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Sparking a broad-based innovation economy is the key to the UK’s revival

A city street with blurred pedestrians and vehicles in the background. Overlay of connected nodes and lines, symbolizing a network, is visible in the foreground.

Over the past twenty years some 100 places in the UK have attempted to build an innovation node or hub, but only about 10 of them have achieved real scale and maturity. By contrast, in the North West corridor of the US Eastern Seaboard, the area which spans from Boston to Washington DC, with a population of 50 million, about 20 locations have become scaled up innovation hubs. The UK needs to do better, with thirty to forty places to make the journey to successfully establishing fully scaled innovation hubs in the coming cycle. 

This is required because the jobs the UK has hosted in services for the past 3 cycles will decline through the combined effects of automation, digitisation, and relocation to other parts of the world. At the same time, the need to repopulate our central districts with new sources of jobs, and to better spread prosperity in order to 'level up', requires it.  But how can such new magnets of jobs and productivity be achieved?

The experience in Munich and Bavaria is salutary – a fifty-year commitment to industrial technology, skills development, and corporate growth with local, state, and federal government all providing support. There are fundamentals such as boosted demand through 'innovation hungry' firms, patient investment in R&D, airport infrastructure, skills investment, enterprise, and incentives. It has taken a combination of State and Federal roles, such as in R&D policy, markets access and connections, immigration and talent policies, public procurement, IP, and commercialisation. These are combined with local roles such as institutional alignment, promotion, land use and planning, liveability, place-making, and talent attraction.

Innovation hubs can occur anywhere, but not usually everywhere. There is a finite limit to what any national economy can host, but there is plenty of scope for the UK to grow thirty to forty places. Apparently ‘unpromising’ places have been successful in establishing innovation hubs – Philadelphia (a post-industrial city), Tel Aviv (previously a tourism destination) and Dundee (a smaller post-industrial city).

There is no compelling reason why we can’t see many more successful innovation hubs in cities such as Glasgow, Leeds, Liverpool, Newcastle, Birmingham, Sheffield Cardiff, Belfast, and many more. But for this to happen we need to learn together, avoid the obvious mistakes, and do the right things consistently. There Is much to be learned and shared from our success In Edinburgh, Manchester, Bristol, Cambridge, Oxford, and many other places in between. 

I observe a new cycle of innovation, not only in the UK, but globally. Technology acceleration is fuelling Industry 4.0, driving new tech-led growth through platformisation, and deepening the spread and use of enabling technologies (such as AI, 5G, IoT, Quantum Computing, Recognition, Satellites, and many more) with multiple applications (VR & AR, Medtech, Cleantech, FinTech, PropTech, and more). Ongoing global population and industrialisation globally also generates a greater spread in the demand for innovation. The Climate emergency and the global net-zero imperative also accelerate innovation. Meanwhile COVID is a catalyst of both agility and reform. 

Here in the UK we also have a new post EU Trading & Investment environment, Levelling Up, and new (post-Brexit) immigration policies. These seven factors have come together to forge a new cycle where we need to be simultaneously more self-sufficient, and more integrated with global markets. Both will drive innovation. 

If thirty to forty places in the UK are to succeed in this new cycle, we will need to learn how from those places which have already taken the journey and apply the lessons to the UK’s unique potential.

The blog is based on a panel discussion on ‘What enables clusters like Silicon Valley to thrive?’ at the CBI: Urban Revival Conference. Greg was joined on the panel session by Katherine Bennett CBE, Senior Vice President at Airbus, and Professor Sir Peter Gregson, CEO & Vice-Chancellor at Cranfield University.

Connected Places Catapult can help you to establish or grow innovation activity in your region. Find out more in our Global Review