“How do we fire up the innovation engine?” asked Prime Minister Rishi Sunak to the CBI’s annual conference in Birmingham yesterday.
While acknowledging that education is “the closest thing we have to a silver bullet in public policy,” there were precisely 0 mentions of universities in nearly fifteen minutes of speech. Now, there were plenty of mentions of business, innovation, visa regimes, world class education, and the like, so let’s not get too disheartened.
The white heat of technology revisited
Sunak’s speech yesterday opened up by him explaining that in his view innovation is not about the latest consumer goods but about the economy, ideas, and social progress. In his speech he called forth the spirit of Franklin D. Roosevelt on the need for “bold, persistent experimentation,” with obvious parallels to the great depression and financial crash, but in tone his speech was much closer to home.
Readers of Wonkhe during the party conference season will remember our coverage of Harold Wilson’s white heat of technology speech. In it, like Sunak, Wilson argued that too much R&D effort was directed toward unproductive ends. Unlike Sunak, Wilson believed that private industry was too focussed on commercialisation above raising living standards, and that the role of the state was to sponsor key industries in order to translate their ideas into inventions which would produce broadly shared economic benefits.
Sunak’s view is that the uplift in public funding maintained in the budget alongside yet to be announced regulatory reforms, increased tax credits for larger businesses, investment in innovation in the foundational economy and NHS, investment in skills, and relaxing visa regulations for the world’s top 100 talents in AI (how that will be measured is not clear,) will stimulate more private investment and in turn grow productivity. If Wilson’s view of the world was to use public investment as a means of coercing business toward more social goods, Sunak’s is about using economic goods to bend business toward more productive ends.
Universities changing tack, again
The question then is how should universities respond to an innovation agenda that could leave them behind if they are not careful. This is not to say that any attempt to build an innovation economy will not run through universities, as it clearly will, but that this is a different approach to innovation than we might have seen under a Johnson/Cummings government.
The first is that Sunak highlighted the Lifetime Skills Guarantee as a central part of his work to reskill people toward jobs in the innovation economy. This is the scheme which guarantees a Level 3 qualification to any adult who does not already have one. Crucially, this scheme was crystallised within the Skills for Jobs White Paper which also set out the basis for the life long loan entitlement. Sunak also made a fleeting mention to the OfS supported AI scholarships and masters conversion courses. There is a big missing gap there on undergraduate qualifications; it might just be time to dust off the lifelong learning planning documents
The second interesting part is the focus on innovation within the foundational economy. The bits of work which are mundane but nonetheless keep the economy ticking over through the hard work of business improvement and the like. Universities have got more skilled with narratives about the life-changing, world beating, and massive. I’m less convinced that as a sector there is an equally convincing public narrative on how universities help the people who make life incrementally better through their hard work in the less glamorous end of innovation.
It was also a speech unlike the one Boris Johnson delivered last year to the same conference. It reflected some of the sentiment on innovation and productivity but absent of levelling up rhetoric (or Peppa Pig references). There is a risk that Freeports, which were after all Sunak’s policy, tax credits, and visa reform, become the only supply-side innovation reforms this Parliament. Universities should be on the front foot on the upcoming consultation on the review of business tax credits but also prepare to consider how they might contribute to the investment zones set out by Jeremy Hunt in his Autumn statement. Broadly, investment zones will attempt to build a tax friendly ring around research, clusters, and innovation, in partnership with businesses and some level of local government.
Alongside guaranteeing the R&D budget and announcing further investment of close to £500m in talent, infrastructure, and QR, to help ease the pain caused by delays to Horizon Europe association it is clear this is a government interested in research. The challenge for universities is, yet again, adjusting to a continually changing policy landscape.