Towards a more place-sensitive approach to R&D and innovation investment

Dr Peter O’Brien, Executive Director

Last week saw the House of Commons Science and Technology Select Committee hold its final evidence session, as part of the Committee’s inquiry into the ‘balance and effectiveness of R&D expenditure’. In evidence to the Committee, Yorkshire Universities highlighted ten issues that might help government and its agencies create and sustain a more spatially-balanced approach to R&D and innovation activity and investment.

First, research and innovation can be both globally-excellent and locally-relevant/impactful: there is no necessary distinction between them. Achieving the government’s target of investing 2.4% of GDP in R&D by 2027 will require current levels of expenditure to almost double and the private sector to contribute two-thirds of total extra investment. This means creating the conditions to encourage indigenous firms in the UK to become more innovative and also attracting new international inward investment.

Second, there is a spatial imbalance in current R&D and innovation spending in the UK, with London, South East and East of England continuing to dominate investment, while Yorkshire and other north of England regions receive lower-levels of funding, despite our world-class universities. This imbalance drives and reproduces major challenges for local and regional economies. Research and innovation should be more attuned to local and regional context, assets, capabilities and infrastructure.

Third, public investment in R&D can leverage or ‘crowd-in’ private investment. However, to achieve the most effective and spatially-balanced outcomes for new investment, a place-sensitive approach is required. UK science and research policy and investment has often overlooked the potential of different places. The emergent Strength in Places Fund presents an opportunity to plan and act differently in relation to investing in ‘excellence’ in more places within and across the UK.

Fourth, a place-sensitive approach recognises the value of connecting research, science and innovation to ‘real-world’ economic, social and environmental opportunities and challenges. Linking science and innovation with regional policy and industrial strategy speaks to the multi-faceted role of universities as anchor institutions serving the public good in the communities in which they are based.

Fifth, in Yorkshire, specific approaches are needed to stimulate more demand-led forms of innovation, and encourage institutions, including universities, to strengthen their engagement and exchange of knowledge with businesses at all levels, and sectors and of different sizes.

Sixth, entrepreneurial discovery processes can help to identify the opportunities in specific research and innovation domains where places can develop distinct advantage. This requires effective partnerships between institutions that are able to combine their diverse knowledge of local science/technology capabilities and market opportunities.

Seventh, local and regional institutions, including universities, LEPs, Combined Authorities, Metro Mayors, business and local authorities can together help places build and sustain new paths of development through local industrial strategies. Collaboration between business and the local ‘knowledge base’ can realise the benefits of SME innovation and support innovation activity that is ‘close to the market’.

Eighth, different forms of R&D and innovation, and associated investment, should be integrated more closely with projects and programmes designed to improve high-level skills.

Ninth, we should make a clear distinction between R&D and innovation. Not all innovation is driven by R&D. Instead, we should adopt a broader definition of innovation. Much of the innovation/productivity gap can be met by businesses adopting established technology and operational systems and techniques. Universities can play a significant role in helping to achieve this, especially if more timely data can be secured and utilised.

Finally, there has to be sufficient funding and finance to enable more innovative, high-growth firms in Yorkshire to realise their potential. Not enough business ventures are able to secure investment within domestic markets, and scale-up, despite the size and maturity of the UK’s financial services sector.

  • Share this post: