Smart Specialisation Hub: Annual Report 2017 by NCUB

Annual Report 2017 This report has been created and curated by

Acknowledgements and Funders The Smart Specialisation Hub would like to thank our funders and contributors for their kind co-operation in the production of this Report. The Hub was set up to deliver place-based intelligence, analysis and support for local innovation actors; here, we reflect on progress over the past year and look to the future.

Contents Foreword: Steve Welch, Director, Smart Specialisation Hub

A Year in Hub Activity: Professor Roy Sandbach, Chair of the Hub’s Advisory Group

Supporting a Changing World Creating Cohesion Through Transformative Technologies: Oxfordshire’s SIA

Realising Lancashire and Sheffield’s Potential Through Science and Innovation Audits

Science and Innovation Audits: An Industry Perspective

A Summary of Other Work and a Call to Engage With Us

A New Way of Seeing Place and Places Place-Based Policy and Shaping Innovation Strategy: In Discussion with Dr Adrian Healy

The Industrial Strategy and How it Changes the Game

Smart Specialisation as a Methodology in a New World of Place and Places

How Universities can Contribute to Regional Growth

From Local Collaborations to Sector Deals: Universities, Place and the Industrial Strategy

Place-based Policy and Rebalancing the Economy

The Evolving Role of Place and the Hub

Analysis and Data An Update on the Hub’s Analytical Offer: Dr Etienne Bailey

Mapping England’s Innovation Activity 2: Refreshed

Outreach, Insight and Looking to the Future Evaluating a Strategic Contribution to the Bioeconomy

A Look to the Future of Place and Innovation

Foreword Welcome to the 2017 Annual Report for the Smart Specialisation Hub. Our second year has seen real breakthroughs in reach and impact, despite the ongoing complexities in the UK’s relationship with the EU.

Innovation Activity, a visual analysis at the LEP level across 19 sectors. This work was designed to raise the profile of the Hub, to encourage engagement and stimulate discussion. We believe it is a unique view of innovation across England. A refreshed version of the visualisation is included in this report.

The launch of the Industrial Strategy green paper has been a positive change in the UK, and in our formal response we welcomed its holistic and comprehensive approach: and the commitment to raise UK expenditure to 2.4% of GDP – bringing the UK into line with the OECD average – although we would urge a more ambitious globally leading target.

In the third wave of SIAs, four applicants were directed to the Hub for advice and information on how their bids could be strengthened. Those bids have now all been approved and as we head into 2018 we are looking forward to supporting all of the audits and continuing to work with our LEP and government stakeholders on harnessing the previous SIA waves.

In 2017, along with this green paper response, the Hub has played a very active part in Wave 2 Science and Innovation Audits, having some level of contact or involvement with all of the consortia. This included variously steering group participation, reviewing reports and sharing experience and convening workshops. The Hub was appreciated particularly in its capacity to share findings and experience across SIAs, use our connections to central government to raise awareness of its thinking. Moreover, the Hub’s ability to be objective and challenging to parochial concerns is greatly valued. The Hub has been shaping its analytical offer over the course of the SIA process. The observatory framework was completed for all LEPs providing a basis for crosscomparison. We have also published Mapping England’s

Steve Welch, Director, Smart Specialisation Hub

A Year in Hub Activity The UK has a vibrant and developing innovation eco-system. There is significant innovation-centric engagement across the business, university, public sector and third sector canvas.

Professor Roy Sandbach, Chair of the Hubâ&#x20AC;&#x2122;s Advisory Group

You will see from this report that there has been an increasing contribution to place-based strategy through direct engagement with Science and Innovation Audit consortia. This must continue and grow. We cannot allow SIAs to be islands of regional collaborative insight using disparate databases and evidence. They must be developed consistently to guide UK-wide and regional strategies. The Hub is perfectly placed to play a countrywide role in ensuring that this is the case.

In this context, there is also increasing collaborative dialogue across regional boundaries with Science and Innovation Audits playing a key role in driving this dialogue. The Industrial Strategy green paper recognises the need to establish where a global competitive advantage exists for the UK, both in terms of existing economic and industrial sectors and those emerging swiftly from the research base. Encouragingly, the UK university environment continues to be at the leading edge of global science and technology.

Several SIA consortia have already availed themselves of the Hubâ&#x20AC;&#x2122;s support. In this third wave, the Hub has assisted four applications. In the second wave they worked with a range of audits providing an understanding of national policy, sharing practice and experience between consortia, challenging parochialism and providing an objective point of view.

This growing and complex eco-system requires us to ensure that the economic, scientific and innovation evidence base is signposted really effectively for all those involved in policy and strategy development. In addition, we must always ensure that best practice in informing place-based innovation strategy is shared and reapplied.

In addition, our innovation strategies depend on good and useful data. The Hub, this year, has started to examine datasets that can be the source of better insights. It is especially important in our fast-changing world that strategy is agile and informed with current data and trends. Again, the Hub recognises this opportunity and is addressing it.

I am pleased that the Smart Specialisation Hub is more and more focused on the delivery of these key elements within the ecosystem.

Overall, I believe that the Smart Specialisation Hub has an important role to play as part of the nationâ&#x20AC;&#x2122;s innovation jigsaw. I hope you enjoy the 2017 report.

Supporting a Changing World The innovation and research landscape is undergoing seismic change. Through this period of uncertainty the Hub has engaged with local actors to make sense of their strengths and put robust plans in place for the future. 6

Dr Phil Clare, Matt Smart and Cleo Hanaway-Oakley of Oxford University expand on their part in the SIA process.

Creating Cohesion Through Transformative Technologies: Oxfordshire’s SIA The task of completing a large-scale audit of regional science and innovation activities was at first rather daunting. We faced a number of challenges: the sheer breadth of activity taking place in our region; the great variety of institutions and businesses involved in this area; the newness of the sectors and technologies we chose to focus on; the lack of quality data; and the need for staff capacity to conduct the process.

The breadth and variety, and potential benefits such as funding prioritisation, could easily have led to competitive behaviour, and possibly disharmony, between the groups involved. Additional partners and stakeholders were also tangentially involved. In total, 33 industry representatives and 18 non-business organisations participated. Rather than suffering from the proverbial ‘too many cooks’ problem, we were lucky enough to reap nothing but benefits from the diversity and quantity of our collaborators. Except we were not ‘lucky’ – the cohesion we experienced was fostered through a series of convivial meetings with BEIS and further meetings between ourselves, helpfully supported by members of the Smart Specialisation Hub. We continue to ensure good relations between the different sectors involved in our SIA group through the Oxfordshire Transformative Technologies Alliance Strategic Advisory Board which comprises senior representatives of the business, LEPs, research and academic communities in Oxfordshire and more broadly across the UK.

At the core of our Science Innovation Audit (SIA) was a consortium of seven members: •

Oxfordshire Local Enterprise Partnership

•

Oxford Brookes University

•

University of Oxford

•

Science and Technology Facilities Council

•

UK Atomic Energy Authority

•

The Satellite Applications Catapult

•

Oxford Academic Health Services Network

Industry Representatives Participated

Non-business Organisations Participated Oxfordshire Transformative Technologies Alliance (OTTA) is focusing on technologies that have the potential to be valuably disruptive in the future. For this exercise, we decided to focus on forward-looking and pioneering technologies rather than established sectors. Like Silicon Valley and other technology hubs, OTTA’s offer centres on the innovative and the cross-cutting nature of our components and ideas, rather than on any pre-defined end product. That is why we chose to focus on four cross-disciplinary areas: autonomous vehicles, space-led data applications, digital health, and quantum computing. While it is exciting to be working at the cutting-edge of the technological landscape, our focus on early-stage technologies has led us into some difficulties. The most notable difficultly, and the hardest to overcome, was the lack of quality data. The newness of our chosen sectors meant that there were often no historic datasets to draw on, and categorisations are often inapplicable. It was hard to detail the workforce trajectory for quantum computing, for example, when the sector is still very much in its infancy.

manufacturing areas – SIC codes were of little use to us, as only one SIC code is allocated per company, making it hard to identify businesses that have transferable, crosscutting technologies. We found a similar problem when searching through patents; the quantity of patents and licenses can misrepresent activity levels – one patent with substantial uptake is often better, as far as innovation-led growth is concerned, than 20 patents with low uptake. We also uncovered a couple of issues relating to geography. First was the ‘brass plate problem’: geographical data on companies often relates to the location of the head office when, in actual fact, much of the relevant work could be taking place in lab or facility elsewhere. Second was the fact that industrial R&D is calculated at the level of ‘The South East’ (including London); how were we supposed to relate this data to a region like Oxfordshire, a net contributor to the Exchequer?

We decided to focus on forward-looking and pioneering technologies rather than established sectors.”

The SIA process has been time consuming and challenging, but the rewards far outweigh the difficulties. In Oxfordshire, we now have an enthusiastic, committed, and cohesive Alliance, with well-thought-out – yet agile – plans for the future. We are keen to continue the process by auditing some of the areas we have not yet had the chance to explore. However, in order for us to gain the most value possible from a further SIA exercise, we will require extra resources, and the way in which manufacturing and R&D data is collected by Government needs to be further analysed and improved; there is a chance for the Smart Specialisation Hub to add real value here – the Hub would be well-placed to lead this investigation.

Even when we were able to uncover some data, it was – more often than not – difficult to use for our purposes, making it hard to produce the evidence required by Government for the SIA. Given that we were looking to find data on multi-application technologies – rather than specific products or

Andy Walker, Head of Business Growth and Innovation, Lancashire Enterprise Partnership

Realising Lancashire and Sheffield’s potential through Science and Innovation Audits Lancashire was part of the first wave Science and Innovation Audits, jointly produced with Sheffield City Region. The Smart Specialisation Hub worked with Lancashire from local, pre-bid, scoping workshops through the production of the SIA itself. Lancashire is now looking to maintain and build that relationship as we move into delivering the work programme which has flowed from the SIA analysis.

The SIA explored the innovation needs of an Advanced Manufacturing corridor which runs through the two geographies and which is one of the prime capabilities of the Northern Powerhouse. For Lancashire, the SIA crystallised our understanding of the smart specialisation strengths of the region, contributed to growing consensus on the need to work collaboratively across the north, and reinforced the opportunity to capitalise on the assets already in place within and between the two LEP areas. Realising the potential of the region’s high value manufacturing to drive economic growth and to close the productivity gap with the most prosperous parts of the UK, will be a key challenge moving forward.

In practical terms, the SIA has allowed Lancashire to examine the strengths and structures of a LEP on a similar level, such as Sheffield City Region. This has prompted our own programme to better define and manage Lancashire’s innovation ambitions with a new Innovation Plan and Board to be launched before the end of 2017. We are also fully engaged with the process across LEPs and Combined Authorities to establish Innovation North, as a platform for innovation investment across the Northern Powerhouse. In short, the SIA process has been a highly positive and successful one, with momentum and enthusiasm building over time as stakeholders have become more engaged and enthused. Partner representatives from across our universities, RTOs, science parks, incubators, the NHS and industry have provided constructive ‘check and challenge’ throughout, whilst the assembled qualitative and quantitative data have ensured that the resulting SIA Framework is grounded in robust evidence.

The process tested the hypothesis that the region has the necessary underpinning research and innovation assets in relevant areas of engineering, digital and data science to underpin a transformation in the performance of the region’s manufacturing base, to address the collective opportunities of Industry 4.0 and to sustain and grow key domestic supply chains in aerospace, automotive and energy sectors.

”Between the geographies of the Sheffield City Region and Lancashire lies a unique opportunity. One which the UK economy desperately needs. Here lie the components required to equip the UK to deliver the vision of the 4th industrial revolution, Industry 4.0. “Within our existing Northern Advanced Manufacturing Innovation Corridor, we have strong high value manufacturing industrial bases, innovative excellence, world-class science and multi-level skills training; ensuring that the region is ready to bring the right skills, people and technology to close the productivity gap not just for the North but for the UK as a whole.”

Professor Sir Keith Burnett, Vice-Chancellor, the University of Sheffield

Science and Innovation Audits: An Industry Perspective Following Jo Johnsonâ&#x20AC;&#x2122;s recent announcement of the third wave of Science and Innovation Audits (SIAs), the Hub took the opportunity to catch up with one of the Steering Group Members and Theme Lead for ICT from the East of England SIA, Jonathan Legh-Smith (Head of Partnerships & Strategic Research at BT Technology, Service and Operations), to talk about his experience and lessons learned from the process as well as the new opportunities the SIA has opened up.

Background: the rationale and approach taken for the East of England SIA.

each Theme Lead. In the case of ICT, Jonathan pulled together a team consisting of key regional representatives from academia and industry. The first challenge was to come up with a sound process and methodology to make sense of the large amount of data the audit consortium saw themselves faced with. Also, the East of England encompasses 1800 square miles and 4 Local Enterprise Partnership areas, therefore, it was not easy to decide how best to conduct an audit on such a large scale. The approach the ICT Theme adopted was to carry out some grounded research, to complement the existing quantitative data-sets, in order to get a broader view and a real sense of the sector across the whole region.

The East of England SIA, led by Steven Wilson (Head of Innovation, GCGP LEP), had been one of the eight successful bids of the second wave of SIAs. It focused on four key strengths of the region: Life Sciences, Agri-tech, Advanced Materials & Manufacturing (AM&M) and ICT. Each of these themes was led by representatives from sector specialists: Stevenage Biosciences Catalyst for Life Sciences, Rothamsted Research for Agri-tech, TWI Ltd for AM&M and BT Technology, Service and Operations for ICT. In addition, the consortium was supported by colleagues from each of the four East of England LEPs.

This grounded research took the form of a series of around 40 plus, tailored interviews with specific stakeholders from across the region. Furthermore, there was an online questionnaire to stimulate additional

As Jonathan Legh-Smith explained, the actual audit work was done by small teams associated to each of the subthemes, but slightly different approaches were taken by

Forward look: Next steps and impact of the SIA for the East of England

responses from the wider sector. Jonathan highlighted that the interviews were particularly helpful and crystallised a general view of what people thought the assets of the region were.

Looking ahead, Jonathan hopes that SIAs will be recognised as an important exercise worthy of national support. The new Industrial Strategy will focus on national themes and opportunities, and SIAs help identify what geographies such as the East of England can contribute on behalf of the UK. There will be overlaps between regions, but the SIAs have brought out the real nationally important assets, which will help guide government investment. Jonathan would like to see some more guidance and advice on how best to work together with other parts of the UK.

The next element was a so-called “Hot House”, a two-day workshop, which brought together committed individuals from the stakeholders group to discuss and process the data and evidence gathered, in order to achieve a consensual and holistic view of the ICT sector in the region in terms of its strengths, weaknesses / gaps, opportunities and threats and to validate the hypothesis, put forward in the audit: “The ICT sector has seen rapid growth in the East of England and it benefits from a very strong scientific asset base with a number of recognised ICT clusters (…) To capitalise, there ought to be greater collaboration across the region to accelerate academic and industry research and innovation activities. As part of this, a high-performance ICT infrastructure interconnecting the key universities and science parks would provide the foundation for pan-region ICT research and innovation that would enable the East of England to consolidate and strengthen its world-class position.”

With regards to research and engagement with Research Councils, Jonathan suggests that a greater understanding of the context of place could help guide research and enhance its local impact. By their nature, Research Councils and universities think of research excellence first and it’s usually about global impact and underpinning that excellence. However, taking place into account when thinking about research impact and engaging with industry, would deliver a stronger local eco-system and economic impact, in Jonathan’s view.

In conclusion, Jonathan thought that this phased approach, enabled to develop and unbiased perspective built on a broad qualitative and quantitative evidence base.

To conclude, Jonathan feels strongly that above all it’s crucial to make oneself investable as a region and have a proposition that will have national impact. Local areas need to make sure where their assets are and what they can do with them in a UK context. Jonathan believes that the SIA process helped with that.

What’s in it for industry? In Jonathan’s view, SIAs offer a clear opportunity to demonstrate and make a statement about key industrial areas of innovation strength and capability of a region/ geography. They also help to identify and understand where the gaps are and which opportunities could be leveraged through collaborations on a regional as well as national scale. In terms of the East of England, Jonathan stated that they found that there are a number of pockets of global excellence, but that those are not joined up. The SIAs have created momentum by identifying these potential linkages and value-add collaborations, which can now be developed further through targeted investments and other incentives.

In terms of the East of England, Jonathan wants to realise the idea of a regional testbed, essentially making the whole region an operational testing environment for all sectors (Agri-tech, AM&M, Lifesciences, etc.) backed by real national scale operations.

Jonathan stressed the role of LEPs as strategic place-units, which he hadn’t appreciated as much before. In his view, businesses tend not to think of LEPs and LEP boundaries, however, every business or organisation happens to be in a particular place. Understanding the wider context of how places fit together, influencing strategies through LEPs and developing a cross-LEP perspective is, therefore, crucial. Economic growth doesn’t stop at regional boundaries, so it’s important to understand one’s role in the wider eco-system and the terms of engagement to ensure alignment of strategies.

A Summary of Other Work and a Call to Engage With Us The Smart Specialisation Hub has engaged in more projects over the past year than weâ&#x20AC;&#x2122;ve been able to showcase in detail in these pages. Not every one of these has been a large project involving multiple actors and long lead-in times; indeed, we have sought to develop a more agile and responsive model, able to deliver quickly against quite tightly-focused needs or embed ourselves in steering groups to support long-term strategic direction with equal comfort.

Some of this work is summarised below. If you are a LEP or other local actor yet to fully draw on our services, and uncertain as to how we can assist, the following examples may help to clarify what sort of bespoke support we can offer.

We feel our support for Audit consortia should not end when the final report is delivered to Government. In fact, should the relationships and collaborations forged through the consortium hold, much productive work remains to be done once the dust has settled on the Audit itself. To this end, we remain active in groups such as Innovation South, a consortium which has resolved to make good on the ambitions set out in its Audit document, develop its own regional identity and fully realise its potential. We are of course ready to augment the ongoing deliberations of previous Audit collectives in a similar way if desired.

Further to the convening power we exercised in supporting the first Wave of Science and Innovation Audits, and the more strategic oversight we were able to lend to the second Wave through our presence on various steering groups, we have also engaged at early stage with the most recent tranche of Audits. The Hub provided light-touch advice to four third-Wave consortia - supporting the development of their expressions of interest and helping them across the line to approval. We deployed policy, best-practice and analytical insight to refine their respective offers; Daniel Stevens of the Knowledge Quarter’s successful bid remarked: ‘The Department for Business, Energy and Industrial Strategy invited us to engage the Smart Specialisation Hub to support the final development of our expression of interest. The Hub is close to the Audit process and has worked closely with other consortia so we were happy to bring them on board. They provided quick and helpful feedback on our draft, helping to triangulate some of the national imperatives that inform the design of the Audits and their interaction with place policy. We’re pleased to report that our application to undertake an Audit was approved and we look forward to continuing to work with the Hub as we bring the consortium to life and really animate the potential of the Audit.’ We have taken up steering group roles on three of these consortia, and through our Chair Professor Roy Sandbach OBE, we have offered further assistance to eight more.

Many Local Enterprise Partnerships are presently refreshing their Strategic Economic Plans, or considering local Industrial Strategies. Accordingly we are turning our policy and analytical insights to the support of this process and have early-stage engagement with several LEPs. If you are considering a refresh of your SEP, or the adoption of a local Industrial Strategy in response to Government’s white paper, please do get in touch; we’d be delighted to explore ways to help.

We continue to support bids for European Regional Development Funds under the relevant priority axes, notwithstanding relatively constrained demand post-referendum. We have attended and co-facilitated ERDF convening and scoping events held by Local Enterprise Partnerships such as Coast to Capital and the East of England LEP. We have also supplied light-touch support to projects developed to provide opportunities for SMEs in the Humber and York, North Yorkshire and the East Riding LEPs; namely, a programme of innovation vouchers, an R&D scheme and a low-carbon R&D scheme, approved late 2016 and launched to SMEs this year. And we have continued to partner with Falmouth University, committing to assist their plans for an ‘Immersive Cornwall’ Priority Axis 1 bid which ties into strengths and assets identified through their Science and Innovation Audit, our own data work and the objectives of the Industrial Strategy. Despite the challenges inherent in creating appetite for ERDF projects in the present climate, sourcing sufficient match funding and pulling together consortia with critical mass, we would urge LEPs and others to pursue the remaining funds in forthcoming calls and would be pleased to assist any that choose to do so.

We believe the Hub’s role should also move beyond individual support. In response to the needs of our stakeholders, we have undertaken broader pieces of data work across substantial economic geographies including the Northern Powerhouse. You can read more on these workstreams both elsewhere in these pages and on our website in the coming months.

A New Way of Seeing Place and Places Understanding place-based innovation in the context of fundamental changes in the architecture is key to making the right decisions. The Hub is a still point in this shifting landscape and draws together expert input to reflect on the emerging state of play. 16

Place-Based Policy and Shaping Innovation Strategy: In Discussion with Dr Adrian Healy The Hub is fortunate to be able to draw on the gathered expertise of many thoughtleaders in place-based innovation, notably through the esteemed members of our Advisory Group. In a transformative period for the sectors we support, debates of real vitality are taking place; and to deliver the best value for stakeholders and funders, we play an active part.

how the UK’s departure from the EU might impact funding arrangements nationally and locally; how new measures such as the Shared Prosperity Fund might be designed to best serve the needs of places whilst also encouraging the pursuit of absolute excellence; and what the future might hold for innovation in the context of inclusive growth.

Whether discussions are pertaining to the activities of UKRI, legacy arrangements arising from the UK’s departure from the European Union or the remit and delivery of the mooted Shared Prosperity Fund – the time is ripe to influence direction of travel, and we want to draw on perspectives from public and private, academic and business sources.

We’re seeing a tension between balancing the needs of places and the understandable desire to support innovation excellence. In this context, and with Brexit hovering on the horizon, can Smart Specialisation - or other methodologies still support the needs of places?

Our policy manager Andrew Basu-McGowan sat down with Dr Adrian Healy, Research Associate at Cardiff University’s School of Geography and Planning - acknowledged expert on innovation and regional economic development and member of our Advisory Group - to discuss some of the most pressing issues around the people and places we seek to support. Among other topics, they discussed whether Smart Specialisation, or indeed other methodologies, could still support places;

Essentially, yes – but it really depends on what needs we’re talking about. Smart Specialisation can never solve every

One of the good things about the Smart Specialisation process is engagement with business, which really helps to drive intelligence in different directions.”

Certainly places (whether we mean LEP areas, local or combined authorities or devolved administrations) are dependent on relevant funding streams at scale. The UK’s departure from the EU is highly likely to impact funding arrangements nationally and locally. What steps could be taken to support the transition to new approaches – and how should new funds or support be constituted to best serve the needs of places, and balance excellence with the need for economic uplift and better distribution of high GVA jobs?

conundrum on its own. It’s sometimes used as shorthand for innovation policy itself and that’s not going to be sufficient. As one aspect of innovation policy, though, it can be useful. I think it’s one of two things: either a means of focusing activity in a limited set of areas; or, more of an ethos of approach. But either way, we’d need to get more consistent at implementing it.

The transition point is key. Can places expect to receive the same levels of funding as in the past and if not, is there a sound justification for that? Even where funds are withdrawn or scaled back, this needs to be managed carefully over a period of time - because institutional structures grow up around funding. We think predominantly about the public profile of funds, rather than the ‘backroom’ stuff that needs supporting - for example the sort of architectures that are paid for through technical assistance. So we need to think about transitional arrangements for them too.

We need to be clear whether we mean Smart Specialisation as a concept or Smart Specialisation Strategies as a practice. And practical approaches are vital to implementation; for example, at Cardiff we’ve worked with the Welsh Government on Innovation Policy Wales, and the lessons they’ve picked up through developing that have been invaluable. Some approaches they attempted were more successful than others – so they simply modified or moved away from things that didn’t work. Smart Specialisation evangelists would agree that a strategy should be a learning process, rather than setting anything in stone.

Constituting new funds, we need to be careful around saying ‘excellence’. Excellence in what? The EU also only apply the excellence metric to their research funds. It’s not especially useful to the ERDF cohesion agenda. I think a shared prosperity fund should be about innovation, rather than research; unless that research expenditure is building capacity in places which are underperforming, so you can couple the innovation to building the local economy. A better distribution of high GVA jobs can flow from that. So then, should excellent research be prioritised or placed in areas with low comparative GVA? If so, this requires place-based strategies which identify how to maximise spill-overs.

In simple terms, Smart Specialisation as a concept is good. But it lives in its practice and underlying strategic approaches. We risk conflating these sometimes and writing off the concept itself thanks to poor implementation. The point concerning the needs of places also raises an interesting question – which places, and which needs? How big is a viable ‘place’?

What is the role of place-based intelligence in informing decision-making and decision-makers?

Is it time to reconsider how we talk about innovation and its distributional impacts?

If you want place-based strategies, there’s a big role for local intelligence to inform decision-makers; it’s vital to understand the distinctiveness of a place. Places can essentially be living labs, learning from each other; but in doing this they need to use local intelligence and data as a synchronous part of their process. Place-based intelligence and data is of immense value; yes, it can be anecdotal, but it also offers a richer set of knowledge; and it’s still there to be challenged. There’s actually a whole lot of social media intelligence out there now too, but we’re not too good at engaging it yet.

Very much so. We can’t rely on trickle-down into places, at least not unaided. We might be able to construct mechanisms and spill-overs to help direct it, but we have to think about the distributional dynamics that underpin the process. It’s important to note that distributing those much sought-after high GVA jobs we spoke about earlier don’t necessarily lead to a measured or balanced economy – they’re just one part of it. Medium GVA jobs are also very good, let’s not forget. They might be serving local markets, they might not have huge export potential, but they might employ two or three people and that can be an important contribution to local economies. This is where a shared prosperity fund might in fact miss the more fundamental enterprise and focus on high innovation only – which I think would be a mistake. And of course, companies who buy into the growth and export ethos might find they’re not in the right place to start with and need to migrate from their locality. We need to ensure our support mechanisms support more than just a small sliver of the economy.

And one of the good things about the Smart Specialisation process is engagement with business, which really helps to drive intelligence in different directions; it’s vital to maintain an ongoing dialogue and not to lose that engagement.

To what extent should public and private methods be blended to support initiatives in places? How impactful can public interventions really be?

Really, all of this is all about the people involved. Everything that works well comes down to having knowledgeable individuals, supported and enabled to take risks, who are working in this space because they want to. We need to encourage that capacity rather than turning everyone into bureaucrats!

Both public and private approaches and methods can support initiatives in places and the balance between the two is important. I mean anything badly planned, no matter what its provenance, is unlikely to work. We’ve learnt a lot of lessons over the last 20 years; we know some things work and some don’t, in different times and places. We have a good repository of knowledge and – in much the same way an evolving innovation strategy should do - we need to keep what works and ditch what doesn’t. The transition from EU to UK structures could – potentially – give policymakers and opportunity to make things simpler; but there’s lots of embedded knowledge in structural fund bodies in the UK which can be deployed to help new interventions going forward. Managing transition is so important, in fact – so many key people with great knowledge of what works will retire, or move to other roles. When the Regional Development Agencies were wound up, so much knowledge was lost – let’s not let that happen again.

And of course this should go without saying, but: it takes time to see impacts. You can’t look for results in one to three years, it can actually take five to seven. And that’s significant for something like the prosperity fund; getting the UK Government to commit to something that runs beyond the lifetime of a Parliament would be extremely useful! In fact one of the best features of European structural funds is that they’re so long-term. This builds in confidence and enables planning, strategising and distribution of your resources. Longer-term commitments give businesses a degree of certainty, let universities get involved to the fullest and of course, with a seven year programme you can spend a year on planning rather than a couple of months – and that’s incredibly valuable in terms of anticipating problems that can surface later down the line. We have the knowledge, and the will is out there – we just need to work and think carefully and be sensitive to all the effects of what we do.

The Industrial Strategy and How it Changes the Game Ross Burton, the Hub’s Stakeholder Engagement Manager - and interim Head of Place at the Knowledge Transfer Network - considers how the forthcoming Industrial Strategy white paper might both set the UK on the front foot in preparation for the fourth Industrial Revolution and serve the rebalancing agenda.

Industrial Strategy highlighted the need “to ensure that every place meets its potential by working to close the gap between our best performing companies, industries, places and people and those which are less productive.”

The Prime Minister in her first speech to the nation outside of Number 10 in July 2016 spoke of the need to make Britain work for all; that inequality must be tackled, and our society and economy made fairer. Although not the sole contributor to this ambition the Industrial Strategy has the potential to play a significant role, a point underscored by it being elevated to departmental level with the creation of the Department for Business, Energy and Industrial Strategy on the 14th July 2016.

The United Kingdom is currently facing a huge amount of uncertainty, both domestic and international. Further there are specific and general challenges to the UK economy, namely: Brexit, low productivity, low wages, a skills shortage, and disruptive technologies, particularly increased automation and artificial intelligence – the mainstays of the fourth Industrial Revolution. However, we are not alone in facing some (if not all) of these challenges and, although they pose risks, there are also opportunities. In our response to the Green Paper it was our contention that Industrial Strategy needed to acknowledge both of these and position the UK to mitigate the former and seize the latter.

The announcement of Greg Clark as Minister gave a clear indication that location would be important part of the Industrial Strategy given his support for the Coalition Government’s localism agenda, and his role in supporting the establishment of Local Enterprise Partnerships. A point which was underscored in the Minister’s introduction to the Industrial Strategy Green Paper that

Beyond Innovation

those locations – and this is seen as an innovation investment. In Cambridge, continued development in their research capability is limited by the availability of affordable housing for technicians – this is inherently a barrier to innovation. Skills shortages are a problem everywhere.

The Industrial Strategy Green Paper was published for consultation in January of 2017. The Hub’s response is available on our website. We welcomed the paper and the breadth of its then ten pillars that provided an excellent opportunity to tackle the structural issues and capitalise on the advantages of the UK’s economy in a holistic manner. This reflects our conversations with Local Enterprise Partnerships and others through our involvement in the Science and Innovation Audits, which demonstrated that there are many elements that impact current and future economic potential and these can cut across traditional allocations of funding, strategy and planning.

We see the Industrial Strategy as a key opportunity to acknowledge this complexity and to create a more flexible and adaptable system than has been seen before. We believe that to do this effectively a mix of local, regional and national interventions will be required.

Industrial Revolution 4.0 The UK’s productivity problem is well documented, and despite our high level of employment wages are low. These two factors are linked and at some level drive the imbalance of economic prosperity across the UK’s geography and social strata. However, the fourth industrial revolution – digitisation and automation particularly through the adoption of Artificial Intelligence in industry – has the potential to fundamentally alter industry and employment.

Traditionally elements like transport, skills, and housing have been thought of as separate streams with innovation support largely centred on working with companies and universities on research and commercialisation; however, the deep interrelationship between these elements has now come to the fore. In Oxford for example, the university has funded a bus service between the city and the Harwell Campus specifically to connect the researchers and academics at

The leaders in Industrial Revolution 4.0 are not yet determined. The UK must be ready to capitalise on this increased digitisation and automation and must put itself forward as one of the leaders in developing and exploiting the opportunities this presents.

The Smart Specialisation Hub remains fully supportive of the Industrial Strategy and the holistic approach to economic development it represents.

There is also a cautionary point. There are significant gains to be made but the impact on jobs could be equally significant – particularly locally and in the short-term. Innovation and the adoption of new technology and work practices drive better productivity - but often at the cost of jobs. As the UK deindustrialised following the Second World War there was a failure to retrain people to make them fit for the changing economy; we must articulate the benefits of advancement and change, the capacity of new technologies to transform workplaces, and we must bring people along as we do. If we do not we risk alienating and indeed damaging the lives of people, with attendant potential for the growth of new Luddites, resistant to change and progress. And progress must be maintained. Technological advances will happen and will impact the UK regardless of whether they are adopted here or not. The result of change can be higher and better-paid jobs, but we must demonstrate that benefits will be felt widely. We also need to help people adjust, both in terms of hard-skills and also in acknowledging and adapting to the need for or expectation of regular career changes. The Industrial Strategy has a key role in addressing this.

Productivity and Balanced Growth Industrial Revolution 4.0 offers a significant opportunity to address productivity, but it is not the sole lever. We also need to encourage more rapid adoption of existing innovations – in short innovation diffusion. That said, not all businesses need cutting edge technology or ideas, nor are ready to adopt them. We have spoken to Local Enterprise Partnerships and others, and it is clear that there is a long tail of low or non-innovative companies. In these cases adoption of existing technology and ideas could have a significant impact on their productivity and performance.

We believe place is particularly important, as it holds the key to rebalancing the economy and addressing inequalities in our society. Also it is at the local level that impacts of change will be most keenly felt, taking the benefits of business growth but bearing the brunt in employment issues caused by industrial developments. Consequently it is at a local level that these issues are best addressed.

Diffusion needs to be supported at all levels. Traditional innovation support has tended to focus on novelty – new-to-the-world thinking. However, there are significant opportunities of large volume, smaller impact interventions based on new-to-me technology rolling out behind the first adopters. There is also substantial unexploited how-to knowledge in universities and companies in the form of learning gained in the pursuit of other development – where there is value in exploiting not only the final technology but also the method of its development.

If the UK is to be successful we need to take advantage of the unique potential that everywhere has - and the Smart Specialisation Hub will support local and national actors in this, building on our own data and that captured through Science and Innovation Audits to surface the unique strengths of places. We support the rebalancing agenda and the need to make the economy work for all. However, we do not believe that this is should be viewed as a zero sum game. The south-east in general, and the Golden Triangle, are significant assets and need to be supported to yield maximum benefit for the UK. We need to work harder at transporting the value of this region and the capital to rest of the UK. It is our belief that to compete on a global scale, we should build all-UK capability in key sectors, linking and de-duplicating capabilities wherever possible – and proactively support cross-border collaboration.

A range of interventions and actors are needed to deliver diffusion; we see central government and growth hubs as key actors supporting a range of companies, while Innovate UK with its role in UK Research and Innovation and family of tools and networks is perfectly placed to drive the adoption of more cutting edge ideas.

Five Pillars and the Role of Place

The Smart Specialisation Hub remains fully supportive of the breadth of the Industrial Strategy and the holistic approach to economic development it represents. The importance of place-based understanding of development and investment is paramount in delivering a successful economy that works for all. The Hub is ready to continue to support the development and implantation of the Industrial Strategy in partnership with our stakeholders in national and local government.

Although, at the time of writing the Industrial Strategy white paper has not been published, we know that the number of pillars has been reduced from ten to five. This simplification and rationalisation makes sense and focuses the strategy while retaining the broad holistic approach outlined in the green paper. In the revised Industrial Strategy innovation and place retain their importance, and the Hub fully supports this.

Andrew Basu-McGowan, The Hub’s Policy Manager at the National Centre for Universities and Business (NCUB), reflects on the changing context in which the Hub now operates.

Smart Specialisation as a Methodology in a New World of Place and Places It’s no secret that the Smart Specialisation Hub was set up in an altogether different geopolitical context. Our early materials, meetings and workshops showcased the very practical financial rationale that underpinned our remit: access to the some £600m (give or take an exchange rate fluctuation or two) of European Regional Development Fund (ERDF) innovation pot available under the relevant priority axes.

mechanism of England’s national Smart Specialisation Strategy and the wider growth agenda.

Such access is dependent on the development of a Research and Innovation Strategy for Smart Specialisation. The Hub would help local areas to identify their worldleading innovative specialisms, and evaluate, verify and endorse strong project bids into this pot. Through us, applications for funds with a convincing rationale and supportive evidence base would find their path to approval somewhat smoothed – and these successful applications would be crucial moving parts in the

Post-Brexit – or at least post-referendum, but before we clearly understand how we might, or might not, work with the European Union on cohesion and innovation funds actors across the ecosystem have come to terms with a different reality. With the powerful incentive of structural funds now both practically and perceptually diminished,

we have had to define ourselves more flexibly to meet the needs of our stakeholders based on their detailed feedback; and carefully weigh how we can deliver the greatest impact. It’s certainly clear that Smart Specialisation is freighted with disaffecting elements – the terminology itself could alienate the very people it needed to engage to make ‘bottom-up entrepreneurial discovery ’ a reality. In its focus on world-leading emergent specialisms (at least, as popularly understood), it turned off some localities which didn’t seem themselves playing in that space but were still replete with other assets, and who felt a focus on Smart Specialisation techniques was exclusionary. It is of course only fair to note that the methodology is not as rigid as is sometimes believed, and that learning, modification and evolution within Smart Specialisation strategies are not alien concepts. Smart Specialisation allows for the need to address major societal challenges, for example. But conceptually, it can be something of a difficult sell.

support successful ERDF projects, and we are connected with LEP and local authority areas which are currently drawing up plans for anticipated future calls. Our data has been deployed in pursuit of a better common understanding of specialisms and asset bases in local areas across the country. But it’s the contextual oversight that helps us add the most consistent value across the piece. The expertise we fed into the second wave Science and Innovation Audits, and selected Wave 3 applications, extended beyond the realm of simple sectoral strengths and Smart Specialisation strategy alignment. The contextual understanding of local growth, innovation policy, project design and best practice adds up to an altogether more wrap-around offer. We are told these ‘softer’ insights, sitting as they do outside tightly-defined Smart Specialisation methods and practices, have the potential to deliver most profoundly for places and people in less economically advantaged parts of the country; that we can usefully triangulate a host of national and local inputs into innovation strategy design and really help localities feel more connected to the outside world. It’s here that we can serve the rebalancing agenda – surfacing and supporting not just absolute excellence, but relative and potential excellence.

We can now draw insights in skills, infrastructure and other critical components of a successful advanced economy into our offer.” Of course Smart Specialisation remains at the heart of what we do. But we’ve been fortunate to be able to leaven it with a more holistic offer, a more balanced methodology and greater sensitivity to the needs of places in support of the rebalancing agenda. We can now draw insights in skills, infrastructure and other critical components of a successful advanced economy into our offer. As Professor Adrian Healy notes elsewhere in this report, whilst Smart Specialisation has value as a means of focusing activity in a defined set of areas, it should not be regarded as the only tool or solution – or indeed as shorthand for coherent innovation policy. And for example, we cannot constrain ourselves to prioritising solely the creation of high GVA jobs when medium GVA jobs are in many areas more sustainable and highly beneficial – and the foundational economy that supports them should also be enriched and empowered.

In the present climate, cleaving tightly and solely to Smart Specialisation as an ideal is a fundamentally limited position, which fails to properly deploy the expertise we’ve gathered as an organisation and singularly underserves the local actors who need our support. As we accelerate through the project’s last formal year of operation, we have been faced with the choice of confining ourselves to delivering against a narrow set of ambitions, or responding to the real needs of stakeholders. We hope the case studies and data assembled in this report speak to the breadth of our new ambition as we look to deliver ever greater impact over the coming months.

This broadening of focus in no way diffuses or obscures our core remit; and indeed, stakeholders value our fundamental data insights and roots in Smart Specialisation. As seen elsewhere in this document, even in the present circumstances the latter has helped us

Tom Frostick, Policy and Programmes Manager, University Alliance, on universities’ role in their places.

How Universities can Contribute to Regional Growth Eighteen months on from the EU referendum, the uncertainty surrounding Brexit shows little sign of lifting. At the same time, the government remains lucid – confident even – in its ambitions for the UK economy.

For universities, this is a significant opportunity to contribute. Most institutions, including those in University Alliance, are deeply rooted in their surrounding region with missions that support local people and communities. They not only attract students and skilled staff from elsewhere but also businesses which choose to invest in places where the expertise and facilities of a university are readily available. When it comes to the industrial strategy, universities offer critical strengths as anchor institutions which can be captured in three broad points.

The arrival of Theresa May into Number 10, and her rebranding of the Business department to include Energy and Industrial Strategy in 2016, marked an end to the free market approach of her predecessor and the beginning of a bold, interventionist stance on economic affairs. Despite all that has happened since, the promise to change the way the economy works lives on. The industrial strategy is something of a one-nation attempt to address the regional imbalances which drove the referendum result. This is clear in both the language the government uses around “a country that works for everyone” and its plans for investing in skills and innovation in parts of Britain that have fallen behind on growth, productivity and opportunity. Place, a word which featured more than a hundred times in the Green Paper earlier in the year, has become a major focus of government policy.

First, we play a substantive role in bridging administrative geographies where there is limited match up with local ecosystems. In the East Midlands, for instance, the food and drink industry sits in a cluster that stretches across the East of England, from Suffolk up to Hull. The automotive industry, on the other hand, has an East to West Midlands geography –

is often the best place to seek technical assistance. At Liverpool John Moores, for instance, a new business support programme LCR4.0 is connecting the region’s manufacturers and helping them harness digital technologies. Sheffield Hallam meanwhile runs ‘Fix It Friday’ drop-in sessions offering firms free targeted help from academic staff and business experts. Given that small firms make up 99% of all businesses, exploiting the capacity of universities to engage with them is critical for raising the UK’s economic performance.

from an aerospace focus at Rolls Royce in Derby, to Coventry University and Jaguar Land Rover’s car expertise, to Siemens’ turbine technology in the east. Each of these industries has supply chains spanning the entire Midlands and East Anglia region which universities like Coventry are able to connect. This networked leadership role can further be seen in our involvement with regional administrations. Under the Bristol Health Partners initiative, for instance, the University of the West of England is collaborating with Bristol City Council, local NHS Trusts and others to integrate the health and care economy of the South West. Universities are also strongly represented on local enterprise partnerships and city region structures such as the newly created combined authorities. In coordinating a sub-national approach to industrial strategy, we are one of the first places the government should look.

99%

Second, universities are closely linked to high-value industry in the regions with expertise that aligns to local sector strengths. Examples include Coventry University and Unipart Group jointly investing in a new Institute for Advanced Manufacturing and Engineering and ‘faculty on

Small firms make up 99% of all businesses

The most important vehicle for success is a system of funding that manages an appropriate balance of risk and reward.”

If we accept then that universities have a significant role to play in industrial strategy, how can we elicit the best from them? There are many possible answers to this question: parity of esteem for all innovation activities (success shouldn’t just be pegged to numbers of university spin-outs), greater competition for Research Council funding, more incubators in regions outside London to name but a few. But probably the most important vehicle for success is a system of funding that manages an appropriate balance of risk and reward. This balanced portfolio approach should govern the distribution of all new investments under the Industrial Strategy Challenge Fund, as well as other important streams such as the UK Shared Prosperity Fund – which is set to replace structural funding once Britain leaves the EU.

the factory floor’, GE Aviation in Cardiff which runs a talent scheme with the University of South Wales to ensure a long pipeline of skills, and the University of Greenwich which offers degree apprenticeships in engineering and IT to fill skills gaps identified by the car manufacturer Ford. There are lots of advantages to big businesses collaborating with a university but one clear benefit is the ability to meet the strategic needs of the region including skills shortages.

In taking these steps, the government will capture the broadest range and geographical spread of activities, and the industrial strategy should go at least some way towards delivering “a country that works for everyone”.

A third way that universities are natural delivery partners for the industrial strategy is their involvement with small businesses. For a firm with growth potential, a university

James Ransom, Policy Researcher at Universities UK, sets out some of the underpinning role of universities in local growth and place policy.

From Local Collaborations to Sector Deals: Universities, Place and the Industrial Strategy In 1975, government officials published ‘A ten-year industrial strategy for Britain’. Although the volume was slim (a mere ten pages), universities were not mentioned once. Fast forward to today, and this year’s industrial strategy green paper mentions universities 63 times.

This is an accurate reflection of the important role universities play in their local area – and a wider appreciation of this in government – but it is also a signal that universities are a driving force for the future prosperity of the UK as a whole.

city deals and growth deals. ‘Sector deals’ are encouraged between industries and government as part of the industrial strategy (see What universities can offer sector deals). Furthermore, the Conservative Party manifesto proposed that ‘Combined Authorities and Local Enterprise Partnerships will be tasked with developing local industrial strategies… with LEPs set to be put on a statutory footing’.

The industrial strategy comes amid wider moves towards devolution and an evolving local growth policy, which is shaping the environment that universities operate in. Following a raft of devolution deals, six mayors have been elected in Combined Authority areas. Policy attention is turning to the successor programmes to the Local Growth Fund and European Structural and Investment Funds – likely to take the form of a ‘UK Shared Prosperity Fund’, and linked to the objectives of the industrial strategy. Universities are accessing new forms of funding such as bonds, loans and funds from localised fiscal policy. Wales and Scotland are developing or have recently implemented

The landscape is therefore complex, but strong local partnerships is a common thread. We welcome this, and building on the significant economic and social role of universities in their local area is the foundation of UUK’s green paper response.1 Universities not only contribute to broader economic growth which benefits the entirety of the UK, they also make significant contributions at the local and regional level (UUK recently produced regional briefings which include some great examples of this).2

1 www.universitiesuk.ac.uk/policy-and-analysis/reports/Documents/2017/uuk-response-industrial-strategy-green-paper.pdf 2

www.universitiesuk.ac.uk/policy-and-analysis/reports/Pages/industrial-strategy-universities-regional-briefings.aspx

We believe the strong local role of universities can be strengthened further, in particular by building on local collaborations of universities. Our submission to the Autumn Budget 2017 set out three recommendations for government on how we can do this:

Better matching of graduate skills with employer demand at the local level:

This could involve government supporting networks of local universities, employers and stakeholders to encourage employer demand for graduate employment and work experience and match the best possible candidates to available opportunities. These networks could also monitor skills gaps at the local level, encourage collaborative development of courses and programmes to address local needs, and help address disparities in high level skills between local areas. These local networks could build on the experience of Hefceâ&#x20AC;&#x2122;s National Collaborative Outreach Programme, where local consortia help the most disadvantaged young people in England to progress into higher education.

Create stronger pathways through technical education from greater local collaboration:

This could involve systematically reviewing the barriers to increased local collaboration and creation of collaborative models between universities, further education colleges and schools, and addressing these barriers.

Better matching of companies and investors to relevant university expertise:

Targeted support should be given to developing local or regional networks of universities with a particular focus on signposting, supporting and incubating businesses, and training (for example university-run workshops to support SMEs with business proposal writing). There are several possible mechanisms to deliver this: setting up more University Enterprise Zones, through additional Higher Education Innovation Funding, the forthcoming UK Shared Prosperity Fund, through business rate relief or VAT exemptions, or innovation vouchers.3

These recommendations would help tackle three particularly pressing issues facing areas looking to boost productivity and employment: the wide higher-level skills disparities that exist across local labour markets; clearer pathways into, and through, technical education, with clear and understandable information on the options available to students; and enabling businesses (particularly SMEs) to access university expertise as required. The industrial strategy presents an excellent opportunity to further strengthen the contribution of universities to local growth. 3 www.universitiesuk.ac.uk/policy-and-analysis/reports/Pages/uuk-response-autumn-budget-2017.aspx

What universities can offer sector deals As part of the industrial strategy, the government has encouraged sectors to come together to identify what companies need in order to enhance their competitiveness as a sector. Universities are natural partners for business in developing sector deals:

Universities support research commercialisation

Universities work with their researchers to develop their technologies into commercially viable opportunities through licensing, spin-out company formation and consulting. They enable companies to access cutting edge research through active interaction between business leaders and investors with university researchers and spinout companies.

Universities promote innovation

Staff and students from universities work with businesses to develop new products and services, and increase productivity. Working collectively, many universities offer equipment-sharing schemes to help businesses access cutting-edge technologies. Small and medium sized companies have also used voucher schemes to bring the latest university expertise into their business and drive innovation.

Universities increase exports

As globally connected institutions, universities can combine business knowledge and marketing expertise with international partnerships help increase exports to new markets.

Universities provide strong leadership

Universities can help provide the strong leadership needed for sector deals to help deliver upgrades in productivity. Given their connections and national and international reach, they can also identify shared sectoral challenges and opportunities.

Universities train people in vital skills

Universities provide the training and skills to increase sector capacity. But skills needs are often cross-disciplinary: science or engineering-based sectors require business skills for commercialisation, for example. The Life Science sector deal report acknowledges this, stating that there is a crucial role for universities and business schools in providing a high level of management and entrepreneurship training.

Universities offer experience in accessing funding

Universities have historically often provided the necessary match funding to unlock investment spending for local projects from European Structural and Investment Funds and the UK governmentâ&#x20AC;&#x2122;s Local Growth Fund. Yet they can often also offer experience of accessing funding streams such as Innovate UK and Research Council funding, as well as national or international sources of finance such as bonds and loans.

Universities connect regions

A comprehensive sector deal is unlikely to be confined to one town or city in the UK. Universities and their staff often have formal and informal networks stretching the UK (and beyond) in sector areas. They have knowledge of centres of excellence and expertise and areas with emerging strengths, and the businesses that often spin out from or locate near universities.

4 www.gov.uk/government/publications/life-sciences-industrial-strategy 5 www.universitiesuk.ac.uk/policy-and-analysis/reports/Pages/funding-local-development.aspx

Place-based Policy and Rebalancing the Economy Paul Drabwell, Deputy Director for Place at the Department for Business, Energy, and Industrial Strategy (BEIS), discusses the importance of place within the new Industrial Strategy.

‘bottom-up’ approaches is enabling Government to build a better picture of regional innovation capabilities that will help to inform place policy.

UK Government is working to improve productivity by rebalancing the economy and building capacity and capability across the country. Place and innovation are at the heart of the Industrial Strategy; recognising that increasingly we cluster not around natural resources but around other people with skills and ideas.

This evidence base can also help facilitate collaborations between diverse innovation actors to continually drive more productive and sustainable investments in innovation at all levels. Bridging the gap between business, academia, research and Government can help turn great ideas into reality, by bringing together expertise to work collaboratively to develop new products and services to generate economic growth.

Announced at Autumn Statement 2016, the Industrial Strategy is designed to be a long-term programme focused on building a successful productive economy. Innovation is a key driver of growth, and addressing the challenges – and opportunities – faced by different places depends on local knowledge, commitment and leadership.

Smart Specialisation as a Europe-wide approach to economic development forms the basis for European Structural and Investment Fund interventions. However, with departure from the European Union expected in 2019, we have an opportunity to consider the future of growth and productivity funding, targeting a new domestic fund specifically to UK needs. The UK Shared Prosperity Fund will focus investment to reduce inequalities within and between communities across all four nations, increase productivity and deliver inclusive growth based on our modern industrial strategy.

More than ever, it is important to focus on areas of real comparative advantage to ensure that investment and resource are targeted where they can have the greatest transformative impact. This can be achieved by developing a good evidence base. The availability of such data together with knowledge of local innovation needs, can help build on regional capacities and capabilities in recognition of the diversity of localities. Smart Specialisation is a key initiative for building this knowledge base. Government is seeking to strengthen the evidence base for understanding the country’s innovation assets and capabilities at regional level. Tasked with delivering England’s Smart Specialisation, the Hub is contributing towards this goal by bringing together publically available data on innovation to help key local players identify and exploit their regions innovation capabilities, to make firmer calls for funding from Government to join up with national policy.

In a significant reform of the innovation landscape, the establishment of UK Research and Innovation which will form in April 2018, seeks to build collaborative partnerships and promote stronger commercialisation and business links. Incorporating the seven Research Councils, Innovate UK and the research and knowledge exchange functions undertaken by Hefce (England only), the body will catalyse a more strategic, agile and interdisciplinary approach to help the UK strengthen its competitiveness through research and innovation, as part of the new Industrial Strategy. The data being generated by the Hub is contributing towards a growing picture of the UK’s innovation system.

Complementing the work of Smart Specialisation, are the Science and Innovation Audits which seek to identify and validate areas of potential global competitive advantages across the UK. The data being generated by these

Howard Partridge, Smart Specialisation Manager, Innovate UK

The Evolving Role of Place and the Hub A year ago, in the last Smart Specialisation Hub report, I wrote about the need for economies to understand and exploit their unique strengths if they are to succeed in a rapidly changing global economy. Today the pace of change seems faster than ever and the need to drive domestic productivity and seize opportunities even more pressing.

in this way to give an evidence-based view of each LEP’s innovation strengths.

Since then, the Government has started to shape a new Industrial Strategy in which Innovation and Place are two key “pillars”. Where they intersect, it emphasises the importance of working with local areas to help develop world-class, research- and innovation-driven industry clusters based around local expertise.

The richness of that data presents a new challenge; making comparisons to understand areas’ relative strengths and to provide a national picture of where they lie. The Hub has visualised this in “Mapping England’s Innovation Activity” that appears elsewhere in this report. We accept that this is not perfect. In some cases, it represents activity rather than strength and we have drawn on the views of our own experts to say something about the quality of those activities and the human dimension of networks that don’t appear and can’t be measured in any data. Like the Observatory, it is a first.

If this is to succeed, and if areas are to make a case for their global competitiveness, it will be important for them to understand what their comparative innovation strengths are, to be able to demonstrate the quality of the underlying evidence and their strategies for building on those strengths. Gathering the evidence for Smart Specialisation, through local strategic economic plans and bringing this together with the more recent Science and Innovation Audits, enables local leaders to define, and validate those strengths. This, in order to focus support for the sectors and businesses that have the greatest innovation and growth potential.

However, because it is much easier to understand the visualisation and see how one LEP area compares to others, it has furthered understanding of the Hub’s data framework and sparked much useful debate on the accuracy of the picture that paints. That input will help the Hub to understand where data alone doesn’t reveal the whole picture and so improve this mapping.

As well as developing interesting and important evidence, Science and Innovation Audits have brought together LEPs, academia and industry into powerful consortia that have encouraged a higher-level thinking and cross-border working. In some cases, that energy and momentum have continued; for example, a powerful collective identity is emerging from Innovation South, complementing the ‘Midlands Engine’ and ‘Northern Powerhouse’, and demonstrating that lasting collaborations represent one of the most significant outcomes of the process.

All of this is part of a growing intelligence and evidence base that is increasingly valuable to local areas working to improve their focus on the capabilities that can best drive their economic growth, supporting their planning and investment decisions. It is also an important and hugely valuable resource for government in determining how it will achieve its aims of increasing productivity and rebalancing the economy to ensure that it works for all, or “getting all parts of the country firing on all cylinders”. Place has a renewed and central importance to how we think about innovation, and drivers of growth. It is important that strategy and decisions at every level are based upon robust and readily understandable evidence. So, the Smart Specialisation Hub offers us and local strategy makers a capability that will become even more relevant as we move forward.

The Hub has achieved a major milestone, completing the Observatory of Local Enterprise Partnership (LEP) innovation profiles. This looks at a range of indicators of academic and business activity that encompass the innovation process, and the interactions between those factors. This is the first time that such a wide range of data sources have been combined and made available

Analysis and Data An update on the robust evidence base underpinning the Hubâ&#x20AC;&#x2122;s work. 34

Dr Etienne Bailey, Hub Analyst, National Centre for Universities and Business (NCUB)

An Update on the Hub’s Analytical Offer The Smart Specialisation Hub was launched as an advisory hub to support local areas and national government in understanding capabilities and to inform investment decisions. It has been our intention from inception to adopt an evidence-based approach to identifying local innovation strengths and comparative advantages at the Local Enterprise Partnership (LEP) level. A core function of our role has been to create an online observatory of individual and comparative profiling of innovation activity.

The observatory is housed on our website and enables users to understand what evidence is available and how it can be used. Since last year’s annual report, we have made a great deal of progress completing profiles for all thirty-eight Local Enterprise Partnerships and launching a key comparative document titled Mapping England’s Innovation Activity.

the resulting data has been visualised using a range of graphics and tables. On our website users can use interactive charts to evaluate strengths in innovation across specific actors in research, business, and universitybusiness collaboration, and also innovation inputs/outputs in the form of investment in innovation, research outputs, and patent data.

Comparative profiling of innovation activity at the LEP level

The task of compiling individual LEP profiles has allowed for an in-depth insight into innovation activity. However, we want to visualise the data to allow for intuitive and coherent comparison across LEPs. To achieve this, we developed a novel and robust methodology that combined a number of the Hub’s framework indicators with expert-driven data and a visual format that facilitates comparison - Mapping England’s Innovation Activity (2017).

Since our first annual report we have worked to complete the benchmarking of our framework indicators. These form the base data allowing for reliable cross-LEP comparison of innovation performance. The framework has been used to construct the individual profiles and

Figure 1 - A visual sample of the analytical output from MEIA EMERGING & ENABLING HEALTH & TECHNOLOGIES LIFE SCIENCES

LEPs BY INNOVATE UK REGION

NORTH EAST

MANUFACTURING & MATERIALS

E AG ER AV GY TY LO LI NO BI CH NG PA TE RI CA ANO CTU S E N A P F RI LE NU ST MA DU LS A N UE I RI AL ON TE G -V TI MA VIN GH DA D I HI UN CE N L RT FO VAN BA PO S AD UR AN Y TR LIT BI NA GY AI ER ST EN T SU EN NM RO E VI AC EN SP RO E T IL AE CAR BU TH AL LY HE UPP S S OD CE FO IEN H C OS EC BI I-T E R AG AC SP NG LI AB EN ICT & S NG EM GI ST ER SY ES EM C L R CA VI HE RI SER OT T EC L EL ITA G DI

Bubble size Evidenced capability

INFRASTRUCTURE

HUMBER LEEDS CITY REGION NORTH EASTERN SHEFFIELD CITY REGION TEES VALLEY YORK & N YORKSHIRE

Mapping England’s Innovation Activity report However, although this mapping is robust, it is not a fully comprehensive view of innovation capability. It is intended to encourage engagement and discussion around innovation data and how it can be improved.

The Mapping England’s Innovation Activity (MEIA) report principally identifies hot and cold spots of innovation activity by sector and across LEP and regional geographies. Innovation capability was evaluated by combining quantitative and qualitative data sources. The quantitative data is from the Hub’s analytical framework, and comprises six benchmarked indicators that allowed for consistent comparison across LEPs. The expert-driven data was curated from a team of innovation experts and provides insight into innovation intensity seen on the ground capturing those soft capabilities such as networking that are difficult to quantify.

Figure 2 - Map showing the high value manufacturing cluster

We adopted a bubble diagram as our main visual format (figure 1), where the larger the bubble the greater the amount of innovation activity in the sector of any given LEP. Having benchmarked and normalised the data, each bubble can be compared with another across both LEPs and sector groups. The MEIA report allows users to look beyond defined geographical boundaries and identify collections of LEPs with activity in similar sectors, such as high valued manufacturing in central England that includes Coventry & Warwickshire, Oxfordshire, Sheffield City Region, Leicester and Leicestershire, and Greater Birmingham and Solihull (figure 2).

Subsequently, the underlying analytical methodology employed for this report is designed to be flexible and allow for the introduction of additional indicators in order to build an even more comprehensive picture of innovation capability. We recently completed a refresh of the MEIA analysis, curating the most up-to-date data for four of the six Hub indicators used in the preliminary analysis. These include indicators relating to publication output, employment in technology and patents. This more up-to-date MEIA report is featured in this year’s annual report and demonstrates the Hub’s drive to employ the most recent and robust data in its analytical work.

Beyond England This autumn, we were excited to start work on extending our profiling of innovation activities to the devolved administrations as part of understanding UK comparative capabilities. We are employing the same methodology to that adopted for the MEIA report, thus creating a complete national view. Currently in draft format, our output for the devolved administrations is due for release at the beginning of next year. Table 1 - Sub-geographies for the devolved administrations

Sub-Geographies for the Devolved Administrations

Wales

Scotland

Northern Ireland

Welsh Administrative Regions:

Scottish Parliament Regions:

Northern Ireland HSC Trust areas:

•

North-West

•

Central Scotland

•

Belfast

•

North-East

•

Glasgow

•

Northern

•

Mid-Wales

•

Highlands and Islands

•

South-Eastern

•

South-West

•

Lothian

•

Southern

•

South-East

•

Mid Scotland and Fife

•

Western

•

Northeast Scotland

•

South Scotland

•

West Scotland

Future activities As part of the Hub’s attempts to respond to gaps and improve place-based innovation analysis, feedback was sought from stakeholders on the MEIA report and on future directions of travel for the Hub’s data analytic activities. Feedback from the survey reported that users felt that it enhanced their understanding of England’s innovation activity (figure 3). We asked how our data could be developed and most support was given to: increasing granularity of the sectors; providing more place-based context; capturing emerging and forward-looking innovation capability; establishing trends over time; and extending comparative analysis of innovation activity nationally – somethaing we have already started on.

Figure 3 - Bar chart showing results from the MEIA feedback survey How could we streghten our data?

% Responses

20% 15% 10% 5% 0% Include greater granularity of sectors

More place-based context

Capture emerging and forward-looking innovation /technology

Show trends /change over time

Comparison across the whole of the UK including the DAs

International comparisons

Non-sector speciﬁc data e.g. Ecosystem capability or capacity

Other

The feedback we have received sits alongside our data strategy developed in the first half of 2017. The strategy aims to deliver meaningful and useful outputs to our target audiences. We have identified a series of future pillars for data activity that have been refined based on feedback from our survey. Five key pillars of future activity have been defined and are summarised in the table below (table 1). These provide a clear direction of travel, allowing the Hub to fulfil its remit of supporting evidence-based decision-making in innovation, and produce a series of impactful and timely data outputs.

Table 2 - Identifying the Hubâ&#x20AC;&#x2122;s existing and future core pillars of activity Future Data Pillars

Description of Activity

Comparative profiling of emerging/ forward-looking capabilities

Drawing on a series of indicators, including Gateway to Research and Innovate UK data, to provide an indication of emerging innovation activity across research and business

Comprehensive comparative profiling of existing UK sectoral capabilities, with greater sector granularity

Comparative profiling of UK sectoral capabilities will be made even more robust and granular through the inclusion of other data sources relating to research and business innovation capability

Expand profiling of regional innovation activity nationally

Identifying and filling data gaps in profiling place-based innovation activity across research and business, in support of localised KE projects and the Science and Innovation Audit (SIA) process

Identifying and filling data gaps, e.g. local LEP data allowing for deep-dive analysis

Areas not included in the other sectors, such as big data, robotics and autonomous systems.

Regional comparison of innovation capability Internationally

Conducting analysis that allow for regional comparison of innovation activity Internationally

We will deliver this strategy with a phased release of impactful data outputs in line with the future data pillars outlined above. Our ambition in the coming months is to complete comparative profiling of innovation activity for the devolved administrations, and to release this as an exciting and novel publication. Our longer-term milestones include the profiling of emerging/forward-looking innovation activity across LEPs, responding to a clear gap in the innovation-based research. We will also seek to provide further local support in the form of deep-dive analysis, and enhance the sectoral granularity of the data we employ in our innovation profiling. We look forward to continuing to develop the Hubâ&#x20AC;&#x2122;s impactful data analytical work, rigorously testing it with partners, and offering it as a valuable and leading component of the local innovation toolkit. References: Mapping Englandâ&#x20AC;&#x2122;s Innovation Activity (June, 2017). The Smart Specialisation Hub. Available online: http://smartspecialisationhub.org/portfolio/ mapping-england-innovation-activity/

Mapping Englandâ&#x20AC;&#x2122;s Innovation Activity 2: Refreshed The Hub is pleased to present a refreshed version of Mapping Englandâ&#x20AC;&#x2122;s Innovation Activity. Originally published in June of this year, this mapping represented an important step forward for the Hub and is a useful tool for our stakeholders. We have been able to increase and magnify our engagement subsequent to publication and consider this an asset. 40

Introduction Mapping England’s Innovation Activity offers a simple overview of evidenced innovation activity by sector for each LEP. This tool can be scrutinised in several ways and has been designed to help the reader:

The Smart Specialisation Hub was established, following the recommendations in Encouraging a British Invention Revolution: Sir Andrew Witty’s Review of Universities and Growth, to support local and national government in the implementation of Smart Specialisation Strategies.

1. Identify hot and cold spots of innovation activity nationally.

Since the Hub’s inception there has been increasing focus on the importance and uniqueness of place. We have seen the launch of Science and Innovation Audits (SIAs) – that have catalysed and galvanised consortia around local and sector strengths – and the Industrial Strategy Green Paper that champions place as one of its ten pillars.

2. Search sectors to identify areas of peak activity. 3. Investigate for any particular LEP the sectors they are most active in. 4. Get a sense of regional activity.

The Hub has responded to this renewed focus on place by starting an analysis of innovation in England presented in this document: Mapping England’s Innovation Activity.

5. Identify potential partners and potential areas to prioritise investment.

This mapping is a response to the need for a comparative representation of innovation strengths in local areas – in this case at Local Enterprise Partnership (LEP) level. It is designed to address an identified gap in existing analyses, that are either top level – offering no regional breakdown – or regionally specific and, therefore, not comparable.

Through the publication of this tool, the Hub wants to encourage informed discussion around the availability and quality of data at local and national level. This mapping is offered only as a starting point, as any attempt to effectively account for innovation assets and capabilities across the country requires the input, insight and the buyin of local partners.

Innovation Activity Mapping

We invite and encourage feedback on this tool and particularly about evidence that you feel could strengthen and enrich our framework; sharing expertise and experience from local to national level is essential to ensuring the robustness of this tool. We look forward to hearing from you.

Understanding place-based innovation and identifying the potential strengths of local areas is key to increasing growth and productivity. In this mapping, the Hub has provided a fusion of quantitative and expert-driven data that makes it possible to compare place-based innovation activity in a way that has not been done before.

Contact

We know that the data sets we have used are limited and we accept that this is not a fully comprehensive view – and we do not present it as such. Our intention with this analysis is threefold:

info@smartspecialisationhub.org

1. To provide a comparable and evidenced overview of national innovation activity. 2. To allow LEPs to assess their comparative strengths based on activity. 3. To encourage engagement and discussion around innovation data and how it can be improved.

MAPPING ENGLANDâ&#x20AC;&#x2122;S INNOVATION ACTIVITY EMERGING & ENABLING TECHNOLOGIES

NORTH EAST

INFRASTRUCTURE

MANUFACTURING & MATERIALS

E AG ER Y AV OG TY LI NOL BI H G PA EC IN CA NOT TUR P NA FAC IES LE R NU ST MA DU LS A N UE I RI AL ON TE G -V TI MA VIN GH DA D I HI UN CE N L RT FO VAN BA PO S AD UR AN Y TR LIT BI NA GY AI ER ST EN T SU EN NM RO E VI AC EN OSP E R T IL AE CAR BU TH AL LY HE UPP S S OD CE FO IEN H C OS EC BI I-T E R AG AC SP NG LI AB EN ICT & S NG EM GI ST ER SY ES EM R AL IC HE IC RV OT TR SE EC L EL ITA G DI

LEPs BY INNOVATE UK REGION

HEALTH & LIFE SCIENCES

Bubble size Evidenced capability

HUMBER LEEDS CITY REGION NORTH EASTERN SHEFFIELD CITY REGION TEES VALLEY YORK & N YORKSHIRE

NORTH WEST

CHESHIRE & WARRINGTON CUMBRIA GREATER MANCHESTER LANCASHIRE LIVERPOOL CITY REGION

EAST CAMBRIDGESHIRE & PETERBOROUGH (GCGP) HERTFORDSHIRE NEW ANGLIA SOUTH EAST DERBYSHIRE & NOTTINGHAMSHIRE EAST MIDLANDS GREATER LINCOLNSHIRE LEICESTER & LEICESTERSHIRE SEMLEP

WEST MIDLANDS

BLACK COUNTRY COVENTRY & WARWICKSHIRE GLOUCESTERSHIRE GREATER BIRMINGHAM & SOLIHULL

STOKE-ON-TRENT & STAFFORDSHIRE THE MARCHES WORCESTERSHIRE

SOUTH EAST

BUCKINGHAMSHIRE THAMES VALLEY COAST TO CAPITAL ENTERPRISE M3 OXFORDSHIRE SOLENT THAMES VALLEY BERKSHIRE

SOUTH WEST

CORNWALL & ISLES OF SCILLY DORSET HEART OF THE SOUTH WEST SWINDON & WILTSHIRE WEST OF ENGLAND

Notes 1. Since London proved to be an outlier, it was excluded from the data set represented here in order to achieve a balanced overview. 2. The LEPs Cambridgeshire & Peterborough (GCGP) and Derbyshire and Nottinghamshire refer to Greater Cambridgeshire & Greater Peterborough and Derby, Derbyshire, Nottingham & Nottinghamshire, respectively.

INDUSTRY BREAKDOWN

Bubble size Evidenced capability

MAPPING ENGLANDâ&#x20AC;&#x2122;S INNOVATION ACTIVITY

EMERGING AND ENABLING TECHNOLOGIES

NG GI ER EM

P LE

R HE OT

T LI BI PA

Y GE RA

E AV

E AC SP

NG LI AB EN

T IC

S EM ST SY

ES IC RV SE

NORTH EAST

AL IC TR EC EL

L TA GI DI

LEPS BY INNOVATE UK REGION HUMBER LEEDS CITY REGION NORTH EASTERN SHEFFIELD CITY REGION TEES VALLEY YORK & N YORKSHIRE

NORTH WEST

CHESHIRE & WARRINGTON CUMBRIA GREATER MANCHESTER LANCASHIRE LIVERPOOL CITY REGION

EAST CAMBRIDGESHIRE & PETERBOROUGH (GCGP) HERTFORDSHIRE NEW ANGLIA SOUTH EAST DERBYSHIRE & NOTTINGHAMSHIRE EAST MIDLANDS GREATER LINCOLNSHIRE LEICESTER & LEICESTERSHIRE SEMLEP

WEST MIDLANDS

BLACK COUNTRY COVENTRY & WARWICKSHIRE GLOUCESTERSHIRE GREATER BIRMINGHAM & SOLIHULL

STOKE-ON-TRENT & STAFFORDSHIRE THE MARCHES WORCESTERSHIRE

SOUTH EAST

BUCKINGHAMSHIRE THAMES VALLEY COAST TO CAPITAL ENTERPRISE M3 OXFORDSHIRE SOLENT THAMES VALLEY BERKSHIRE

SOUTH WEST

CORNWALL & ISLES OF SCILLY DORSET HEART OF THE SOUTH WEST SWINDON & WILTSHIRE WEST OF ENGLAND

Bubble size Evidenced capability

MAPPING ENGLANDâ&#x20AC;&#x2122;S INNOVATION ACTIVITY

HEALTH & LIFE SCIENCES

P LE CA T LI BI PA Y GE RA

E AV

LY PP SU

RE CA TH AL HE

OD FO

NORTH EAST

S CE EN CI OS BI

H EC -T RI AG

LEPS BY INNOVATE UK REGION HUMBER LEEDS CITY REGION NORTH EASTERN SHEFFIELD CITY REGION TEES VALLEY YORK & N YORKSHIRE

NORTH WEST

CHESHIRE & WARRINGTON CUMBRIA GREATER MANCHESTER LANCASHIRE LIVERPOOL CITY REGION

EAST CAMBRIDGESHIRE & PETERBOROUGH (GCGP) HERTFORDSHIRE NEW ANGLIA SOUTH EAST DERBYSHIRE & NOTTINGHAMSHIRE EAST MIDLANDS GREATER LINCOLNSHIRE LEICESTER & LEICESTERSHIRE SEMLEP

WEST MIDLANDS

BLACK COUNTRY COVENTRY & WARWICKSHIRE GLOUCESTERSHIRE GREATER BIRMINGHAM & SOLIHULL

STOKE-ON-TRENT & STAFFORDSHIRE THE MARCHES WORCESTERSHIRE

SOUTH EAST

BUCKINGHAMSHIRE THAMES VALLEY COAST TO CAPITAL ENTERPRISE M3 OXFORDSHIRE SOLENT THAMES VALLEY BERKSHIRE

SOUTH WEST

CORNWALL & ISLES OF SCILLY DORSET HEART OF THE SOUTH WEST SWINDON & WILTSHIRE WEST OF ENGLAND

Bubble size Evidenced capability

MAPPING ENGLANDâ&#x20AC;&#x2122;S INNOVATION ACTIVITY

INFRASTRUCTURE

P LE T LI BI PA Y GE RA

NG VI LI

E AV

N BA UR

T OR SP AN TR

TY LI BI NA AI ST SU

GY ER EN

T EN NM RO VI EN

NORTH EAST

T IL BU E AC SP RO AE

LEPS BY INNOVATE UK REGION HUMBER LEEDS CITY REGION NORTH EASTERN SHEFFIELD CITY REGION TEES VALLEY YORK & N YORKSHIRE

NORTH WEST

CHESHIRE & WARRINGTON CUMBRIA GREATER MANCHESTER LANCASHIRE LIVERPOOL CITY REGION

EAST CAMBRIDGESHIRE & PETERBOROUGH (GCGP) HERTFORDSHIRE NEW ANGLIA SOUTH EAST DERBYSHIRE & NOTTINGHAMSHIRE EAST MIDLANDS GREATER LINCOLNSHIRE LEICESTER & LEICESTERSHIRE SEMLEP

WEST MIDLANDS

BLACK COUNTRY COVENTRY & WARWICKSHIRE GLOUCESTERSHIRE GREATER BIRMINGHAM & SOLIHULL

STOKE-ON-TRENT & STAFFORDSHIRE THE MARCHES WORCESTERSHIRE

SOUTH EAST

BUCKINGHAMSHIRE THAMES VALLEY COAST TO CAPITAL ENTERPRISE M3 OXFORDSHIRE SOLENT THAMES VALLEY BERKSHIRE

SOUTH WEST

CORNWALL & ISLES OF SCILLY DORSET HEART OF THE SOUTH WEST SWINDON & WILTSHIRE WEST OF ENGLAND

Bubble size Evidenced capability

MAPPING ENGLANDâ&#x20AC;&#x2122;S INNOVATION ACTIVITY

MANUFACTURING & MATERIALS

P LE

UE AL -V GH HI

CA T LI BI PA Y GE RA

E AV

GY LO NO CH TE NO NA

G IN UR CT FA NU MA

ES RI ST DU IN

S AL RI TE MA

NORTH EAST

ON TI DA UN FO

ED NC VA AD

LEPS BY INNOVATE UK REGION HUMBER LEEDS CITY REGION NORTH EASTERN SHEFFIELD CITY REGION TEES VALLEY YORK & N YORKSHIRE

NORTH WEST

CHESHIRE & WARRINGTON CUMBRIA GREATER MANCHESTER LANCASHIRE LIVERPOOL CITY REGION

EAST CAMBRIDGESHIRE & PETERBOROUGH (GCGP) HERTFORDSHIRE NEW ANGLIA SOUTH EAST DERBYSHIRE & NOTTINGHAMSHIRE EAST MIDLANDS GREATER LINCOLNSHIRE LEICESTER & LEICESTERSHIRE SEMLEP

WEST MIDLANDS

BLACK COUNTRY COVENTRY & WARWICKSHIRE GLOUCESTERSHIRE GREATER BIRMINGHAM & SOLIHULL

STOKE-ON-TRENT & STAFFORDSHIRE THE MARCHES WORCESTERSHIRE

SOUTH EAST

BUCKINGHAMSHIRE THAMES VALLEY COAST TO CAPITAL ENTERPRISE M3 OXFORDSHIRE SOLENT THAMES VALLEY BERKSHIRE

SOUTH WEST

CORNWALL & ISLES OF SCILLY DORSET HEART OF THE SOUTH WEST SWINDON & WILTSHIRE WEST OF ENGLAND

SOURCES & NOTES In order to gain a richer understanding of local innovation capabilities, we have employed both quantitative and expertdriven data for this visualisation piece.

Sources Capability scores were calculated by combining the following two sources:

1. The Smart Specialisation Hub’s analytical framework

2. The knowledge transfer network’s (KTN) team of in-house experts

The Hub’s analytical framework, created by Hub analysts at the National Centre for Universities and Business, is geared to providing guidance on emerging strengths in innovation, curating indicators with the greatest sectoral granularity available from robust public sources. We identified a total of six indicators which show performance of innovation in core industry sectors. Those indicators fall into two groups - Innovation in research/higher education institutions, and Innovation in business/industry.

Building on the quantitative data, the expert-driven data set looks into the overall innovation intensity seen on the ground regionally. The data was sourced by consulting the KTN’s team of innovation experts. The KTN’s indepth knowledge in all sectors of industry presented a unique opportunity to effectively assemble an expert-led overview of England’s innovation capabilities. The data was collected over a period of two months (from October to December 2016) by asking KTN industry experts to answer the question: “In your experience, how much innovation activity is present in your sector of expertise for each of England’s LEPs?” The KTN industry experts were asked to fill this information against each LEP using a simple scale.

Innovation in Research/Higher Education Indicator

Source

Staff submitted to REF across stem disciplines

Higher Education Statistics Agency, STEM disciplines, 2013/14

Publication output to priorities of Innovate UK

Scopus, 2015-17

Publication output to the 8 Great Technologies

Scopus, 2015-17

This data picks up on the soft relationships, networks and other activities that are either difficult to quantify or are currently not recorded, but add real value to innovation performance. However, this data has been weighted such that it supports identified peaks but is insufficient on its own to alter the metric-driven view.

Innovation in Business/Industry Innovate UK investment in innovation

Innovate UK, 2013-17

Number of employed FTE in technology sectors

Business Register and Employment Survey, 2016

Number of inventors on patents across various technology areas in LEP areas

Intellectual Property Office 2015-17

Notes Caveats and constraints regarding gathering and interpreting the data 1. The Hubâ&#x20AC;&#x2122;s analytical framework is restricted to readily available public sources. As such, not all sectors are represented by the full set of predefined indicators. This has been corrected by weighting the final cumulative figure. 2. Expert-driven data is based on individualsâ&#x20AC;&#x2122; soft knowledge on sectoral strengths in each LEP and therefore has limitations. 3. Underpinning datasets have been merged to show sectoral strengths in innovation across both research and business actors. This allows for a relatively wellrounded representation of innovation strengths at the expense of granularity. 4. Sector titles in the underpinning data are not consistent. Titles have been changed in order to align the activities into identifiable groups of like industry activity. 5. We have used the latest available data but statistical data is backward-looking and there will always be some lag. 6. Since London proved to be an outlier, it was excluded from the data set represented here in order to achieve a balanced overview.

Glossary of Industries Emerging and Enabling Technologies

Sector

Underlying Data

Digital Services

General purpose transformative digital technologies, including the digital economy and digital technology.

Electrical Systems

Electronics, photonics and electrical systems, including sensors, semiconductors and electronic sensors.

ICT

Information communication technology, including telecoms, computer technology, information technology management and basic communication processes.

Other Emerging & Enabling Technologies

Areas not included in the other sectors, such as big data, robotics and autonomous systems.

Space

Technologies including satellites and PNT (position navigation and timing).

Health and Life Sciences

Sector

Underlying Data

Agri-tech

Agricultural technology, including agri-food livestock, agri-food plants and crops and agri-science.

Biosciences

Includes biotechnology, organic fine chemistry and synthetic biology.

Food Supply

Includes agriculture, food and food chemistry.

Healthcare

Includes life sciences, medical technology, pharmaceuticals and regenerative medicine.

Glossary of Industries Infrastructure

Sector

Underlying Data

Aerospace

Aviation, including its manufacturing and infrastructure.

Built Environment

Includes architecture, building services, engineering and building control.

Energy

Includes energy storage, resource efficiency, thermal energy and electrical machinery and apparatus.

Sustainability

Includes environmental technology.

Transport

Includes maritime/marine, rail and automotive transport systems.

Urban Living

Includes city systems, future cities and smart cities.

Manufacturing and Materials

Sector

Underlying Data

Advanced Materials

Includes chemistry, materials chemistry, basic materials chemistry, surface technology coating and macromolecular chemistry polymers.

Foundation Industries

Includes data on traditional materials and manufacturing, composites, materials metallurgy, textile & paper machines.

High-Value Manufacturing

Manufacturing that is financially successful, of strategic importance or makes a positive social impact.

Nanotechnology

Includes micro-structural and nanotechnology.

Outreach, Insight and Looking to the Future The Hub seeks to explore its potential to the benefit of its stakeholders; both through bespoke support for projects, and improving innovation intelligence. Here, we reflect on one such piece of work and explore how mapping the countryâ&#x20AC;&#x2122;s assets and strengths can be revitalised and reshaped for the future. 54

Evaluating a Strategic Contribution to the Bioeconomy In January 2017, the Smart Specialisation Hub was invited to perform an annual evaluation of the York BioVale project on behalf of the Higher Education Funding Council for England (Hefce). The BioVale, a Hefce Catalyst-funded project, is required to report on its performance each year; on this occasion, the Hub was pleased to turn its quantitative and qualitative analytical capacity and context to delivering this evaluation.

To assess performance against these aims, the Hub team undertook a two-day fact-finding visit to the BioVale project facility, and conducted a series of interviews and reviews of activity with colleagues and users of the resource. The Hub team was also provided with progress data against Hefce targets, internships, SME KT projects, larger SME projects, membership drivers and participation in international collaborations.

The BioVale projects’s key aims are: •

Increasing the capacity of the HE sector to grow the knowledge-based bioeconomy in order to deliver sustainable economic growth and high-value jobs;

•

Across the following months, the Hub team synthesised these data and inputs into a full evaluation of the BioVale project’s performance, which was delivered in late Spring. This evaluation also served as the BioVale’s second annual report on progress, and the Hub team were also pleased to develop some of the interview subjects into individual case studies on good practice in knowledge exchange once the formal evaluation process was complete.

Improving the level and value of universitybusiness collaboration/technology transfer to support the success of the UK Bioeconomy;

•

Establishment a successful internationally-recognised bio-economy innovation cluster to enable translation of

The BioVale project took a prominent role in the Bioeconomy in the North of England Science and Innovation Audit, and is a substantial asset to the circular bioeconomy.

HE research into practice.

Case Study: Pharmaceuticals from Food Waste One of the key ingredients used at GSK’s Irvine site for anitbiotic production is foodgrade glucose which has highly volatile pricing - three years ago, GSK embarked on a search for a more sustainable supply. This is a highly strategic project for GSK that is building a more sustainable and economically beneficial supply chain using a biorefinery approach.

Together with the BDC and Napier University, they identified potential new sources of glucose from food manufacturing, using starchy by-products such as bread heels and potato waste as a starting material. Following successful trials at the BDC, they are now exploring significant opportunities to scale this process up to commercial-level. To make the most out of the starting material, including the protein-rich residue, the BDC has also brought additional partners into the project.

“We are really impressed with the ideas and support available at the BDC and believe they are uniquely equipped to help companies looking to enter the emerging biorefining sector.” GSK

value is already £1.7Tn in Europe alone, but multidisciplinary collaborations will be crucial to realise its full potential.

The Hub feels our work on this evaluation – coupled with the use of ‘Mapping England’s Innovation Activities’ in support of that Audit – is evidence of the wrap-around offer we are increasingly able to provide as a project, and the manifold ways we can support place-based innovation at varying scales and through different points of access. BioVale colleagues here set out the sort of work they undertake, and the value they add in their sector.

With funding from Hefce and ERDF, the BioVale Project is supporting knowledge transfer programmes at the Biorenewables Development Centre (BDC) and the BioVale cluster to help harness these opportunities.

With the growing need to break our reliance on fossil resources, multi-billion pound markets are emerging for renewable, bio-based alternatives. The BioVale Project is helping UK businesses, particularly those in Yorkshire and the Humber, to connect with experts and capitalise on these new opportunities. This is stimulating sustainable economic growth, encouraging inward investment and creating high-value jobs. Recent technological improvements have allowed innovators to use bio-based materials (including crops, unavoidable food wastes, and algae) to make not only food and feed, but also fuels, chemicals and materials. The drive to find alternatives to petrochemicals while reducing our wastes is rapidly growing this new bioeconomy. Its estimated

•

The BioVale cluster is developing the Yorkshire and Humber region’s international reputation for excellence in bioeconomy innovation, by streamlining access to bioopportunities, lobbying, and providing specialised networking and training events.

•

The BDC is delivering a knowledge transfer programme of R&D projects linking researchers and businesses to help develop and commercialise novel biobased processes and products.

By combining these two activities, we are not only helping innovators access new networks and expertise, but also providing practical support and data to help bring their ideas to market”

government-commissioned Science and Innovation Audit ‘The Bioeconomy in the North of England’ that was led by the University of York and published in September 2017” explains Maggie Smallwood, CEO at BioVale. The BioVale Project partners are now working with key organisations and government bodies to provide expert insights for the forthcoming UK Bioeconomy Strategy, and the new Industrial Strategy. “The bioeconomy has the potential to feed our growing population; to turn waste into resources; and to break our dependency on petrochemicals,” concludes Maggie.

Joe Ross, Director, BDC Some of the BDC and the BioVale cluster’s biowaste projects are highlighted below. Their work also encompasses many other aspects of the bioeconomy, such as: agricultural technology, and biorefining chemicals and fuels from plants or microbes. For the project, the partners have so far delivered over 140 knowledge transfer projects and built a successful innovation cluster with over 250 members, which attracts over 400 participants each year to its workshops and networking events. “We are excited to be witnessing a growing interest from policymakers, for example, this project has catalysed the

Case Study: BioVale Special Interest Groups As part of its cluster-building efforts, the BioVale team established two Special Interest Groups (SIGs) that provide topic-specific forums for members to network, exchange views and share best practice with their peers. the University of York’s School of Management on a project to map biowaste streams in the Yorkshire and Humber region and identify potential high-value uses for them.

These voluntary groups of members share an interest in a particular aspect of the bioeconomy and have a strong regional focus. The first SIG focuses on anaerobic digestion. Active since April 2016, it now has over 180 members, including researchers, operators, technology providers and waste managers. Its members have benefitted from a highly topical programme of site visits and workshops. The second SIG focuses on value from unavoidable food waste. Its first meeting at the University of York in September 2017 attracted over 80 participants. This SIG has recently won BBSRC funding to work with

“Being part of Biovale’s AD SIG has been really helpful to Amur, as a new business in the industry. The group has provided us with some good networking opportunities - allowing us to share ideas, make new contacts and showcase our own AD plant in South Milford.” Christine Parry, Amur

Organisations like the Biorenewables Development Centre and their partners who are doing pioneering work to turn waste into reusable products such as biofuels and chemicals will help make UK businesses more sustainable and more competitive.” Sir Mark Walport, Chief Scientific Adviser

Case Study: High-value Chemicals from Household Waste The biological portion of municipal solid waste (BioSW) is one of the most abundant raw materials in the UK with over 50 MT produced each year. Developing effective ways to turn BioSW into useful products is a challenge that Wilson Bio-Chemical is tackling with the help of the BDC and their colleagues at the University of York. Initially, the company was attracted to the region to work with the BDC and access funding through their ERDF programme. Wilson have since secured further grant funding to continue developing their technology through various knowledge exchange projects.

This technology strives to be a game-changing approach to mixed waste that will not only divert waste from landfill, but also displace fossil fuels and their associated carbon emissions.

“These collaborations are crucial to taking our process to the next level. With this support, we will be able to better explore what high-value applications this material has and improve our process to make the most out of this waste stream.” Wilson Bio-Chemical

Together, they have commissioned a new pilot-scale autoclave in the BDC’s warehouse facility, and will be adding a demonstration plant over the coming year. These facilities will support two activities: to establish the potential of the fibre as a coal substitute, as well as to produce biobutanol, ethanol, acetone and hydrogen.

A Look to the Future of Place and Innovation Dr Joe Marshall, the National Centre for Universities and Business’ Chief Operating Officer and Director of Strategy – and one of the originators of the Smart Specialisation Hub’s design - talks about rooting our understanding of places in a more profound, forwardlooking approach to mapping capabilities.

Context

Mapping – as a concept – is rather close to my heart. Academically, I have something of a geographer’s background, and by extension a cartographer’s eye. Without being overly reductive, a map is essentially a presentation of data; and the Smart Specialisation Hub has spent the last 18 months and more compiling and applying its data to the pursuit of better understanding of local strengths and assets. So, now we have this stock of data – what can we do with it next to open up real opportunities, thoroughly map and truly understand capabilities across the country?

Underpinning the Government’s proposed Industrial Strategy is a commitment and desire to set a new course for the UK. A course away from the EU but one which retains, and seeks to extend, the UK’s position in the world. The UK will seek to continue to be prominent on any international map of science, research and innovation and continue to punch above its weight relative to others. But it is apparent that the benefits and pull through from science, research and innovation are not being felt in all parts of the UK. Despite the geography of the UK being relatively compact – there are marked disparities depending on where you are on the map. Some places are prospering whilst other places are struggling. And this Government, and others before it, has recognised the need to rebalance the national economy.

And beyond this – it is worth exploring maps on a conceptual level and reflecting on what more they can offer us. There are opportunities beyond simply adopting a linear model – assembling data, assigning it a location on a map and leaving it at that. Mapping need not be simply two-dimensional; not only should we be able to map out what we have – we should aspire to map into the future, to find and support vital emerging opportunities. If this all seems a little high-level, I shall endeavour to root it in the here and now.

The Industrial Strategy acknowledges the need to drive growth across the whole country. But it lays out the challenge of setting our new course. Implicit in this

strengths in new and different ways. We need to show places relative to others. We need to bring to life the geographical and human richness and opportunities to be found in different locations.

through the devolution agenda is a challenge to localities: how can places redevelop, regenerate and refocus their efforts intelligently?

Mapping local strengths

Mapping out strengths provides an important way in to which to breathe life into the data. It provides a more visual and immediate representation of what is known. But the data provides the reference points that defines that map. Maps are not a drawing or an artist’s impression. Maps are derived from data points and through them we can portray different areas in different lights – bringing the unique geographies of different places into sharp relief and capturing them to the benefit of local leaders and policymakers.

As this Report’s section on data sets out, the Hub - alongside the Science and Innovation Audits - are providing a groundswell of data and metrics on local innovation strengths and capabilities. Responding to the challenge set out by Sir Andrew Witty in his 2013 Review, local areas have the data to make informed decisions to identify and develop their areas of local comparative advantage. The Hub has put at the fingertips of local and national partners datasets that can inform, influence and ultimately drive local decision making.

The Hub is perfectly placed to produce maps that help inform local partners; help them understand their strengths relative to others; and understand their position on the map. It can help national decision makers take a holistic view of the innovation ecosystem and understand where different areas of activity are taking place relative to others. And it can ensure comparisons are fair ones rooted in depth and nuance – urban centres with urban centres, the semi-rural with the semi-rural and so on.

We want to help places find and define themselves on the map. And to drive, enrich and explore the potential of mapping itself.

Mapping out the future

But often, these datasets are seen and used in isolation of specific places or specific sectors. It is too easy to selfselect and lean on the datasets that exhibit the strength of a place (standalone rankings such as 1st or 2nd highest at x or y specialism, shorn of context) and airbrush over what strengths lie in other places, or what metrics others use to describe their strengths. Hypotheses can too often lead the data, rather than the other way around. So it is important that the datasets we deploy, and future datasets we and others produce, are assessed against each other in an informed and sensitive way. In order to properly understand a place’s comparative advantage it needs to be juxtaposed properly against another place or places, not taken in isolation.

But maps do not have to be visualisations of what is happening - or more likely has already happened, and due to data lag is only being reported on and captured now. Maps provide a vehicle to set a future course. To date much of the work of the Hub has been about capturing current strengths, but it will be equally important to look forward (as, after all, the tenets of innovation policy encourage us to do). To map out opportunities for new, emergent strengths to be developed and fed. In both a national and local context, mapping as a construct allows to set out a new vision and blueprint that places can work towards. They do not need to be restricted by what has happened, but only by where they want to be on the map. In the future, we want to work with local and national partners to bring all the data currently being collected to life. To make it both useable, and useful for end users. We want to help places find and define themselves on the map. And to drive, enrich and explore the potential of mapping itself.

As we have shown with our ‘Mapping England’s Innovation Activity’ report – a refreshed version of which can be found in these pages - the Hub is using the datasets we have gathered and is putting these to work to show the strengths of different places in different sectors. And as we evolve this methodology, we need to animate these

www.smartspecialisationhub.org 020 7667 8184 10 Tiger House, Burton St, London, WC1H 9BY