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Putting the UK at the cutting edge

The UK Government has re-stated its goal to grow the UK’s combined public and private Research and Development (R&D) investment to 2.4% of gross domestic product (GDP) by 2027. In a Budget dubbed as ‘The Big Giveaway’, the chancellor Philip Hammond recently announced several boosts to public R&D spending. We increasingly recognise the role that ‘place’ has in uplifting regional economies by building on local R&D strengths. So how will the promise of increased spending impact on science and innovation clusters in the UK? And how is this relevant to your business?

Innovation is now well accepted as a major factor in boosting productivity, supporting economic growth and improving living standards. Amongst the Budget commitments was £1.1 billion of additional funding to support the UK’s Industrial Strategy. This is aimed at delivering an economy driven by cutting edge research and innovation. Much of this funding will focus on creating an ecosystem that stimulates innovation and technology uptake in quantum computing, nuclear fusion, future manufacturing and artificial intelligence (AI).

The Industrial Strategy, published in November 2017, recognises that innovation is the bedrock of the UK’s future prosperity and aims to strengthen the UK’s position as a global leader in science and technology. What can you do to make sure that your business can fully exploit these new opportunities?

What is the Industrial Challenge Fund?


Strength in Places

The UK is the world’s sixth largest economy but it displays large regional disparities in productivity. This holds back aggregate growth at a national level, and contributes to significant regional differences in living standards and life chances. Closing the productivity gap between the most and least successful regions of the UK, will inevitably lead to a rise in the GDP of UK plc. By placing this productivity gap at the centre of its Industrial Strategy the Government has recognised that improving the local business environment through more spending on innovation and increased support for investment and skills is a key driver to addressing inequalities across the UK.

In his Budget statement, the Chancellor emphasised the importance of investing in regions to meet the UK’s productivity challenge. As such, a continuing commitment to the Strength in Places Fund was confirmed with an additional £120 million investment. This will support clusters of science and innovation excellence across the UK, enabling them to further develop their strengths and creating an environment that stimulates regional private-sector investment.  Importantly, ‘patient’ private-sector investment is key to securing long-term and impactful research and innovation.

Administered by UKRI, the high level aims of the Strength in Places Fund are to support innovation-led relative regional growth by identifying and supporting areas of R&D strengths. This will be achieved by:

  • Stimulating clusters of businesses that have the potential to innovate, or adopt new technologies in a drive to become more competitive.
  • Enhancing local collaborations that involve research and innovation.  Such partnerships build on the regional economic role of universities, research institutes, Catapults and other R&D facilities. In addition, they engage businesses at the forefront of delivering economic growth through innovation within a specific economic geography.

Outcomes of the first stage of the Strength in Places competition for seed-corn funding to develop full stage projects of up to £50 million are expected to be announced imminently.

Why are innovation clusters important?

Innovation clusters are characterised by three principle components: geographical location, functional relationships, and institutional linkages. They are a group of interconnected businesses and institutions, linked by complementarities and located within a particular geography. The geography of a cluster relates to the distance over which information is shared, transactions occur, and incentives reach. Clusters include a range of service and supply organisations which reach along supply chains, and often across them, extending to businesses that may be producing complementary products or companies that share similar skills, technologies and inputs. Clusters tend to have strong linkages between Civic leadership, industry, and other institutions such as universities, vocational training providers and collective bodies (e.g. trade associations).

Collaboration between universities, the Innovation, Research and Technology (IRT) sector and business can drive localised economic development with a recognised spill-over of skills, knowledge, contacts and experience. Such collaborations often have a snow-ball effect by increasing further, persistent collaborative activity, which in turn leads to more innovation. Maximising engagement between business and the research sector by stimulating ‘clustering’ is a critical part of many Council and Local Enterprise Partnership (LEP) policies. The Government’s continued commitment to the Strength in Places agenda will ensure that ‘clustering’ continues to be an important focus of local and regional growth strategies and funding.

Place, people and purpose – innovation clusters are driving growth across the UK.

The Department for Business, Energy and Industrial Strategy (BEIS) is due to report on the Wave 3 Science and Innovation Audits (SIAs) in late 2018. The SIAs aim to identify clusters of key science and innovation strengths in the UK. Thus ensuring that place-based support is focussed on driving local growth.



Small and micro-business – A key to innovation and growth

Successful clusters contribute to economic uplift by providing high-value jobs, attracting talent and inward investment, and creating the types of new, small businesses that make disproportionately large contributions to innovation, technology uptake, knowledge-sharing, job and wealth creation.

These small businesses are a major driving force behind the UK economy. If a business’ ability to innovate successfully plays an important role in its ability to sustain growth and competitiveness, then developing an environment that facilitates innovation, encourages research-business interaction and allows more micro- and small businesses to establish and flourish is a key factor in the growth of local economies.

What does it mean to your business?

Growing our capacity for innovation by maximising engagement between the research community and industry is critical to increasing competitiveness. It forms the cornerstone of the UK’s Industrial Strategy, and is an important focus of regional and local economic growth plans.

With additional funding of £120 million for Strength in Places together with announcements of increased investment in the Industrial Strategy Challenge Fund (for example, £121 million for the Made Smarter Challenge, £78million for the Stephenson Challenge), and a further £115 million for the network of Catapult centres; a commitment to supporting collaboration between industry and the research and technology community has been clearly signalled.

At GORSE services we work with a wide range of organisations, helping them to build collaborative partnerships and to grow through innovation, knowledge exchange and skills development. Here we share five tips to help you identify and exploit the opportunities that are out there to help your business grow through collaboration and innovation.

  • Search out funding opportunities, connect to experts and find out about networking and briefing events by signing up to Innovate UK. With a strong business focus, Innovate UK is a non-departmental body that operates to drive growth by working with companies to de-risk, enable and support innovation. https://www.gov.uk/government/organisations/innovate-uk
  • Find out about the work of UKRI and the UK’s publicly funded programmes of research and innovation. With a budget of over £6 billion UKRI brings together seven research councils, Innovate UK and Research England to enable world-class collaborative research and innovation. https://www.ukri.org/
  • Get connected with entrepreneurs, researchers and other businesses who are looking to innovate in your field. The Knowledge Transfer Network (KTN) connects organisations to accelerate innovation. It helps businesses to articulate their problems and challenges to organisations that might have a solution and links entrepreneurs to groups who can help them to commercialise new ideas and technologies. https://ktn-uk.co.uk/
  • Engage with your local Enterprise Partnership (LEP) to find out what opportunities are out there for innovation and growth in your region. There are 38 LEPs, business led partnerships between local authorities and local private sector enterprises in the UK. They play a central role in determining and driving priorities around job creation, infrastructure, skills development and regional economic growth. https://www.lepnetwork.net/
  • Contact your local University’s Industry Engagement or Business Team. These groups will often work with businesses to help them make the most of the knowledge, insights and networks that the University has to offer. They may run events, signpost you to useful resources, and help you to make the connections that are needed to unlock the value in your business.

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