NCUB and Imperial College London convened academic and industry leaders from across the country to discuss new and bold ideas to support the Levelling Up agenda.
The discussion, co-chaired by Professor Nick Jennings, Vice-Provost Research and Enterprise at Imperial College London, and Dr Joe Marshall, NCUB Chief Executive was based on the NCUB’s Research to Recovery Taskforce’s recommendation to create Innovation Collaboration Zones that will join up both fiscal and regulatory levers in order to attract maximum R&D investment to a specific area.
Professor Jennings recognised the opportunities to develop approaches building on current clusters of excellence to drive economic growth in all areas of the UK. These already create pipelines of innovation into communities across the country through collaboration, knowledge sharing and translation of technology – as illustrated by Imperial’s interactive impact map.
With the Government’s new Plan for Growth and the Integrated Review of Security, Defence, Development and Foreign Policy placing R&D and innovation at the heart of the nation’s economic recovery, the timing could not be better to present bold new ideas that can seize the opportunities to attract further investment across? the UK.
Drawing on experience and insights gained across a multitude of sectors and disciplines, the group identified the critical role that these zones can play in both the Levelling Up agenda and in realising the government’s ambition to become a scientific superpower.
The call to action
In Autumn last year, NCUB’s R&D Taskforce recommended that the UK needs to prioritise efforts to seize strategic commercial opportunities, create synergies by more overtly joining up the system, strengthen the enablers that provide the foundations and deliver and develop a business focused offer that will attract foreign direct investment into the UK.
Successful innovation requires agile, responsive, risk-driven approaches with a clear focus on a purpose defined by demand led signals and user needs. To level up across the UK, create simpler mechanisms to support businesses to innovate, and to galvanise industry and academia around specific, defined commercial challenges, the Taskforce recommended that the Government, with UKRI, should establish a network of Innovation Collaboration Zones (ICZs) across the UK aligned to commercial missions.
There are an array of factors that influence and shape the decision making of businesses when it comes to making an investment in R&D. The businesses engaged in the work of the Taskforce emphasised the need for a critical mass of talent, ideas, like minded businesses and competitors, as well as favourable framework conditions to encourage business investment in R&D.
Realising the UK’s ambitions for R&D will require enhanced and scaled up collaboration between and within industry and academia across disciplines and sectors. Initiatives like the UK’s Catapult Network and University Enterprise Zones have played an important part in building critical mass by creating and attracting businesses and encouraging collaboration with academic partners.
The UK has an opportunity to go further.
The purpose of the Innovation Collaboration Zones would be to join up levers to maximise R&D investment amongst start-ups and SMEs as well as large multi-national companies, and to make it simple and effective for a business to invest in R&D and to capitalise on the different opportunities available. Importantly, the levers deployed could be tailored to the specific focus of the Zone, but could include fiscal and regulatory levers, as well as a critical mass of talent and facilities.
Expanding the thinking
The Taskforce’s proposals have already generated great debate and traction. Our priority is now to bring these recommendations to life, unpacking and understanding in more the detail what it would mean to implement them and how the recommendations could be developed ahead of the Spending Review in the Autumn and aligning to the Innovation Strategy and R&D in Places Strategy.
This was the first roundtable on Innovation Collaboration Zones, but several early points emerged from the first meeting that will invariably shape the final output.
- Build on existing initiatives and scale them up
Smaller innovation zones already exist around different universities and these can be excellent catalysts for scaled-up ideas, building on successful initiatives within the academic ecosystem. It was also suggested that NCUB draws on insight gained through Freeports and University Enterprise Zones, building on the lessons learned in other cluster initiatives.
- R&D tax credits are an important lever
The Government’s R&D tax credits consultation presents an opportunity to think critically and look at the tax credits system as a whole, with the potential to introduce credits that support small and medium sized businesses to innovate and invest. These could include credits to build new facilities, often a barrier for smaller firms hoping to access or develop new technology.
- Emphasise skills development
The skills deficit is a consistent barrier to business investment in many areas across the UK and ICZs need to take this into account through upskilling local talent available in line the skills needed by local R&D supply chains. There also needs to be connectivity between the objectives that focus on translating research into real products and the skills needed to make that happen. Encouraging and incentivising researchers to move between industry and academia was also highlighted, as was increasing entrepreneurial training for academics to develop spinouts.
- Target larger firms
Priority for the ICZs should be to focus on leveraged funding from larger firms’ R&D investments, particularly high-technology and high manufacturing firms. Participants commented that the value that larger firms can bring is significant and will help to bring in small and medium sized firms through supply chains.
- Strategic public investment
Discussion included suggestions for more series B funding – which takes a small business with an established team and product to the next stage of development – of which there is currently a lack, particularly for technology companies. This could be addressed with tax breaks for scale-up funds or by improving access to finance by incentivising pension funds to put a proportion of their investment into UK tech start-ups. Additional investment (through ‘B’ stream QR grant funding and the Higher Education Innovation Fund (HEIF) could be made available to support university-industry collaboration as an initial step to address this.
HEIF is a proven instrument for funding impactful knowledge exchange activities successfully. Participants highlighted the need for a real-terms protection for HEIF to be considered, alongside removing the artificial cap on how much can be awarded to individual institutions.
To encourage inward investment from international sources, in addition to increased public funding for research and innovation, it was also suggested that the government should ensure clear signposting for investors and make long-term commitments to the research base. UK trade missions should also focus on encouraging inward investment in tech.
- Bespoke approaches
Finally, participants emphasised that “a one size fits all approach may not work in all circumstances”. The most important factor is the joined-up offer across each zone, developed with relevant local stakeholders and aligned with local and national priorities. This also needs to consider that R&D policy mechanisms may not translate in the same way across the UK, venture capital investment, for example, is not necessarily available uniformly outside of London.
Innovation Collaboration Zones present a unique opportunity to galvanise both industry and academia around foundational elements of the research and innovation funding systems where a more joined up approach can be developed.
The Government also has a critical role to play in bringing together wider fiscal and regulatory initiatives to make a competitive offer to businesses designed to encourage research and innovation. NCUB will be taking these perspectives and engaging further with our members and stakeholders.