By Sarah Newton
With the Autumn Budget and the Industrial Strategy White Paper coming out in the last few days, it’s easy to suffer from information overload. Here’s a quick summary of both, and what they mean for innovation in the West Midlands region.
Both the Budget and Industrial Strategy give innovation a high profile and promote an increase in growth and prosperity across the UK, with the aim of granting local areas more decision making control. In the West Midlands, we are already benefiting from an elected Mayor and a second devolution deal has been agreed in principle to address local productivity barriers. The deal includes:
- £6 million for a housing delivery taskforce
- £5 million for a construction skills training scheme
- £250 million allocation from the Transforming Cities fund to be spent on local intra-city transport priorities.
Four Grand Challenges have been set in the Industrial Strategy which aim to put the UK at the forefront of the industries of the future, highlighting the importance of demand led innovation. All four themes align to the strengths of the West Midlands highlighted in the Science and Innovation Audit.
- AI and Data Economy
- Future of Mobility
- Clean Growth
- Ageing Society
The government’s plan to build an economy fit for the future has been laid out. The Industrial Strategy has five central themes which shape the key policies:
- Business Environment
Importantly for the West Midlands, the themes published in both the Budget and Industrial Strategy reflect the enabling competencies and market strengths highlighted in the recent WM Science and Innovation Audit. This means there are great opportunities for the West Midlands ecosystem to be taken.
There will be greater backing for innovators and research and development (R&D). This will include a £2.3bn investment in R&D and increasing the R&D expenditure credit to 12%. This evidences the government’s ambition to raise the level of investment in R&D to 2.4% of GDP by 2027 through public and private sector funding. Innovation will also be the focus of the Industrial Strategy Challenge Fund which comes with £725m of investment.
In order to try and combat the skills and jobs required for a modern economy, a new partnership will be initiated between employers, unions and the government to deliver a new National Retraining Scheme to help people adapt to the changing world of work, beginning with a £64m investment for digital and construction training. In addition to this, £406m will be invested into maths and technical education.
The National Productivity Investment Fund will be increased to £31bn, supporting investments in transport, housing and digital infrastructure.
In digital technologies, £21m will be invested over the next 4 years to expand Tech City UK, creating a Tech Nation. A regional hub will be set up in Birmingham and will support regional tech companies and start-ups. To further boost digital infrastructure, over £1bn of public money will be invested, including £176m for 5G and £200m for local areas to roll out full fibre networks.
In further connectivity funding, £5 million has been awarded for an initial trial to test 5G applications and deployment on roads, including maximising productivity benefits from self-driving cars. This builds on the connected and autonomous vehicle trials in the West Midlands.
Sector Deals will be launched between government and industry aiming to increase sector productivity. The first themes are life sciences, construction, artificial intelligence and automotive.
£20bn will be invested in innovative and high potential businesses, including a new £2.5bn Investment Fund, incubated in the British Business Bank. Additionally, a review will be launched of the actions that could be most effective in improving the productivity and growth of small and medium-sized businesses.
Local Industrial Strategies will be agreed that build on local strengths and deliver on economic opportunities. A £1.7bn Transforming Cities Fund will aim to improve local transport connection with £250m awarded to the WMCA.
Government will support industry by providing £34m to scale up innovative training models, including for construction, across the country, including a programme in the West Midlands.
£42m will be provided to pilot a Teacher Development Premium. This will test the impact of a £1000 budget for high quality professional development for teachers working in areas that have fallen behind.