Connected Places Catapult responds to Industrial Strategy consultation

The Connected Places Catapult welcomes the Government's consultation on a new Industrial Strategy. As the UK's innovation accelerator for transport, cities and place leadership we are excited about the opportunity this represents. We are encouraged by the strong focus on the importance of unlocking the complexities of place, as well as the role that data and digital technologies have to play in raising the economic productivity of our cities and regions.

As the Resolution Foundation and others have demonstrated, the UK struggles with the dual challenges of low growth and high inequality, which has left us lagging our European peers in terms of living standards and productivity. Closing that productivity gap would yield incredible returns - an additional £100 billion in gross value added (GVA) per year. According to the Centre for Cities, hundreds of thousands of new jobs would be created if UK core cities achieved productivity levels equivalent to their European counterparts.  

An Industrial Strategy that recognises the importance of place, connectivity and innovation is critical to that endeavour.

Place as a driver for successful sectors and clusters

We welcome the fact that the Green Paper articulates the important role of place. It is also encouraging to see cities explicitly referenced as places that require focus given the important role that they can play in driving economic growth.

We recognise the Government’s need to focus the outputs of the Industrial Strategy around sectors to maximise the potential for long-term sustainable growth. But the economy is a matrix of both places and sectors. We would encourage the Government to ensure that there is no disconnect between the Green Paper’s recognition of the importance of place and the focus on sectors.

A strictly sectoral focus does not allow for challenge-based emerging sectors to occur. In our experience ‘emerging sectors’ occur where technological capabilities with place-based applications are applied across sectors. This often happens as opportunities to work with government and industry create new commercial propositions that respond to place-based challenges.

We also support the focus on clusters and basing investments on robust analysis of strengths and opportunities. We caution against an overreliance on single sectors in any given area, noting the huge opportunity for innovation when diverse sectors intersect and ideas share between one industry/cluster to another. Places which fixate on a single cluster also lack resilience and agility. There is a risk in emphasising clusters that we create unhealthy competition between regions.

Through our work with place leaders across the UK (e.g. the Innovation Places Leadership Academy, the UK Innovation Districts Group, the Freeport Innovation Network), we are also well placed to provide practical support to those seeking to deliver innovation-led local growth.

Innovation & Local Growth Plans

We see an opportunity for the Industrial Strategy, complemented by robust Local Growth Plans, to promote nationwide collaboration between places and clusters which make up different parts of our innovation value chains. This will promote mutually beneficial flows of talent, investment and knowledge across all parts of the chain. We see this as an opportunity to apply a market-driven focus to cluster development, emphasising access to emerging markets and creating tangible business opportunities, as companies join clusters to grow their bottom line.

Capacity to deliver innovation-led local growth is unevenly distributed across combined and local authorities as they face multiple competing fiscal and other pressures. This requires new thinking and resourcing approaches to capacity development and new strategic thinking. Without building innovation capability, there is a danger that the gap between innovation rich and experienced regions, and those regions with untapped potential, will grow. Without broader coordination, Local Growth Plans risk unnecessary fragmentation, competition or duplication.

Investments in high-productivity sectors will deliver a weak return if the places in which they are based are not optimised. Local Growth Plans need to not only describe how places will deliver sectoral improvements in support of the national growth mission, but also place-based transformations in the physical, digital and civic fabric of the place to support a flourishing innovation economy. 

We can help unlock innovation in local growth planning and delivery, strengthen regional digital capability and capacity, and align local plans into national activity and vice versa providing a consistent approach across the UK.

Digital & data leadership

We welcome the Green Paper’s focus on the role of data in supporting the Industrial Strategy, as well as the role of Government in removing the barriers to sharing data to improve business operations and decision making.
 
It is important that Government plays a leading role in reusing public sector data by adopting the principle of “collect once, use many times,” treating data as essential infrastructure. It should incentivise data sharing to unlock regional and sectoral potential while aligning policies with global best practices and market standards. Public sector data, including the proposed National Data Library, should be prioritised as a driver of innovation and growth.
 
We welcome the provisions in the Data (Use and Access) Bill - mandatory sharing, funding mechanisms, and enforcement—extend across sectors. A cross-sector Smart Data framework should promote secure, standardised sharing, enhancing productivity and innovation. Clear governance, pro-innovation regulation, and alignment with international frameworks, such as the Interoperable Europe Act, are essential.
 
Improving data literacy and capabilities within businesses will enhance their use of data across supply chains, foster collaboration, and strengthen competition in data-driven markets. These efforts will ensure the UK’s public and private sectors thrive in an increasingly data-driven economy.
 
It is also important to adopt a standardised approach across Government, industry, academia and Catapults. A decentralised approach to data sharing infrastructure is vital for unifying fragmented systems across transport, energy, and water, reducing costs and boosting productivity.

This will:

• Establish transparent governance 
• Identify critical cross sector uses-cases and route maps
• Inform legislation, policy and investment in demonstrators
• Inform the development of a framework of future-proof components (technical and socio-technical) building on existing digital assets and legacy technology
• Share strategic insights to guide the market to implement this infrastructure effectively, fostering innovation and resilience across industries.

Innovation-friendly procurement

Thanks to technical advances we are seeing incredible innovations being unlocked in the UK by new suppliers from academic spinouts, small and medium sized businesses (including start-ups), scale-ups, venture capitalists, accelerators, corporate innovation teams and many others. These diverse suppliers are helping to achieve better, cheaper and quicker outcomes and create more value from the £400bn the public purse spend per annum on third party suppliers.
 
If just 5% of public sector contracts were brought to market in this way, it would transform £19bn of existing spend into innovation fuel annually. There is an opportunity to nurture this approach further and reform how the public sector shapes markets by not only effectively delivering public policy outcomes, but also by creating new businesses that could be exporting services across the world. To achieve this, we must go beyond Research and Development and use procurement to realise more value by scaling solutions.

• Being more open with the market on the challenges the public sector is facing;
• Applying effective procurement routes to market;
• Creating the right culture and environment for innovation in the public sector to thrive;
• Using experimentation to test, iterate and build evidence on where innovation can add value, and scouting the market for those hard-to-find companies that can solve key problems; 
• Upskilling on the buyer and seller side on how public and private partners can co-create, work together and create a more entrepreneurial approach to solving public policy agencies.