Research and innovation thoughts for a new government

Research and innovation (R&I) investment will be essential to delivering economic growth.

Reassuringly, this is accepted by both the government and the opposition.

How such investment should be delivered, where the priorities should lay, and what might be done differently are yet to be clarified. Here are some requests for the next government.

World-class funding

A lack of long-term investment and planning in R&I, alongside reliance on cross-subsidisation from international student fees, means that we can no longer take universities’ R&I activities for granted. Without changes to our research funding system the UK is at risk of losing its strategic and economic edge. We need security of funding and more strategic use of existing funds.

Following planned increases in R&I funding to £20bn per year by 2024-25, a commitment to continuing to increase the proportion of GDP allocated to R&I is needed. Universities UK’s recently launched manifesto, Opportunity and Growth, called for an R&I commitment to match the most innovative and competitive economies around the world. To stall would lack ambition; the US R&I investment is already around 3.5 per cent of GDP. We also need to provide stability, by allocating R&I funding in 10-year funding cycles; this increased certainty would help secure private investment.

To provide further stability, the UK should signal its intention to participate in FP10 (starting 2028) as soon as possible. We should press for full engagement in all the (in)formal fora influencing FP10 – this would benefit the European Commission and the UK research community and has informal support from at least one large member state.

The geographical allocation of funding within the UK should also be re-evaluated. Compared to the European Regional Development Funds (ERDF), the UK Shared Prosperity Fund (UKSPF) is scattered widely, supports only small-scale projects, and discourages regional collaboration. Regions and nations should be empowered to focus on their particular challenges, informed by alignment to national policy. UKSPF allocations should reflect economic need, encouraging ambitious, large-scale collaborative projects. Reassuringly the Labour Party has committed to Wales receiving prosperity funds in proportion to the previous structural fund allocation, and the Welsh Government will invest at least the same proportion into R&I as allocated through structural funds.

The principle that universities should partner with government in supporting R&I, as reflected by the UKRI 80 per cent FEC rules, is not unreasonable but the balance has shifted too far. Universities and UKRI should ensure 80 per cent of overheads are both requested and recovered on awards.

Approaches to match funding should also be reviewed. ‘Double dipping’ for further ‘match’ disadvantages universities with smaller budgets, contributing to regional inequalities in R&I investment. The requirement for match from universities should be removed, but matched funds from the private sector should continue to be sought.

Aid-related R&I funding delivers multiple (in)tangible benefits, both to receiving nations and UK researchers. The ODA spend commitment of 0.7 per cent of GDP should be restored and aid-related R&I investment reinstated to previous levels.

Place matters

There is a pressing need for more long-term, equitable, tailored regional investment to drive national productivity. It will not be possible to ‘level-up’ in the short term.

Research quality is more evenly distributed than research investment, which is biased towards the golden triangle, and many of the places with lower R&I investment are most in need of economic stimulus. More explicit ‘levelling-up’ of the R&I budget is required – an ambitious Regional Innovation Fund would provide a good starting point. Learned societies and regional experts should be tasked with creating Regional R&I Investment Oversight boards (RRIIOs) to better coordinate regional R&I and skills activities supported by funding agencies, city deal investments, free ports, investment zones and prosperity funding.

RRIIOs should be tasked with identifying a unified view of globally significant existing (e.g. Liverpool’s life sciences, Edinburgh’s digital and South Wales semi-conductors) and nascent clusters of excellence that should receive more proactive investment, contributing to more equitably distributed R&I funding.

Funding also needs to be tailored to regional industrial R&I and skills agendas (e.g. Wales and Scotland have a far higher proportion of SMEs than the Golden Triangle). The RRIIOs could provide insight into these differences.

Following years of support, many large-scale ERDF projects faced a cliff-edge end to funding. This stunted growth in places that needed innovation investment more than ever. Regional investments must be long-term and sustainable.

It is widely accepted that universities are vital for commercialising R&I through spin outs. More coherent approaches are developing (e.g. Northern Gritstone, Midlands Mindforge), stimulated initially by Connecting Capability funds. Similar funding should be allocated across other nations and regions in the UK to provide more consistent approaches.

Joined-up government

Management of R&I related activity should be more holistically managed within government(s), alongside other R&I actors.

R&I and skills investments and decisions are rarely aligned as universities are managed by two government departments. This structure should be reviewed, recognising that R&I and skills investment could be more strategically linked.

The government should also produce an industrial strategy, with a clear focus for inter-disciplinary R&I, and with clearly specified regional dimensions informed by the RRIIOs.

Occasionally policies in one part of government cut across ambitions elsewhere. A world-class R&I ecosystem requires matching global talent to skills needs with a visa system that facilitates this.

In general, the development of R&I strategies could be more joined up. Devolved spending must be delegated, but devolved nations need to invest funds won from competitions outside their nation and therefore awarded by criteria set by external funders. Aligning national and regional approaches with those of UK funding agencies will maximize R&I investment, strengthen R&I capability, and allow more efficient use of constrained R&I resources. The RRIIOs could contribute to this.

The R&I ecosystem must deliver ground-breaking discoveries and solutions to the world’s most pressing problems. These suggestions are aligned with political ambitions and provide the stability to attract world-leading talent, and inward investment. Some redistribution of funds will better support clusters of expertise. In return, universities must help make the system ever more efficient and effective.