Innovation for growth – balance of national excellence and local need

A recent conference on ‘Research and Innovation in the UK – funding, commercialisation and infrastructure’ started with a summary of the National Audit Office report on R&D spending in the UK, which clearly demonstrates the concentration of public and private R&D spend – 52% of the UK’s spend on R&D takes place in London, the South East or the East of England. The distribution reflects GDP – implying we keep investing in national economic success. The Higher Education Funding Council for England (HEFCE) proceeded to lay out the way that they ensure they invest proven excellence in research, the Research Councils fund prospective research, but largely from proven researchers. Likewise, the Technology Strategy Board (TSB, though notably absent from the platform) as the national innovation agency proudly focus primarily on excellence with their funding within the priority sectors and technologies determined by the Industrial Strategy. Of course limited resources need to be prioritised and it is right to maintain success and excellence and reap the economic rewards as a country.

However, subsequent challenges to the wisdom of an almost exclusive focus on excellence, regardless of geography, were raised during the conference, but left unanswered by the closing presentation on next steps for UK Research and Innovation Policy from BIS.  The first came from Marcus Gibson of the Gibson Index who challenged whether the current focus of public spending on R&D and Innovation was accounting for the thousands of SMEs that are the lifeblood of the UK economy – many of them at the cutting edge of knowledge and technology, but without the voice or resources of bigger business or necessarily the track record. David Hardman of UK Science Park Association and Innovation Birmingham went on to emphasise that much of the countries Innovation is happening in the 3.5k SMEs in Science Parks and Innovation Centres all round the UK, many linked to universities and research centres and a key part of their local innovation communities. Alan Welby of the Liverpool City region LEP specifically flagged the vital role of public investment to strengthen local economies that were ‘behind the curve’, referring to their Knowledge Economy Plan. The LEPs have some resource through European Structural Funds (ESIF) and Local Growth Funds (LGF) to invest in local innovation priorities, but this is small compared to national research and innovation funding; UK direct spend on R&D was £27bn in 2011 (about £10bn from public purse), whilst the total ESIF funding plus match supporting local R&D and innovation activity across all 39 LEPs is likely to be around £0.5bn per year, and only a small amount of RGF funding is likely to be allocated to R&D and Innovation infrastructure.

The Government is due to release an Innovation Strategy alongside the 2014 Autumn Statement.  In the meantime each of the LEPs has some sort of Growth Strategy, and each has recently stated its strategy for using the limited ESIF funds, many with a focus on innovation as a driver for local growth.  Perhaps we can see the LEPs influencing the Innovation Strategy at the national level so that there is a better balance between the current focus on building on and exploiting existing excellence (which needs to be done) and stimulating and supporting research and innovation for local economic growth, as part of the aspiration to see a re balancing of the economy.

Pam Waddell, Director of Birmingham Science City