This month’s spending review comes at a pivotal moment for the UK.
The fourth industrial revolution is fast approaching – invest in science and innovation across the UK now and the government can revitalise declining regional economies into high-wage, high-tech and high-productivity areas that are global hubs for new technologies like smart-food and off-shore wind turbines. But fail to invest at scale now, and we risk regional economies continuing to stagnate and the UK relying on importing technologies that could have been produced domestically.
Innovation for a future Britain
The government can take decisive action to level up through innovation-led growth by scaling high-tech “innovation clusters” centred around the UK’s world-leading universities. UK innovation clusters, similar to Silicon Valley, bring together universities, researchers, investors and businesses, taking cutting-edge research from laboratories and creating high-tech businesses centred around innovative new products, services and treatments. The UK’s universities are spread across every nation and region in the UK and are therefore perfectly placed to help grow innovation clusters that will create new jobs and draw in external investment to all corners of the country.
The Russell Group proposes a three step-plan to grow regional innovation clusters in the UK: scaling existing innovation funding schemes that have proven to deliver for government and the taxpayer; introducing a new seed-fund scheme to invest in the most promising early-stage university spinouts; and introducing tweaks to taxation for innovative businesses. These measures will provide a significant return on investment for government – increasing existing funding streams by a total of £600m by 2024-25 will return at least £2.7bn to the economy and wider society.
At a national level, the pandemic has brought the importance of the UK’s R&D capacity into sharp focus as never before. Universities and their partners across the NHS and private sector have identified lifesaving treatments and helped us understand a virus we didn’t know existed at the start of 2020. The development of effective vaccines that are protecting the nation’s health and laid the foundations for the safe reopening of the economy was an extraordinary achievement. It is hard to think of a more consequential R&D advance in terms of protecting lives, jobs, and supporting economic renewal in every nation and region of the UK.
The success of the partnership between Oxford University and AstraZeneca was not an accident. In addition to years of research into cutting-edge vaccine technologies, the project team benefited from sustained work by university leaders to build innovative partnerships with the private sector that drive investment and create high skilled, high value jobs.
Impact in every part of the nation
The government has made boosting technology transfer and commercialising research a priority. As we look towards the spending review, officials at the Treasury and in other departments will be thinking about how we can replicate the kind of partnership working that led to vaccine success at Oxford across the UK. How can we best grow vibrant emerging clusters in the North East, South West and other parts of the country to a similar scale we see in the Golden Triangle?
In many respects, the work Russell Group universities are already doing means the foundations for R&D-driven levelling up are already in place. Our universities have become vital parts of their local communities, integral to job creation and drawing investment into parts of the country that might otherwise miss out. Those who think their influence starts and ends at the campus gates or lecture hall door couldn’t be more wrong. Universities are at the heart of emerging clusters in regions where economic growth, private sector investment, and employment lag other parts of the UK. For example, Newcastle and Durham universities have supported the creation of 650 active spinouts. Last year these spinouts had a collective turnover of £236m, attracting £35.9m external investment, and supporting over 2,700 employees.
London, Cambridge, Manchester, and Oxford are the UK’s leading innovation economies. Similar to US “superclusters”, university technology and support has helped create dynamic innovation ecosystems in these areas. What we have also seen is the development of pockets of excellence located around Russell Group universities in other areas too, such as QUB’s world-leading cyber security innovation work, or Cardiff’s compound semiconductor cluster.
With targeted support, there is an opportunity to scale up these pockets of regional innovation excellence, enabling them to deliver much greater benefits for their local areas and to begin to rival more established clusters overseas. In the Spending Review, the government should grasp the nettle and ensure we are making the most of the resources and skills embedded within universities in every nation and region of the UK to drive sustained economic growth.