One of the big questions facing the Government is how to accelerate sluggish economic and productivity growth. At a time of rapid economic and technological change, the places that will be successful in the knowledge economy are those that can create and commercialise innovation through research and development (R&D).
In the UK we underinvest in R&D. The Government aims to increase R&D spend to the OECD average of 2.4% of GDP, but few parts of the UK meet this benchmark currently. Despite strong universities and some real success stories, many of our cities and regions have yet to build an innovation-led-economy with sufficient strength, coherence and critical mass.
Greater Boston in Massachusetts has built one of the world’s most dynamic economies based on innovation. It is anchored by the Massachusetts Institute of Technology (MIT) and other world class universities. A team, led by the University of Leeds, is participating in MIT’s programme to learn from the Greater Boston story. Collaboration is at the heart of its success. From universities, entrepreneurs, large corporates and angel investors to local and national government; need to work together to create a successful ecosystem.
There are four calls to action to ensure initiatives such as these translate to economic growth.
First, we need to rebalance and tackle the UK’s north-south divide in spending in R&D. Over half of our current R&D spend is concentrated in the South East corner of the nation. Only 5% is in Yorkshire and 2% in the North East.
Second, a place-based approach to innovation is important. Innovation happens in places and through collaboration. The modern economy relies on intangible assets and networks such as knowledge, research and development, creativity, software, data, and talent. This means knowledge spillovers are critical to the economic competitiveness of any region. Cities and city regions would benefit from greater influence and power over how decisions are made on public investment in R&D. They are best placed to identify the pull-through projects that help translate research into commercial applications.
Third, we should get behind innovation districts in our cities. The geography of theeconomy is changing. Knowledge intensivejobs are moving into urban areas where innovative people, firms and organisations are sharing ideas. Cities, universities and cultural institutions are supporting and capitalising on this trend through bold investments to create new campuses, business space, and public realm. Traditional out-of-town office and science parks are seeking to re-invent themselves to enable greater collaboration amongst occupiers.
Finally, as the economist Mariana Mazzucato has argued, there is the potential for a mission-based approach to innovation. Fifty years ago the Apollo moon missions were a huge catalyst for innovation and technology transfer. Today we face major societal challenges such as climate change, an ageing population, inequalities and social exclusion, automation, housing supply, and mobility: global issues that will have big local impacts on our cities and regions. We can use the UN Sustainable Development Goals as a framework for ambitious missions to address these local challenges to unlock global markets for new solutions. This could be our 21st century equivalent of the moon shoot. The time to act is now.
Tom Bridges is Director of Cities Advisory and Leeds Office Leader for Arup.