The UK’s innovation challenges are familiar but, with government commitment, soluble, says Tim Bradshaw
A decade ago, when I was head of enterprise and innovation at the Confederation of British Industry, I wrote for these pages on what we could do to give the UK the “best environment for business innovation in the OECD”. Looking back as chief executive of the Russell Group, there are signs of progress—but many of the same challenges and opportunities remain.
Public spending tightened after the financial crisis, and the same is on the cards now as the government looks to balance the books after the pandemic. Post-shock growth in consumer spending may give the chancellor some short-term comfort, but investment and innovation are what the country really needs.
The UK is an ideas economy. There is only so much we can extract from mineral resources or farming. Everything else comes down to the skills and experience needed to turn ideas into medical advances, engineering success stories and world-beating creative industries.
The country needs to be stronger in areas that will be critical to its future economy, such as by making more medical devices and electric cars and batteries. Equally, we should use our existing strengths in the social sciences, arts and humanities to create economic and social value.
All of that needs investment across the economic landscape, from basic research and high-level skills through to support for new firms and infrastructure.
In 2011, as now, businesses were rightly urging the government to bolster the UK’s attractiveness or risk losing investment and jobs to other countries. Being home to some of the world’s leading research-intensive universities is a particular strength and competitive advantage. But we have not harnessed the full potential of that research base to deliver business investment, innovation and growth—and much of that comes down to policymakers and politicians.
Don’t get me wrong—there have been some real successes. The Higher Education Innovation Fund has done much to establish and nurture innovation ecosystems around universities; Knowledge Transfer Partnerships have gone from strength to strength in linking small and medium-sized businesses to university talent; and the UK Research Partnership Investment Fund has created numerous spaces for universities and businesses to collaborate.
Too often, however, the budget is lacking. The HEIF, for example, has grown, but it still isn’t available in all UK nations and it is capped at just over £4 million annually for any single English institution. With every £1 of public funding generating at least £8, boosting the HEIF in this year’s spending review would be an easy win.
Back in 2011, I also called for the government to use public procurement to stimulate innovation and position the UK to take advantage of the transition to a low-carbon economy. Despite progress on wind power and light materials, there is still much to catch up on in other areas with big commercial potential.
The UK could lead the world in the next generation of batteries for electric vehicles, or the move away from natural gas, but pull from public procurement and investment in innovation infrastructure are desperately needed.
Funding innovation through universities can play an important role, not just with cutting-edge discoveries and early-stage investment but also in developing the entrepreneurial ecosystem required to support innovation.
Many small companies have limited capacity for R&D; to build it, they need access to universities’ facilities and people. Schemes such as the Knowledge Transfer Partnerships are a proven success in this regard.
More broadly, the UK will need to strengthen its pipeline of research talent, with significant investment in postgraduate training at university. At present, public funding covers only around half the cost of a PhD.
Turbocharging UK innovation will rely on nurturing regional clusters that bring together research-intensive organisations, businesses of all sizes and other local players. ID Manchester, the University of Manchester’s £1.5 billion innovation district, will do exactly this—but maximising its impact will rely in part on tailored government support.
Such support could include tweaks to taxes for businesses doing collaborative R&D, or for universities building facilities for collaborations with businesses. Leaving the European Union has made these changes easier.
In 10 years, I hope to be looking back on a transformational decade for UK research and innovation. In this year’s comprehensive spending review, I hope the government has the ambition to deliver the policies and funding that will make a real difference.
Tim Bradshaw is chief executive of the Russell Group
This article also appeared in Research Fortnight