This blog post by Dr Chloe Billing summarises our approach to an evidence review of place-based innovation policies and their role in supporting local economies, as part of the Local Policy Innovation Partnership (LPIP) Hub work. Our review takes a multifaceted approach, defining key concepts and identifying critical questions around innovation accessibility, tailored support, geographical challenges, innovation policies, and impact measurement.
View the Innovation Evidence Review.
Context and Methodology
The LPIP Hub aims to support local authorities and partners in addressing social, economic, and environmental priorities through innovation and evidence-based policies. Our evidence review synthesises key learnings on place-based innovation policies and their role in supporting local economies. Innovation, defined as transforming ideas into value, is essential for productivity and prosperity.
The review examines academic literature, government reports, and real-world case studies on national and local policies that influence place-based innovation in the UK. It includes resources from the Innovation Growth Lab, Innovation Caucus, Enterprise Research Centre (ERC), OECD’s Centre for Educational Research and Innovation (CERI), UKRI, Nesta, DSIT, The City UK, Economic and Social Research Council, Local Government Association (LGA), What Works Centre for Local Economic Growth, and local evidence reviews by regional innovation actors (for example, Innovation Alliance for the West Midlands).
The review examines UK national and local policies influencing place-based innovation, highlighting regional variations. This evidence highlights regional variations in governance and resources and highlights that fostering innovation capacity requires a nuanced understanding of local contexts.
Key Concepts and Burning Issues
We begin by defining key concepts related to innovation ecosystems, and the institutional structures that enable them. Examples of key concepts which we define include:
- Innovation ecosystems refer to interconnected networks facilitating innovation through the collaboration of diverse stakeholders. Key components include knowledge sharing, access to resources, and a culture of entrepreneurship.
- Building local innovation capacity means tailoring interventions to leverage local strengths and sector dynamics. This involves understanding specific economic, social, and infrastructure factors.
- Place-based innovation policies refer to a targeted approach that aims to foster innovation within specific geographical areas or communities, tailoring strategies and interventions to address the unique needs and aspirations of those localities.
- Inclusive innovation is an emerging concept, with different definitions. NESTA argues that innovation policies are inclusive when they consider who benefits from innovations, who participate in creating them, and who decides priorities and manages innovation outcomes.
The aim of our review is to set out the ‘state of the art’ in terms of policy and academic debates, whilst also identifying ‘burning issues’ going forward for each theme. We identified the following five ‘burning issues’ for place-based innovation policies in our evidence review:
- Strengthening the Innovation Ecosystem:
- How can local strengths be leveraged to drive innovation, and what strategies ensure equitable access to resources for businesses of all sizes?
- Skills and Targeted Interventions:
- What crucial skills foster robust local innovation, and how can interventions address unique local business needs considering various factors?
- Balancing Innovation Types:
- How relevant are transformative and mission-oriented innovation policies to LPIPs, and what mechanisms promote both frontier R&D and adoption of existing innovations?
- How can collaborative efforts and transformative technologies mitigate sector-specific challenges in particular areas?
- Inclusive Innovation:
- How can innovation ecosystems ensure widespread benefits across groups, locations, and business types, and what place-based strategies support local institutions in addressing community needs?
- Impact Assessment:
- What metrics can accurately evaluate place-based innovation policies’ success, and how can strategies be continuously monitored and adapted to regional realities?
Key Findings
Our review revealed several interrelated themes regarding effective place-based innovation policies. The importance of innovation and technology policies emerged as a crucial factor, with both technology push and demand-pull policies being necessary to build capacity, capability, and confidence in innovation. Several sources emphasised the significance of empowering local leaders and decentralising research funding, advocating for more autonomy and decision-making power to be devolved to local leaders. This includes increased local influence over national R&D spending and targeted incentives for local research priorities.
Collaboration, partnerships, and skills development were consistently highlighted as vital components of successful innovation ecosystems. There is a strong focus on the importance of collaboration between government, businesses, academia, and other stakeholders within regions to drive innovation. This collaborative approach extends to developing local STEM skills and aligning training programmes with the talent needs of innovative companies.
The review also identified a shift towards more place-based approaches and cluster development in innovation policies. These policies are increasingly adopting cooperative, multi-actor strategies with a focus on supporting innovation clusters. Additionally, there are growing calls for more evidence-based and experimental approaches to designing local innovation policies, including rigorous evaluation and regular benchmarking.
These findings underscore the importance of a holistic, place-based approach to innovation policy that empowers local leaders, fosters collaboration, supports skills development, and is grounded in evidence-based practices. By adopting such strategies, policymakers can create more resilient and dynamic local innovation ecosystems that are responsive to regional needs and global opportunities.
International Perspectives
We also explore international case studies, which showcase how different countries have strategically developed capacity in specific regions or districts to drive innovation and economic development. Our review includes examples from various nations, each demonstrating unique approaches to fostering innovation. In the Netherlands, two distinct initiatives stand out. The Dutch Innovation Vouchers scheme increases the R&D and innovation capabilities of SMEs by encouraging collaboration with public research institutions. Additionally, the Brainport Eindhoven initiative focuses on developing high-tech industries through a collaborative ecosystem. Spain offers another compelling example with Barcelona’s 22@ Innovation District, which transformed a former industrial area into a thriving hub for knowledge-intensive industries and R&D centres. In Asia, Singapore’s Jurong Innovation District provides an illustrative case of integrating advanced manufacturing, technology, and academia in a single location to encourage experimentation and innovation across various sectors. These international examples highlight the diverse strategies employed globally to create and sustain innovation ecosystems, offering valuable insights for UK policymakers.
Challenges and Future Research
Our review has identified several key challenges in the field of place-based innovation policies. These include finding effective ways to strengthen local innovation ecosystems, fostering the right skills for innovation, supporting both radical and incremental innovation, promoting inclusive innovation, and accurately measuring the impact of place-based policies. Addressing these challenges will be crucial for the continued development and success of place-based innovation strategies.
To tackle these challenges and advance our understanding of place-based innovation policies, future research should focus on several key areas. There is a need for comprehensive case studies and comparative analyses across diverse regions and sectors, which can provide valuable insights into the varied contexts in which innovation policies operate. Fostering cross-disciplinary collaborations and knowledge-sharing among stakeholders is another crucial area for future research, as it can lead to more holistic and effective approaches to innovation.
Developing robust frameworks for measuring and evaluating the impact of place-based innovation policies is essential for evidence-based policymaking. This should be complemented by encouraging long-term, longitudinal studies that can capture the dynamic nature of local innovation ecosystems and provide a more nuanced understanding of how these ecosystems evolve over time.
Future research should also explore innovative funding mechanisms and incentive structures to support research initiatives. This could help address some of the resource constraints that often hinder innovation, particularly in less developed regions. Finally, investigating the implications of mission-oriented innovation for diverse places is an important area for future study. This could provide insights into how different regions can tailor their innovation strategies to address specific societal challenges while leveraging their unique strengths and resources.
By focusing on these research priorities, we can deepen our understanding of place-based innovation policies and develop more effective strategies for fostering innovation and economic growth across diverse regions and communities.
Conclusion
Our review synthesises key learnings about factors, partnerships, and policies that can effectively build local innovation capacity. It also reveals gaps in our understanding that point to areas for future research. The aim is to inform policymakers seeking to leverage place-based innovation for local growth, emphasising the need for tailored, collaborative approaches that consider the unique characteristics and needs of different regions.
View the Innovation Evidence Review.
This blog was written by Dr Chloe Billing, Research Fellow, City-REDI, University of Birmingham.
Disclaimer:
The views expressed in this analysis post are those of the author and not necessarily those of City-REDI or the University of Birmingham.