The importance of Research & Development in Levelling up
Increasing Research and Development (R&D) is an economic priority for many towns. The biggest issue for towns is how best to increase R&D investment locally, and how to use it to benefit businesses, entrepreneurs and to create more and better jobs.
Tom Bridges is an economic development, regeneration, and urban planning professional, with an interest and passion in innovation. His work with TFDP, and previously for Leeds City Council, has involved developing strategies and projects that support economic growth through innovation.
Perspective
The UK lags behind its competitors in R&D. The Government has a target to increase R&D investment to 2.4% of GDP. But as the Levelling Up White Paper and research for Nesta has highlighted, public and private sector investment in R&D is not spread evenly across the UK. Too much R&D investment is focused on primary research and not enough on commercial pull-through; in short, we need to focus more on the D not just the R.
There is widespread recognition of the need to build the right place-based ecosystems for innovation-led economic growth. MIT identifies the main stakeholders that need to work together: entrepreneurs; universities (and other knowledge producing institutions); corporates; investors of risk capital; and government. Innovation districts, which bring these organisations together alongside commercial space, have an important role. The issue for towns is how best to develop the networks, critical mass, and physical development projects to succeed.
Several towns are rising to this challenge, using Towns Fund investment to pump prime projects. In Peterborough and Worcester, investment is linking the universities more closely with the business base. In Cleator Moor, West Cumbria, the Industrial Solutions Hub will enable Sellafield Ltd to work more closely on innovation with their supply chain. In Morley, South Leeds, the Ingenuity Smart Cities Testbed will enable innovators and entrepreneurs to test innovations in real world conditions.
Reflections
From these and other examples, there are three main emerging lessons.
First, the scale of ambition around innovation and R&D is positive and important. Towns are putting conditions in place to increase R&D and its benefits, recognising this is an agenda for all of the UK, not just the big cities.
Second, towns are recognising that supporting R&D can help support physical regeneration, repurposing buildings and sites, creating a buzz, and strengthening then role of towns where people, businesses and innovators can collaborate, compare, and connect.
Third, places should consider how best to build economic diversity and critical mass, including developing links with other places, including major cities. Towns can lack the scale and economic diversity to continuously innovate and renew their economies, leaving them vulnerable to economic shocks. While it makes sense to focus on growth sectors where an area has comparative advantage, there are risks in having all your economic eggs in one basket.
Conclusion
It is great to see a place-based innovation policy emerging, and renewed interest from Government, local places, universities and colleges, and the private sector about how R&D and innovation can support Levelling Up. I would encourage all towns to think about how they can capitalise on this. While there are several significant capital projects in this space, there is a need to look beyond bricks and mortar. Towns need to bring together the main stakeholders and build the networks and ecosystems necessary for success. Industry leadership is essential. If we get this right, we can make a real difference to the prosperity of people and places.