is helping us direct and control that manufacture. The engine room of the world may no longer be run by Brits but there are still healthy signs we have some kind of grip on the helm of global industry.

Consider the NHS: it is putting the finishing touches to the computerisation of the British population's entire health records, an act that should put us in the vanguard of innovative health care, pre-emptive medical interventions, and the testing of drugs. And while our car industry ails, Britain has become the centre of the high tech Formula One racing industry - another component of the knowledge economy.

And then there is the mushrooming high-tech computer games industry in which British companies have revealed a new, welcome strength. Japanese and US companies, like Sony and Microsoft, may have cornered the hardware but UK companies are providing the software and are devising the games that lie at the forefront of IT technology. This is no trivial breakthrough. Computer games today represent an astonishing simulacra of real life and could soon smash down the boundaries between television and computing, creating an entire new media industry in which Britain will lie at pole position.

There are many reasons for this broad range of success. However, it is clear that key components rest with the innovation of our research teams and the backing they now get from government. Thanks to them, Britain is emerging as Europe's knowledge economy leader, a nation with the strongest research universities on the continent, the fastest growing science base and the strongest representation in a host of new technological industries. Of course, much still needs to be done and the government must do more to set out its vision and strengthen its existing support. Nevertheless, it is becoming clear that the creation of the British knowledge 'revolution' promises to be Blair and Brown's most considerable legacy.