The government has placed too much emphasis on leading-edge research, and not enough on grassroots innovation, says John Goddard.
In several speeches, business secretary Greg Clark has argued for a place-based dimension within the emerging industrial strategy. “For too long government policy has treated every place as if they were identical,” he told the Institute of Directors in September, adding that “industrial strategy will not be about particular industries or sectors but will be cross-cutting”. Similarly, speaking at the Lord Mayor’s banquet last month, prime minister Theresa May signalled the government’s commitment to “rebalancing the economy across sectors and geographical areas and spreading wealth and prosperity around the country”.
Judging from the initiatives and funding announced in the autumn statement and related documents, such thinking has yet to reach the Treasury. Instead, we got investment in leading-edge science and technology in top universities—the “push” model, that sees innovation as following linearly from basic research. It is far from clear how upstream spending will result in downstream innovation that could help left-behind places.
Indeed, the autumn statement’s reference to the Industrial Strategy Challenge Fund, which highlights technologies where the UK has “proven scientific strength”, seems to ignore the innovative potential of different places. The statement is silent on the barriers to the takeup of these technologies, and on the need for more innovation in local economies to raise productivity across the UK.
Nevertheless, a pending green paper on industrial strategy suggests that the Department for Business, Energy and Industrial Strategy (BEIS) may be open to new thinking about a territorial dimension to industrial policy, including a more realistic model of innovation as the product of multiple local ecosystems with interacting players.
In my view, such a strategy should involve government support for building institutional capacity for partnerships between all the universities and further education colleges—not only the research-intensives’—business, local and central government, society and voluntary organisations in a location.
Such partnerships should recognise the changing nature of innovation, including open and social innovation, and the importance of joint knowledge production by researchers and locals. They would need to work together to unlock the innovative potential of local businesses and society, and address the barriers to realising that potential, particularly the lack of relevant skills.
The focus could be on addressing grand challenges, such as ageing and sustainability. These are local problems with potentially global markets, where a place can be a test-bed or a living lab. For most places, it would be a mistake to aim for the technological cutting-edge, or try to become a hi-tech hub à la Cambridge.
For universities, helping to build collaborative capacity is part of their obligation to society. They are well placed to identify unique local assets, shape “smart specialisation” strategies and foresight exercises, address skills gaps, foster technology takeup, provide global contacts for small and medium-sized busineses and attract investment.
Turbulence in higher education threatens universities’ capacity to fulfil this role. Smaller institutions in lower-ranking cities are particularly at risk from the removal of the student numbers cap, loss of fees from non-UK students, and entrants skimming off profitable programmes that cross-subsidise science and technology subjects. The transfer of higher education from BEIS to the education department and the role of the Home Office in visa policy suggest that Clark will have to work hard to secure the place of universities in local innovation.
Going forward, working out the geography for a place-based innovation strategy will be a problem. The government’s science and innovation audits have no geographical consistency, and those already signed off by BEIS transcend the boundaries of local enterprise partnerships and mayoral authorities. Such scale may be needed to build critical mass, but the price is loss of identity and the link to local labour markets.
In contrast, the Northern Powerhouse prospectus published alongside the autumn statement has endorsed a proposal from the N8 group of research universities for an urban focus and a “network of Urban Transformation Centres to translate research excellence into direct action”. This approach resonates with that adopted in Research Councils UK’s Urban Living Partnership, but where it leaves other universities in the north remains to be seen. Likewise, how each Catapult centre combines technological focus with a territorial dimension needs to be worked out. In short, a lot of heavy lifting remains to be done to shape a place-based industrial strategy that embraces the local dimension to innovation.
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John Goddard is emeritus professor of regional development studies and former deputy vice-chancellor at Newcastle University. He is the co-editor of The Civic University: The policy and leadership challenges (Edward Elgar, 2016).
This article also appeared in Research Fortnight