Levelling Up Through Innovation

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On 25th November 2021, Professor Simon Collinson took part in a House of Commons Select Committee to explore the role of technology, research and innovation in the UK’s recovery from Covid-19. In this blog, Simon discusses some of the key points to come out of the committee. 

What are the opportunities and challenges for R&D and innovation (RDI) to drive inclusive growth in UK regions?

A recent Science and Technology Select Committee evidence session held at the Manufacturing Technology Centre (MTC) in Coventry, chaired by the RT Hon Greg Clark (MP), addressed this question and those below by examining the potential and prospects for one region, the West Midlands.

  1. What role is RDI playing in recovery for the region? Are there future Covid-related opportunities for science and technology investments and economic growth generally?
  2. Private R&D investment per head in the region (about £400) is 4-5 times greater than public R&D funding (£83) (Jones and Forth, 2020). Why? And what positive benefits might come from increased public R&D investment?
  3. Should R&D spending decisions be devolved to the region and what additional benefits might this bring?
  4. How can we optimise the benefits of R&D in regions for balanced growth or levelling-up and what evidence exists to demonstrate the positive impacts?
The impact of Covid on the West Midlands

The panel discussed the distribution of public R&D investment across regions and into the West Midlands, the impact of Covid on the region and the potential role of R&D in recovery. As a panellist, Mayor Andy Street highlighted how hard the region had been impacted by the economic shock triggered by the pandemic. But he also emphasised how well it had responded and the potential benefits to the West Midlands region from increased public investment in R&D.

Commercialising university-based R&D into firm-level innovation

With CEO of the Manufacturing Technology Centre (MTC), Clive Hickman also on the panel, there was a strong emphasis on the importance of intermediary ‘bridges’ to translate and commercialise university-based R&D into firm-level innovation. By transferring new technologies, processes, products and services, alongside upskilling programmes, the MTC and similar organisations enhance local absorptive capacity and improve productivity and competitiveness. If this work supports local supply chains and lower-skilled, lower-income workers in the region it can also contribute significantly to reducing inequality.

Life Sciences and other regional strengths

The panel also cited the importance of life sciences as a key area of strength that could be expanded with targeted investment. The region currently has a larger labour pool and wider healthcare market than any other city-region outside London. Moreover, it is already a larger sector than advanced manufacturing in terms of local employment. Well-targeted public R&D investment has the potential to catalyse new growth and further private sector investment in the narrower area of R&D-intensive life sciences. These jobs create significantly higher GVA (gross value added) per head than other sectors and strong local multiplier effects. The Birmingham Health Innovation Campus (BHIC) for example is expected to generate a significant number of new, high-income jobs and propel the regional life sciences cluster over the next decade. It is a designated Life Science Opportunity Zone and has also been identified by the Department for International Trade as a High Potential Opportunity for Data-Driven Healthcare.

Alongside economic growth, many of the Medtech firms, universities, hospital trusts and other organisations in the region’s healthcare ecosystem were able to pivot to focus facilities, resources, and expertise to respond quickly to the pandemic. This sector is also able to target diagnostic innovations, precision medicine and preventative healthcare interventions at more deprived, less healthy communities with lower life expectancy. But to fuel this potential growth requires a stronger supply of specialist skills in STEM and health services including, medicine, dentistry, biology, physics, chemistry, and engineering.

Other regional strengths put forward by the panel include the emergent space industry, green and clean technologies, advanced manufacturing, and materials, alongside the business and professional services sector which is the largest economic contributor in the West Midlands.

R&D Devolution

Finally, the question of whether R&D spending decisions should be devolved to this and other UK regions was put to the panel. The answer was unequivocally and collectively ‘yes’. But a specific set of advantages for devolving particular kinds of decisions to the local level were put to the panel.

The plenary panel of expert witnesses questioned by the Science and Technology Select Committee were Mayor Andy Street, Professor Simon Collinson (University of Birmingham) and Dr Clive Hickman (Chief Executive of the MTC).

The Chair of the Select Committee, the Rt Hon Greg Clark MP, passed on evidence from the participants in a letter to the Rt Hon Kwasi Kwarteng MP, Secretary of State for Business, Energy and Industrial Strategy.

Their responses have been captured on Parliament TV and selected clips are available as follows:

Impact of Covid on the region, adaptability and the role of universities in recovery

On the potential benefits to regions from increased public or private investment in R&D and better alignment between university R&D and local, firm-level demand

On latent innovative capabilities in the West Midlands region which could be used to expand the portfolio of industry strengths into areas like space technology and life sciences

On attracting inward investment and foreign direct investment into city-regions and optimising the benefits from this.

This blog was written by Professor Simon Collinson, Director of City-REDI / WMREDI, University of Birmingham.

The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI / WMREDI or the University of Birmingham.

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