Investing in innovation to boost the UK economy

The UK Government has promised to increase spending on research and development to 2.4% of GDP by 2027. Understanding who needs the investment and then making sure it reaches the right people and places is a complex task in itself, let alone in the context of a global pandemic that has put the UK’s economy into a recession.

But even before the pandemic, the UK was behind its counterparts in its attitude to investing in innovation. There is already a growing gap in UK productivity, with rates of productivity significantly slowing since 2008 and showing no change in direction. To level up the economy, investment in innovation activity is needed all over the UK, creating a roadmap to a better, more inclusive tomorrow. This will stimulate growth, driving cities’ economies forward and closing the productivity gap. Within 20 years, each UK region should have a world-class centre of research excellence, but to achieve this investment and spend must be rebalanced. By doing this, we can focus on making scientific excellence – a pillar of innovation – sustainable in the long term, in places outside of our traditional research centres.

Bruntwood SciTech, the UK’s leading property company dedicated to driving the growth of the science and technology sector and a joint venture between Bruntwood and Legal & General, has commissioned a report, called Place Matters: Innovation and Growth in the UK, to help central and local government leaders drive forward innovation as a means to aid economic recovery in the wake of COVID-19.

The power of place

Across Europe, economic productivity tends to follow a pattern: the larger a city, the more productive its economy. Aside from London, the UK follows no such pattern. In fact, the report reveals that innovation spend in the UK is highest in London, the South East and the East of England, and lowest in Northern Ireland, the North East and Wales. So how can the UK’s wider economy level-up if innovation spend is focused on just a few areas? There must be a move away from piecemeal innovation investment across the country, and a greater focus on bigger, better support networks that enable and encourage innovation all over the UK.

With the right conditions, innovation can happen anywhere. According to the report, there are three cornerstones for successful innovation, a model the report calls ‘The Power of Three’. These are: an innovation district (an environment in which businesses and entrepreneurs come together, consisting of co-working spaces, catapults and research institutes); an innovation ecosystem (consisting of supportive networks, professional services, finance and leadership, which enable the innovation to take place); and a place ecosystem (a leisure and culture offering, with the supporting infrastructure, which attracts and retains talent). For the Government’s levelling-up agenda to be successful, all three cornerstones must be carefully considered, in turn building strong foundations for the future of innovation.

This doesn’t mean deciding what type of innovation the country needs, and then spontaneously choosing a location. Pre-existing notions of innovation must go out the window. Instead, we need to build on the existing strengths of a town or city in the UK, and understand its identity – its culture, skills, heritage, infrastructure and economy – and the need to build something different to what exists today.

Innovating today, sustaining tomorrow

We understand that long-term investment in innovation must go beyond the few places already benefiting from it. So in 2018 we partnered with property developer Bruntwood, making the largest investment in science and technology assets in Europe that year, to create Bruntwood SciTech and establish a network of innovation districts. The Bruntwood SciTech network will help to create more than 20,000 high-value jobs in Manchester, Liverpool, Leeds, Birmingham and Cheshire. And the benefits to our society and our economy are already tangible, with Alderley Park s, in Cheshire, selected by the Government as one of its ‘Lighthouse Labs’ to carry out the testing of COVID-19 samples.

Put simply, for the Government to level-up the economy, it must invest, and encourage investment in, innovation. And this means investment in places, infrastructure, housing, people and their skills. Not only will this create the innovation needed to boost the UK economy, but it will build holistic senses of place all over the UK. It can deliver jobs at every level of the economy, resetting local opportunities today, while building a better tomorrow.

To read the report, click here.