This blog tackles the second key question put forward in the call for evidence, responding to the question: how does research and innovation in our regions drive growth and prosperity in those regions?
The RDS has already spoken enthusiastically about the new cluster-based approach in developing the UK’s Industrial Strategy. The recent English Devolution White Paper has since laid out its vision for the future of UK devolution through the framework of “Strategic Authorities”. The intention to bring the rest of England into line with the existing mayoral authorities is well founded, and while some mayors may be disappointed to see Westminster continue to retain a tight grip on the purse strings, the additional powers will be vital as each authority develops its local growth plan.
The SIT Committee’s Inquiry seems to be lagging behind in this debate. Asking whether the UK should pursue region-specific innovation and growth policies misses the fact that the horse has already bolted. This is a welcome change to the previously chaotic approach to English devolution. Most of these strategic authorities will have ecosystems vastly different from London and the local authorities will need to leverage their unique resource profiles when planning their own development. Here, market-space centric value chains will be particularly useful in identifying opportune value adding elements for authorities to focus on, as well as help identify potential partnerships both inside and outside the UK.
Chasm II as defined in the Triple Chasm Model, however, remains one of the greatest challenges for commercialisation ventures in all regions. The UK is by no means an outlier in this case. All regions across the world face similar failure rates for SMEs attempting to cross the second chasm. However, this could serve as an opportunity for the UK to lead the way in commercialising science and technology. How can we best take advantage of this? The Centre for Commercialisation at Stevenage Biocatalyst may provide a good template for the development of a new type of intervention. The standard accelerator model focuses on tackling Chasm I, often lacking a capable understanding of market spaces and when this understanding is found, it is not applied in an integrated manner. Tackling Chasm II requires an integrated approach covering all 12 vectors (as defined in the Triple Chasm Model).
Chasm Crossing Rates by Region
Proper investment will be critical to improving the situation. The UK’s particularly low levels of local investment needs to be addressed. The new powers expected to be given to local government will help but the private sector will be needed to plug the gap. It is already clear with the treasury’s focus on “Crowding In” funding that this is a priority, but to make this a reality private industry must be provided with more incentives for investing in new enterprises. Investments in new industries by Rolls Royce and Novo Nordisk may provide lessons. A desire to expand their existing product portfolios have required them to look elsewhere for new expertise and innovation. Creating new incentives to drive this will allow regional authorities to take advantage of their existing mature industries in order to draw new investment for rising sectors. The partial mapping for Kent, shown below, for example shows a plethora of mature firms within the professional services sector. Creating additional motivation for these firms to invest in Kent’s burgeoning Bio-tech industry can help provide the patient capital they require.
Partial Example Cluster Map for Kent