Rail Innovation Eco-System by University of Huddersfield

UNIVERSITIES OF LEEDS AND HUDDERSFIELD

Rail Innovation Eco-system Understanding the Regionâ&#x20AC;&#x2122;s Research & Innovation Capacity, Capabilities and Potential

RAIL INNOVATION ECO-SYSTEM

UNDERSTANDING THE REGIONâ&#x20AC;&#x2122;S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

Authors THIS REPORT WAS PREPARED BY:

Perspective Economics River House 48- 60 High Street Belfast, BT1 2BE T: 07 7 3 8 018545 E: jh@perspectiveeconomics.com

PREVIOUS VERSION:

26th September 2020 DISTRIBUTION OF THIS VERSION:

30th September 2020

NAME

ORGANISATION

RESPONSIBILITY

Dr Ceri Williams

University of Leeds

Director of Research & Innovation

Prof Liz Towns-Andrews

University of Huddersfield

Director of Research & Enterprise

Marc Eatough

University of Leeds

Major Research Initiatives Manager

James Devitt

University of Huddersfield

University Industry Programme Manager

Jonathan Hobson

Perspective Economics

Project Director

Sam Donaldson

Perspective Economics

Analytics Lead

Conor Tinnelly

Perspective Economics

Analyst

The study team would like to extend sincere thanks to the Steering Group representatives for their insight and extensive input to the study. In addition to the representatives named above the Steering Group included Professors Allen, Iwnicki and Woodward (Universities of Huddersfield and Leeds respectively), Sarah Bowes and James Hopton (West Yorkshire Combined Authority), Lisa Hill and Nick Fletcher (University of Leeds). We would also like to thank Allto Market Research for undertaking the in-depth telephone interview component of the research.

RAIL INNOVATION ECO-SYSTEM

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

Foreword In March 2020, the universities of Leeds and Huddersfield jointly commissioned research to provide insight into the region’s research and innovation capability and the opportunity for innovation in the railway sector for both the Yorkshire & Humber and the wider Northern Powerhouse regions. We are very excited by the opportunities presented in this report and the significant potential for rail innovation that can be driven by our two universities working collaboratively with industry and our public sector partners to deliver transformative growth in the region. The report paints a compelling picture of our region’s collective strengths in innovation, industrial excellence and world-class research. The region has everything it needs to be a major centre of excellence for rail innovation and a driver of associated economic benefit - a substantial business base with growth and innovation ambitions, academic excellence, research and innovation facilities, established networks and a supportive and ambitious public sector. Collectively, our universities have a critical role to play in supporting economic development via collaborative research, networking and the delivery of education that is tailored and responsive to industry needs. Building on our long-standing expertise in rail-related research which, in recent years, has resulted in over £50m of collaborative research with the UK rail industry, we have continued to invest substantially in rail-related research and innovation facilities and knowledge transfer activities. This includes investment in leading-edge research facilities including the Institute of Railway Research at the University of Huddersfield and the Institute for High-Speed Rail and System Integration, which is being developed by the University of Leeds.

Together these strengths and opportunities, coupled with significant industrial and academic expertise across complementary automotive and aerospace sectors, present a compelling case for further investment in the region’s rail research and innovation activities. By leveraging combined industrial, research and innovation strengths for national and regional benefit, there is a unique opportunity for the industry to be a catalyst for economic recovery and one that can make a significant contribution to making the UK’s levelling up agenda a reality. The priority action areas of the study are essential to enable the UK’s rail industry to keep pace with its competition, and hence to position our region at the forefront of rail research and innovation. To maximise this considerable opportunity, we look forward collectively to working with our public and private sector partners to increase connectivity between the innovation pipeline at our universities and industry to deliver benefits to the people who live and work in our region.

PROFESSOR ANDREW BALL PRO VICE-CHANCELLOR, RESEARCH & ENTERPRISE UNIVERSITY OF HUDDERSFIELD

PROFESSOR NICK PLANT DEPUTY VICE-CHANCELLOR, RESEARCH & INNOVATION UNIVERSITY OF LEEDS

RAIL INNOVATION ECO-SYSTEM

UNDERSTANDING THE REGIONâ&#x20AC;&#x2122;S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

Contents Executive Summary

1. Introduction and Background

1.1 Background to the Study

1.2 Study Approach and Methodologies

2. Rail Sector Profile

2.1 Basis of the Study

2.2 Industry Profile

3. Regional Rail Innovation

3.1 Regional Innovation Trends

3.2 Regional Industrial Innovation Activity

3.3 Rail Industry Investment Raising

4. Regional Academic Capability and Expertise

4.1 Nationally Relevant Complementary Research Capability

4.2 Deep Rail Research Capability and Expertise

4.3 Leading Edge Research Collaboration

4.4 Future Rail Industry Innovation Priorities

4.5 Collaboration and New Innovation Thinking

5. Rail Innovation Skills

5.1 Innovation Skills Needs

5.2 Skills Transfer

6. Conclusions and Actions

6.1 Industrial Policy and Economic Development

6.2 Regional Rail Research and Innovation Profile and Positioning

6.3 Rail Innovation Research and Funding

6.4 Human Capital and Skills

6.5 COVID-Related Issues and Response

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

Executive Summary In May 2020, the Universities of Leeds and Huddersfield jointly commissioned a study that would provide insight into industrial strengths and innovation in the railway sector in Yorkshire & the Humber and the wider Northern Powerhouse 11 (NP11) region. Using a data-driven approach, the study sought to better understand the region’s research and innovation capability, capacity and potential, and the associated opportunities to enhance collaborations involving rail research and innovation that can drive industrial progress and economic growth. The subsections below provide a summary of the key study findings, conclusions and recommendations. REGIONAL RAIL INDUSTRY PROFILE

More than 2,500 companies are operating within the rail industry and its supply chain in the NP 11 region. Ninety-two per cent of those companies are SMEs (n=2,354). Both business counts and employment data demonstrate the significance of the region to the UK’s rail industry and vice versa. Calculated as a rate per 1,000 businesses, Yorkshire & the Humber has the highest density of companies of any northern region, at 5.6 businesses per thousand. Yorkshire and the Humber accounts for approximately 12% of all UK employment in rail – on a par with the North West and behind only the South East (16% of related employment). The concentration of related employment in Yorkshire & the Humber (LQ of 1.46) is an indication of the region’s rail industry specialisation. Companies operating in the region have a global reach, including notable presence in the United States, Germany, France and China, and activity in Scandinavia, the Netherlands, India, Italy and Australia.

Companies operating within the rail industry in the north generate between c.£35 - £40bn in reported UK wide revenues each year. Across all of the companies identified, reported revenue figures increased from c.£35bn in 2016, to £40bn in 2018 (+14%). Revenue increases have been driven by companies such as Siemens Mobility, WSP, Bodycote PLC, Amey Rail, Polynt Composites, and VP PLC (among many others). Approximately 15% of annual revenues (c.£5bn annually) are generated by SMEs, with overall increases of c.£1b since 2016, driven by companies such as ABB Cable Management, ASSystem (both involved in providing alternative locomotive power solutions), Universal Wolf (rail and tram systems) and Petards Joyce-Loebl (real-time onboard digital security solutions). These pre-COVID-19 sectoral revenues are set against a backdrop of a sustained slowdown in UK economic growth since 2016 due to uncertainties regarding Britain’s exit from the EU and similar economic slow-downs internationally, making them both more impressive, and more significant for sustained economic prosperity. Nevertheless, layering the 2020 pandemic on top of Brexit uncertainties paints a bleak economic outlook for the UK as a whole – and one in which the rail industry (particularly operators and their supply chains) has been disproportionately adversely affected.

Further, in the period since the study research was completed the extent of the challenge posed by the pandemic has heightened; the government has intervened via emergency measures agreements and more recently via ‘emergency recovery measures agreements’. In the short time since the new measures were put in place there has been much public debate about their benefit (or otherwise) to the rail industry. What is certain is that the chaos caused by COVID-19 to the UK’s current rail delivery model requires a major re-think that looks far beyond the necessarily reactive measures taken to date. RAIL INNOVATION ACTIVITY

To provide deeper insight into the region’s innovative companies a second level of categorisation assigned c.450 companies with an innovation footprint into seventeen taxonomy subsegments. Yorkshire and the Humber and the wider NP11 region has considerable innovation capacity and capability in eight of the seventeen subsegments including rolling stock components and vehicle systems (67 companies and 32 companies respectively), sensing, measurement and remote infrastructure monitoring (49 companies), digitally optimised train planning and operations (36 companies), track systems (30 companies), energy and propulsion (21 companies), and electrification and signalling systems (14 companies within each sub-segment). Rail Vehicle Systems & Rolling Stock Components Ninety-eight companies across the NP11 region with revenues of c.£4.3bn are involved in the design and production of vehicle systems, and in rolling stock component production and maintenance. Together these companies invested more than £31m in R&D (2018) and have raised almost £42m in grants and private investment. Illustrative ‘vehicle systems’ companies include Alstom (design and

RAIL INNOVATION ECO-SYSTEM

manufacture of rolling stock, metros and trams); Hitachi Rail (global provider of rail solutions across rolling stock, signalling services and turnkey); Schunk Carbon Technology (manufacture of carbon brushes, carbon brush systems, slip ring contacts, conductor bands and various other components for application in rail); and TMD Friction (one of the world’s largest manufacturers of brake friction materials and global leaders in brake friction technology). Illustrative rolling stock components and maintenance companies include Advanced Engineering Techniques (rolling stock fabrications, friction management systems and electrical enclosures); Hanson Springs (precision and coil springs for bogie suspensions, buffers, as well as signalling and track parts); FTL Technology (sealing solutions for suspension systems, drive systems, gearboxes and speciality seals); and LPA Group (lightweight, energy-efficient LED-system luminaires with applications in new-build trains and replacement lighting systems, LED downlights and train LED lamps). Track Systems & Infrastructure Sensing and Remote Monitoring Seventy-nine companies in the region are involved in design and application of rail infrastructure track systems, and in infrastructure sensing, measurement and remote monitoring. Together these companies generate c.£2.6bn in UK revenues, invested c.£26m in R&D (2018) and have raised c.£21m in grants and private investment . Illustrative track systems companies include Lindapter (clamping systems, steelwork fixings and/or bespoke product developments); Rosehill Polymers (railway level crossing systems); Arcelor Mittal (steel manufacturer supplying rails for railways, subways, trams, light tracks, crossings, crane rails and rail components); and Heat Trace (winter protection applications for rail network infrastructure, and a high temperature, parallel resistance, constant watt rail and points heating system). Illustrative sensing, measurement and

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

remote monitoring companies include Acuity Robotics (infrastructure intelligence solutions enabled by robots); Instrumentel (electronic systems for monitoring conditions in high-stress environments); and Wakefield Acoustics (leading manufacturers of advanced industrial, commercial and environmental noise control systems). Digitally Optimised Train Planning and Operations Thirty-six companies are involved in the design and application of digital systems to optimise train planning and operations. These companies contribute known UK revenues of c.£0.4bn, invested over £17m in R&D in 2018 and have raised c.£20m in grants and private investment. Illustrative companies operating within this industry segment include 3Squared (tailored software applications including ‘RailSmart’ – a suite of operational software tools for control staff, train crew, ground staff and engineers | ); SimplifAI Systems (artificial intelligence to generate realtime transport and traffic control strategies); eviFile (streamlined recording, collation and storage of rail infrastructure construction verification assurance data); and Nomad Digital (a global provider of passenger and fleet management end-to-end solutions to the rail industry). Energy and Propulsion Twenty-two companies in the region are involved in the design and development of energy and propulsion technologies. These companies contribute known UK revenues of c.£1.8bn, invested almost £12m in R&D (2018) and have raised c.£24m in grants and private investment. Example companies include Magnetic Systems Technology (leading designer and manufacturer of electric vehicle drive systems); Libertine FPE (piston free linear power system technologies for use in a wide range of applications including transport); Avid Technology (design and manufacture of electrified powertrain components

and systems); and Cummins Engines (stateof-the-art diesel and natural gas-powered engines and global provider of high-speed high horsepower engines). Electrification and Signalling Systems Twenty-eight regional companies are involved in the design, development and installation of electrification and / or signalling systems. These companies contribute known UK revenues of c.£1.9bn, invested £18m in R&D (2018) and have raised c.£19m in grants and private investment. Illustrative companies involved in design and implementation of electrification systems include Siemens Mobility (provider of end-to-end electrification supply chain products and services, including AC and DC traction power supply, contact lines, and network control); Colas Rail (total life asset maintenance support including catenary/electrification maintenance); Ellis Patents (a leading manufacturer of cable cleats for single, multiple and trefoil industrial and electrical applications); Slingco (world-leading supplier of cable pulling grips and wire rope assemblies including a range of high-quality stainless / galvanised steel, or non-metallic pulling grips, swivels, array rollers, connectors and general wire rope assemblies). Example companies involved in signalling systems activity include Unipart Rail (fully assembled signalling location cases and relocatable equipment buildings, and a complete signalling power product range, including applications for new installations through to legacy upgrades); Linbrooke Services (design and build of signalling projects throughout the UK rail network); Henry Williams (design, manufacture and installation of electrical control systems and allied products for signalling and electrical installations); and British Cables Company (high-quality rail signalling cables).

Investment Raising among Innovation Active Firms Seventy-seven of the 450 innovation active companies identified (17%) have secured funding via either grants or equity investment – amounting to almost £170m since 2007. Investment data shows significant levels of prolonged investment raising in more conventional infrastructure and rolling stock categories (c.£36m and c.£50m respectively), and more recent investment in digital systems and customer experience (c.£26m and c.£6m respectively since 2013). The most notable increase in investment has been within the Energy & Sustainability category where, since 2014, companies in the NP11 region have secured almost £50m in private investment. ACADEMIC CAPABILITY & EXPERTISE

The NP11 region is home to broad and deep rail industry research and innovation expertise, including within the University of Huddersfield and three other of the eleven UK universities involved in the UK’s Rail Research and Innovation Network (UKRRIN), as well as significant rail research experience and expertise at the University of Leeds, the University of York, and the University of Hull. The Universities of Huddersfield and Leeds have invested substantially in rail-related research and innovation facilities, knowledge, and knowledge transfer in recent years – a fact that has been recognised by industry representatives via this study. They have also engaged extensively in collaborative research with industry, generating rail-related research income of almost £100m via more than 400 research projects. Of that income, approximately 50% comes by way of collaborative research with UK rail industry partners. As a result of these investments and extensive collaborative research activity, the two LCR universities now host nationally and internationally significant rail research and innovation assets.

RAIL INNOVATION ECO-SYSTEM

For example, the Institute of Railway Research (IRR) at the University of Huddersfield is a worldleading centre of railway engineering research. The Institute has received substantial industry and research grant funding and recently won the prestigious Queen’s Anniversary Prize, for research and development (November 2019). At the start of 2019, the Centre of Excellence in Rolling Stock was officially launched at the Institute, sharing in £90 million of funding, distributed among three University rail research and innovation ‘Centres of Excellence’ that make up UKRRIN. Huddersfield’s Centre for Innovation in Rail (CIR) has built upon the world-class research and development capabilities of the IRR to support the rail industry supply chain in bringing new technologies to the rail sector. The University of Leeds is developing a new c.£80m state-of-the-art Institute for High-Speed Rail and System Integration (IHSRSI). The new Institute will be sited on the Leeds City Region Enterprise Zone at Aire Valley to the South East of the city centre and will comprise three testing capabilities that together are expected to provide a ‘whole-system’ test facility that facilitates more efficient and effective design and delivery of high-speed rail systems. IHSRSI facilities will complement existing state-of-theart passenger experience and virtual reality simulation test facilities in the University’s Institute for Transport Studies, including Virtuocity and the Highly Immersive Kinematic Experimental Research (HIKER) laboratory. Virtuocity is a unique programme for simulation and virtual prototyping of urban mobility and urban dynamics solutions, and the HIKER laboratory is the largest ‘cavebased’ pedestrian simulation environment of its type in the world – allowing participants to interact with a variety of urban environments and vehicles in a 9m x 4m simulation space.

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

Together, since 2014 the rail research institutes at the Universities of Huddersfield and Leeds have produced more than 1,800 research outputs within subject areas that are highly relevant to all aspects of the rail industry, from transport planning, policy and economics, to engineering, environmental science, physics, materials, and computer science among other subject areas. Field Weighted Citation Impact (FWCI) of these publications averages 1.44 (i.e. 44% above the expected global citation impact) and stretches to above 2 (two times more cited than average) in certain subject areas including energy engineering and power technology, fuel technology, transport planning, policy and economics. Combined and highly complementary university subject area expertise aligns well to the industry taxonomy developed to inform this study. Beyond the two commissioning universities the Institute of Railway Studies (IRS) is a longstanding joint initiative between the University of York and the National Railway Museum (NRM) who together recognise the considerable value contained within the NRM’s collection and archives, and are committed to extracting greater value and impact from these resources. The Logistics Institute at the University of Hull has established world-renowned expertise in logistics and supply chain management research and education. The Institute’s focus is to drive sustainable growth through viable logistics and has delivered strategically significant projects for the UK’s rail industry, including the UK’s first digital rail infrastructure platform – designed to optimise freight route planning for Network Rail. Within the wider NP11 rail innovation eco-system, breadth and depth of rail industry expertise extend across numerous other research and innovation assets from colleges like Doncaster (home of the National College of High-Speed Rail) and Mayerscough (railway engineering apprenticeships); to various wider academic

capabilities in Newcastle (New Rail Research Centre), Durham (Department of Engineering and Sustainable Infrastructure), Manchester (Rail Technology Unit), and Sheffield (Rail Innovation & Technology Centre); and other governmentfunded research institutes with broader expertise that is highly relevant to the region’s rail industry, such as the Centre for Process Innovation and the National Physical Laboratory. RAIL INNOVATION SKILLS

Evidence regarding rail innovation skills needs in the region has been gathered via a combination of job post data, online academic and industry survey responses, and strategic stakeholder consultations. Data shows clear evidence of need in two key areas – engineering and software development. More than fifty per cent of all advertised job roles required engineers, which fits closely with strong sentiment returned within both the online industry survey and strategic stakeholder interviews. In addition to these technical engineering roles, strategically significant regional companies are also looking for people in IT, software development and analytics roles. From a wider industry perspective, the industry survey asked, “if you could access any technical specialism to support your firm’s R&D and innovation activity, what would it be and why?” Responses frequently referred to the same engineering and software development/analytics needs, as well as a broader ambition to do more R&D and innovation activity in-house. There was broad consensus among strategic stakeholders that the region is very well positioned to meet future rail industry skills needs, with genuinely niche expertise within the region’s Universities, and similarly positive skills development initiatives across the skills pipeline. Nevertheless, strategic stakeholder interviews and academic survey responses suggested scope for increased fluidity of movement between academia

RAIL INNOVATION ECO-SYSTEM

and industry, particularly when it comes to engineering skills, but equally applicable to digital and data science skills. As one strategic stakeholder put it: â&#x20AC;&#x153;We need research engineers in companies because they understand what researchers are capable of â&#x20AC;&#x201C; otherwise what happens is you have non-research engineers setting up incorrect problem statements.â&#x20AC;? Enabling more fluid movement of research engineers, and similarly, software engineers and data science researchers between academia and industry on a structured basis should, over time, serve to raise awareness within industry of the potential for collaborating with universities and make it easier to collaborate.

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

CONCLUSIONS & ACTIONS

The study has demonstrated the considerable railway research and innovation capability that exists within the Universities of Leeds and Huddersfield, and across the wider NP11 region. The research activity undertaken across the two commissioning universities is industrially-led, with more than half of all research funded via industrial partnerships. The study has also highlighted the high degree of complementarity between industrial and academic capacity and capability across the Yorkshire and Humber region, and the extensive investment made by the two universities, and by industry, in rail research and innovation activity. Together these factors offer a compelling case for further investment in the region’s rail research and innovation activity as a driver of economic recovery and longer-term industrial advancement and economic growth. Based on the research, a series of lower-level conclusions and proposed actions can be drawn under five themes, namely: 1. Industrial policy and economic development; 2. Regional rail innovation profile and positioning; 3. Rail innovation research and funding; 4. Human capital and skills; and 5. COVID-related issues and response. In terms of industrial policy and economic development, conclusions and recommendations centre on the opportunity that the region’s rail industry presents to make ‘levelling-up’ a reality and to drive Local Enterprise Partnership 5-Point Plans. The study also demonstrates clear alignment between regional rail innovation activity and the UK’s wider rail innovation ambitions. Conclusions and suggested actions in respect of regional rail research and innovation focus on how the two commissioning universities and the wider research and innovation eco-system across NP11 can bring expertise to bear most effectively

nationally and internationally. At a more local level, the study offers suggestions about how the two commissioning universities can maximise industrial benefits from collaborative research and access to the extensive research facilities and expertise available at the two institutions. It also highlights an opportunity for the commissioning universities to be a catalyst for rail research and innovation by enhancing and extending opportunities for existing clusters of innovative SMEs to showcase capability and access Tier One and Tier Two contracting opportunities. In terms of human capital and skills, the study identifies opportunities for the commissioning universities and wider rail innovation eco-system to make major contributions to national requirements for rail industry engineering and software/dataoriented skills and supporting skills-transfer between academia and industry. Finally, the study recognises the major challenges posed by the COVID-19 pandemic, including specific risks to innovation, research and development activity. It highlights an urgent and severe need to safeguard innovation activity and to better understand the future of UK rail beyond the necessarily reactionary measured adopted to date. Yet it also emphasises opportunities that exist to leverage rail industryspecific strengths to aid economic recovery. Based on the conclusions and actions set out in this report, the study team worked with the study Steering Group to establish a detailed set of practical actions and associated timeframes which are available in the accompanying action plan.

RAIL INNOVATION ECO-SYSTEM

1. Introduction and Background

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

Perspective Economics Limited has been commissioned by the Universities of Leeds and Huddersfield to conduct a study into the rail innovation eco-system in Yorkshire & the Humber. This report provides insights derived from the study research. 1.1. BACKGROUND TO THE STUDY

The Universities of Leeds and Huddersfield are seeking to map the region’s rail ‘innovation ecosystem’ and help further their understanding of industry strengths in rail1. This study seeks to identify whether a genuine rail cluster exists across specified geographies of interest, responding to the following two key questions: 1. What does the rail industry in the region look like, in particular our research and innovation capability, capacity and potential? 2. What are the opportunities to enhance collaborations involving rail research and innovation to drive clusters of businesses that have the potential to innovate and/or adopt new technologies? In addition, the research seeks to: – better understand the nature of the region’s rail industry beyond the top-line facts and figures, identifying key drivers and genuine areas of distinctive strengths, opportunities and barriers and the region’s capability to address these; – explore attitudes towards co-operation and innovation within the sector; and – analyse the strength and functionality of linkages within the sector, in particular, university to business interactions, interbusiness connections and interactions between rail businesses and support institutions.

The study has also sought to produce a set of priority actions, interventions and potential funding options that could directly tackle the challenges, opportunities and any evident gaps identified through the research. The sub-sections below detail the study approach, following initial discussions with the study Steering Group and methodological amendments due to COVID-19 restrictions. 1.2. STUDY APPROACH AND METHODOLOGIES

The study comprised 12 stages, including a detailed analysis of quantitative statistics and in-depth qualitative research via online and telephone surveys, and case study development. It combined automated interrogation of a wide range of open source and proprietary industry datasets, together with human insight and quality assurance. Core elements of the study approach and methodology are summarised below. – Project Initiation: a Project Initiation Meeting (PIM) was held in mid-March 2020 with key representatives from the commissioning Universities. Feedback regarding the overarching method was reflected in a Project Initiation Document, and final approach and methodology agreed in late-March.

The geographic ‘region’ is defined (and referenced within the report) at three levels namely i) NP 11 (eleven LEPs in the North including Leeds City Region, Cheshire & Warrington, Cumbria, Greater Manchester, Humber, Lancashire, Liverpool City Region, North East, Sheffield City Region, Tees Valley, and York and North Yorkshire); ii) Yorkshire & the Humber (15 local authorities: Barnsley, Bradford, Calderdale, Doncaster, East Riding of Yorkshire, Hull, Kirklees, Leeds, North East Lincolnshire, North Lincolnshire, North Yorkshire, Rotherham, Sheffield, Wakefield and York) and iii) Leeds City Region (10 local authorities: Barnsley, Bradford, Calderdale, Craven, Harrogate, Kirklees, Leeds, Selby, Wakefield and York).

RAIL INNOVATION ECO-SYSTEM

– Landscape Review: a desk-based review of publicly available contextual data and documentation was undertaken in April and early May, providing an overview of the rail economy from a strategic policy and economic perspective at each of the three geographic levels. The landscape review provided detailed descriptions of eco-system assets (academic institutes and centres, industry research facilities, major research projects and associated research funding), which were mapped and made available via Tableau. Sources included in the review included but were not limited to: •‒

National economic statistics available from the Office for National Statistics (ONS) and the Department for Business, Energy and the Industrial Strategy (BEIS).

•‒‒

Rail industry statistics available via the Rail Delivery Group (RDG), the Rail Supply Group (RSG), and the Rail Safety and Standards Board (RSSB)

‒ •‒ Strategic national and regional policy documentation including Strategic Economics Plans (Leeds City Region, York, North Yorkshire & East Riding, Humber); the Leeds City Region Local Industrial Strategy Draft Priorities; the Rail Sector Deal; and HS2 National and City Region Growth Strategies ‒ •‒ University and related rail innovation collateral, including publicly available information regarding relevant university rail research infrastructure and industry networks ‒ •‒ Rail innovation specific strategy documentation including for example Network Rail’s R&D Strategy and RSSB Innovation Programme updates.

– Taxonomy development: descriptive data collected via the long-listing process was used together with strategic innovation policy documentation to identify an initial taxonomy within which to categorise rail industry companies. In-depth review and refinement of the taxonomy was undertaken in close collaboration with the study steering group before a final taxonomy was agreed. – Rail Industry Intelligence Gathering: an initial search strategy used text analytics based on industry classification terminology to produce a long-list of rail industry companies potentially within the scope of the research. Initial searches were supplemented with publicly available data regarding regional rail companies from relevant membership bodies and other known business lists. Companies not relevant to the study were removed via a combination of text analytics and manual review. A refined set of rail industry companies formed the basis for supplementary data collection via a range of open source and subscription data, including Beauhurst, Bureau van Dijk, Burning Glass, Crunchbase, Gateway to Research, and Tussell2. – Sectoral research and engagement: engagement from industry and wider academia was garnered via mixed-method primary research, including in-depth semi-structured interviews with more than 20 representatives from industry, academia and local government, online surveys of both rail researchers (22 respondents from 18 academic institutions) and rail industry companies (82 respondents), and a follow-up telephone interview with rail industry companies (30 responses).

https://www.beauhurst.com/, https://www.bvdinfo.com/en-gb, https://www.burning-glass.com/, https://www.crunchbase.com/home, https://gtr.ukri.org/, https://www.tussell.com/

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

– Case study research: findings from the collation of secondary data, online and telephone surveys were supplemented by additional desk-based research to produce a series of case studies that serve to illustrate key findings throughout the report (for example the relationship between eco-system assets and businesses, the variability in industry pathways to innovation, focus of investment etc.) – Regional benchmarking: a sample of high instance SIC codes formed the basis for regional benchmarking across the North, and more widely across the UK. Benchmarking indicators included firm counts, employment and firm revenues. – Analysis and reporting: findings from the breadth of qualitative and quantitative research outlined above were combined to produce this final report. All underlying data was provided to the commissioning universities.

2. Rail Sector Profile

RAIL INNOVATION ECO-SYSTEM

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

2.1. BASIS OF THE STUDY

The study is based on a set of rail sector businesses that have been identified using text analytics and web-scraping methods. The approach seeks to provide a more granular understanding of the rail industry in the region, beyond what is possible via traditional Standard Industrial Classification (SIC) code-based methods.

FIGURE 2.1 – RAIL SECTOR TAXONOMY ALL REGISTERED FIRMS (2,550)

DEDICATED RAIL

RAIL SUPPLY

(1473, 58%)

(1077, 42%)

VISIBLE TRADING PRESENCE (TAXONOMY FIRMS) (1230, 48% OF ALL REGISTERED FIRMS)

2.1.1. Dataset Development DEDICATED RAIL

RAIL SUPPLY

(337, 27%)

(893, 73%)

RAIL SECTOR TAXONOMY (1,189)

ROLLING STOCK

INFRASTRUCTURE

(310)

(561)

DIGITAL SYSTEMS

ENERGY & SUSTAINABILITY

(128)

(105)

CUSTOMER EXPERIENCE (85)

INNOVATION FOOTPRINT (444)

DEDICATED RAIL

RAIL SUPPLY

(72, 16%)

(378, 84%)

BREADTH OF DEFINITION

In conjunction with the study Steering Group, a set of key terms that reflect rail industry activity were identified and used to compile an initial long-list of rail sector businesses from a range of secondary data sources. Additional companies were included using web-scraping methods (e.g. from online lists of industry body members) and manual review of companies identified via previous research. Together, a total of c.5,000 businesses were identified from across more than ten unique sources. The long-list was refined initially through a combination of matching to secondary data sources (e.g. Companies House API) and manual review. The review process resulted in a set of 2,550 registered rail industry companies across the three northern regions (North East, North West and Yorkshire & Humber).

2.1.2. Taxonomy Development To provide more granular insights into the composition of the rail industry in the North, the study team worked closely with the Rail Innovation Steering Group (RISG) to categorise rail industry businesses. The process of refining an initial longlist of rail industry businesses into the taxonomy is summarised in Figure 2.1. (see previous page) Key definitional points to note include: Registered Companies / Visible Trading Presence: the initial search strategy returned extensive lists of all companies that are registered and active in the UK. Many of these companies are micro-businesses and sole traders, and many therefore do not have a visible online trading presence. To derive maximum benefit from the study, subsequent analysis focussed on companies for which a ‘visible trading presence’ could be identified. Dedicated Rail / Rail Supply Chain: following the dataset development process, businesses were assigned to ‘Dedicated Rail’ and ‘Rail Supply Chain’ categories. Where reference to the rail industry is included in top-line descriptive text (gathered from either Bureau Van Dijk and/or via web-scraping) companies were identified as ‘Dedicated Rail’ businesses. All other companies were categorised as being part of the ‘Rail Supply Chain’ i.e. involved in providing products or services to the rail industry as part of more diversified business activities. A total of 337 companies (27% of all companies identified) can be categorised as dedicated rail industry businesses.

RAIL INNOVATION ECO-SYSTEM

Innovation Footprint: following the dataset development process a series of steps were taken to identify companies that had an ‘innovation footprint’, including those that had recorded investment in R&D, those in receipt of public or private sector investment, and those involved in collaborative research projects. Note that these steps were taken to assist in isolating and highlighting aspects of rail innovation that are prevalent in the region. Innovation activity clearly takes place in various guises within many more rail sector businesses and the figures presented here are not intended to provide an exhaustive list of innovative businesses. It is also worth noting here the significant number of dedicated rail businesses for which a visible trading presence was not identified. More than 500 dedicated rail businesses had no recorded employees in 2018 or 2019 – providing an indication of the extent to which the rail industry in the region also supports rail-related sole traders. The vast majority of these companies have ‘Construction of railways and underground railways’ as their Standard Industrial Classification.

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

2.2. INDUSTRY PROFILE

2.2.1. Firm Count A total of 2,550 companies have been identified as operating within or with the rail industry in the NP 11 region. Of those companies, an estimated ninetytwo per cent are SMEs (n=2,354)3. Figure 2.2 below uses incorporation dates to demonstrate a growing rail industry base across the northern regions.

FIGURE 2.2 – GROWING RAIL INDUSTRY BUSINESS BASE

N U M B E R O F CO M PA N I E S

0 1988

1990

1992

1994

1996

1998 2000 2002 2004 2006 2008 2010

2012

2014

2016

2018 2020

Y E A R O F I N CO R P O R AT I O N Source: Bureau van Dijk

Two thirds (1,679) are confirmed in Bureau van Dijk as being SMEs, a further 675 companies are recorded as being ‘unconfirmed’, of which the vast majority are also expected to be SMEs or sole traders.

RAIL INNOVATION ECO-SYSTEM

Figure 2.3 provides an illustration of firm densities across the three northern regions. At the broadest level of industry definition (comprising all dedicated rail companies and diversified supply chain companies) data suggests that each region has a similar rail industry profile. Calculated as a rate per 1,000 businesses, Yorkshire & the

Humber has the highest density of companies, at 5.6 per thousand businesses. The pattern of firm densities is similar when only dedicated rail industry companies are included (2.1 per 1,000 in the North East, 2.7 per 1,000 in the North West and 3.3 per 1,000 in Yorkshire & the Humber).â&#x20AC;&#x192;

FIGURE 2.3 â&#x20AC;&#x201C; REGIONAL INDUSTRY OVERVIEW

Rate Per Thousand Businessess: 4.4

5.6

North East (England) Number of businessess: 306 Per 1,000 businesses: 4.4

North West (England) Number of businessess: 1,221 Per 1,000 businesses: 4.6

Yorkshire and The Humber Number of businessess: 1,023 Per 1,000 businesses: 5.6

Source: Bureau van Dijk, Perspective Economics

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

2.2.2. Employment and Industry Specialisation Using rail specific SIC codes that account for c.20% of firms identified within the study as a basis for UK comparison4, Y&H accounts for 12% of all UK employment in rail – on a par with the North West (also 12%) and behind only the South East (16% of related employment). Translating these absolute

employment figures into location quotients shows the concentration of related employment in the region (LQ of 1.46) and provides an indication of the degree of specialisation within Yorkshire and the Humber and the significance of the industry to the region.

FIGURE 2.4 – RAIL-RELATED INDUSTRY SPECIALISATION

Location Quotient: North East (England) LQ: 1.63

0.9004

1.6293

North West (England) LQ: 1.04 Yorkshire and The Humber LQ: 1.46

East Midlands (England) LQ: 1.39 West Midlands (England) LQ: 1.15 Wales LQ: 1.28

South West (England) LQ: 1.28

East of England LQ: 0.90

South East (England) LQ: 1.17

Source: Business Register & Employment Survey

Business Register and Employment Survey, 2018. SIC codes include 49100: Passenger Rail Transport Interurban; 42120: Construction of railways and underground railways; 30200: Manufacture of railway locomotives and rolling stock; 28150: Manufacture of bearings, gears, gearing and driving elements; 28990: Manufacture of other special purpose machinery n.e.c.; and 30990: Manufacture of other transport equipment n.e.c.

RAIL INNOVATION ECO-SYSTEM

2.2.3. International Industry Presence Sixty-seven companies within the dataset identify international locations within which they have a trading presence. Figure 2.5 illustrates the international reach of rail industry companies in NP11.

FIGURE 2.5 â&#x20AC;&#x201C; INTERNATIONAL RAIL INDUSTRY TRADING PRESENCE

Companies present in location: 1

Source: Bureau van Dijk

Twenty-three companies have a presence in the United States, seventeen and fifteen have a presence in Germany and France respectively, fourteen have a trading presence in China, and between 8 â&#x20AC;&#x201C; 10 companies have a presence in Scandinavia, the Netherlands, India, Italy and Australia.

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

2.2.4. Foreign Direct Investment Over the last two years, Yorkshire and the Humber has attracted a total of 235 Foreign Direct Investment (FDI) projects, representing six per cent of all UK FDI projects and ranking Yorkshire and the Humber sixth out of the 12 UK regions for number of FDI projects secured in that period. Across the whole of the UK there were a total of 3,854 FDI projects, of which ‘Environment, Infrastructure and Transportation’ and ‘Advanced Engineering and Supply Chain’ together account for 15 per cent (n=590). In July of this year, Siemens Mobility started construction on the first phase of its £200m manufacturing facility in Goole, East Yorkshire. The investment will see Siemens develop a new train manufacturing plant and rail supply-chain village that will build new London Underground Piccadilly Line tube and future mainline trains. Siemens has highlighted the potential for scale and ready access to the skilled workforce required to build and operate the factory as two of the key reasons for their decision to locate the new facility in Yorkshire and the Humber. The new facility is expected to create up to 700 skilled jobs in engineering and manufacturing and has the potential to create a further 1,700 indirect jobs throughout the UK supply chain5. At the start of this year Siemens also unveiled plans to develop a rail industry innovation centre in the region to complement the new manufacturing facility. The Rail Accelerator and Innovation Solutions Hub for Enterprise (RaisE) is expected to offer a high-quality facility for start-ups and SMEs linked to rail industry supply chains to collaborate, innovate and grow. The first phase of manufacturing facilities is expected to open in 2023. FDI projects in South Yorkshire6 in recent years, including investments by McLaren and Boeing, have helped to bolster both the level of innovation activity and Sheffield City Region’s reputation

nationally and internationally as a location for automotive and aerospace research, development and innovation. The recent Siemens investment in East Yorkshire demonstrates the potential that the region has for securing major rail-related FDI projects, and together the region now boasts significant industrial and academic expertise across the complementary automotive, aerospace and rail sectors. These investments, coupled with the evidence presented in this report regarding the region’s rail industry strengths and research expertise, should serve to drive further rail-related FDI into the wider Yorkshire and Humber and NP11 regions. 2.2.5. Industry Categories From the starting point of 2,550 registered businesses, companies with a visible trading presence in the north were identified using a combination of secondary data sources and webscraping methods. A total of 1,189 companies were identified as having a visible trading presence and were therefore included within a categorisation process at two levels. Companies were categorised using a combination of automated identification (using text analytics) and where automated categorisation was not possible due to less informative or relevant text available within trade descriptions and / or top-line website descriptions, manual allocation based on desk research (less than 10% of firm allocations). The 1,189 companies with a visible trading presence were first assigned to five top-level categories as follows: 1. Infrastructure (561 companies, 47%) 2. Rolling Stock (311 companies, 26%) 3. Digital Systems (127 companies, 11%) 4. Energy & Sustainability (105 companies, 9%) 5. Customer Experience (85 companies, 7%)

https://new.siemens.com/uk/en/company/about/goole.html

https://sheffieldcityregion.org.uk/more-than-3000-jobs-created-in-last-year-as-companies-invest-in-the-sheffield-city-region/

RAIL INNOVATION ECO-SYSTEM

track and rolling stock component manufacturing, and the region’s considerable textile industry facilitated the supply of railway carriage construction and furnishing.

Just under half of the regional rail industry businesses identified are involved in rail infrastructure activity (47%), approximately one quarter are involved in rolling stock (26%), with the remainder (27%) involved in data and digital systems, energy and sustainability, and customer experience. The composition of the industry set out here is reflective of the central role that the North of England played in railway development internationally. From the emergence of short wagonways designed and operated to carry coal from pits to larger terminals in the 1600s, through development of the world’s first public railway in West Yorkshire, to the emergence of the world’s first inter-city passenger railway in the North West – the heart of the region’s rail industry is involved in design, development and maintenance of railway infrastructure and rolling stock. Legacy coal mining activity has cross-overs to conveying and tunnelling in the rail industry; the presence of large steel manufacturing and engineering capabilities in South and West Yorkshire respectively gave rise to

Headline firm counts by category across the northern regions are summarised in Figure 2.6 below. At this highest level, industry composition across all other categories (rolling stock, digital systems, energy and sustainability, customer experience and rail freight) are broadly comparable, which demonstrates rail industry strength in breadth across the north. In each region, a majority of companies are involved in rail-related infrastructure activity with just under half of identified companies in the North West and Yorkshire and the Humber falling into this category (industry activity including rail infrastructure design, development, construction and maintenance). Forty-three per cent of categorised companies are located in the North West, with 42% in Yorkshire & Humber and 15% in the North East.

FIGURE 2.6 – REGIONAL INDUSTRY COMPOSITION A. Yorkshire & The Humber Number of businesses: 500 | % of regional businessess: 42.1% 7%

10%

49%

25%

B. North East Number of businesses: 174 | % of regional businessess: 14.6%

C A

12%

10%

12%

41%

25%

C. North West Number of businesses: 515 | % of regional businessess: 43.3% 6%

12%

47%

27%

Rail Industry Category: Customer Experience

Digital Systems

Source: Bureau van Dijk, Perspective Economics

Energy & Sustainability

Infrastructure

Rolling Stock

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

2.2.6. Economic Contribution & Context Companies operating within the rail industry in the north generate between c.£35 - £40bn in reported UK wide revenues each year. Across all of the companies identified, reported revenue figures increased from c.£35bn in 2016, to £40bn in 2018 (+14%)7. Revenue increases have been driven by companies such as Siemens Mobility, WSP, Bodycote PLC, Amey Rail, Polynt Composites, and VP PLC (among many others)8. Approximately 15% of annual revenues (c.£5bn annually) are generated by SMEs, with overall increases of c.£1b since 2016, driven by companies such as ABB Cable Management 9, ASSystem (both involved in providing alternative locomotive power solutions), Universal Wolf (rail and tram systems) and Petards Joyce-Loebl (real-time onboard digital security solutions). Within SME revenues, dedicated rail businesses (those that include reference to rail sector activity within top-line descriptive information) generate c.£1.5bn annually (c.30%), with significant contributions made by companies such as Sabre Rail (specialist component overhaul), Teescraft Engineering (precision component engineering), Kilfrost (track de-icing) and Faiveley Transport (onboard vehicle systems) among others. However, in contrast to the wider industry trends set out above, revenues among dedicated rail industry SME businesses have remained broadly flat. These pre-COVID-19 sectoral revenues are set against a backdrop of a sustained slowdown in UK economic growth since 2016 due to uncertainties regarding Britain’s exit from the EU, and similar economic slow-downs internationally10. In that respect, increased revenues among companies identified through this study are both more impressive, and more significant for sustained economic prosperity. Nevertheless, layering the 2020 pandemic on top of Brexit uncertainties paints a bleak economic outlook for the UK

7 8

9 10 11 12

as a whole – and one in which the rail industry (particularly operators and their supply chains) have been disproportionately adversely affected11. Recent research by the Rail Supply Group (RSG) into the impact of COVID-19 on the UK rail industry highlighted the need for swift action from the UK government to manage the impact of the pandemic and confirmed the importance of accelerating mobilisation of the Rail Sector Deal12. Both the scale of the economic challenge facing the industry and the acute need for government intervention were reiterated in responses to our online industry survey. When asked to outline 12-month growth expectations pre and post COVID-19, responses (n=50) highlight a clear swing in sentiment from some degree of growth (82% of pre-COVID responses) to low, no or negative growth as a result of COVID-19 (81% of post-COVID responses), with the starkest changes among companies previously anticipating in moderate growth pre-COVID (75% reduction) and those predicting negative growth post-COVID (92% increase). Examples of qualitative comments made in support of growth projections provide some explanation for these post-COVID predictions. •

“Most of our customers have put a hold to major projects we were bidding on due to Covid-19 Transport for London is one prime example.”

•

“Delays in upgrades and expenditure by Train Operating Companies (TOCs).”

•

“C19 has impacted our largest market segment (TOCs) as emergency measures and lockdown has significantly affected their income.”

•

“We were working towards development targets and sectors for growth and are now not for obvious reasons. Certain planned sector growth has been put on hold due to uncertainty surrounding some of our customers”.

Bureau van Dijk FAME Company Database Analysis includes revenues generated across multiple sites and multiple service lines and therefore not attributable to the rail industry. Subsequent analysis regarding dedicated rail sector SMEs provides better insight into direct rail industry revenues. Note that ABB Cable Management is a constituent firm of ABB and is categorised as an SME Bank of England Monetary Policy Report November 2019 As evidenced within the Rail Supply Group’s recent industry survey findings: https://rsgtaskforce.org Rail Supply Group, 2020 “Act Now: The Rail Supply Group Task Force Coronavirus (COVID-19) Response”, July 2020

RAIL INNOVATION ECO-SYSTEM

Qualitative responses also provide some insight into COVID-related risks to innovation activity – pausing product development processes and de-stabilising diversification into innovation activity, for example:

Despite these obvious challenges, growth projection responses also highlighted the important role that the rail industry, and in particular rail infrastructure should play in mitigating economic challenges:

•

• “National requirement for rail plant to meet the demand in rail construction and maintenance over the next 5 years to replace old machines”.

“A number of projects expected to be let in early 2020 have been delayed, which means that the market deployment of our innovate systems will not have progressed and matured as we enter our next FY, thus reducing the possibility of rolling out systems at scale. Spending is almost certainly reduced and even cut from budgets during COVID-19 and it will take some time before operators commit to spending again.”

•

“Brexit has been a disaster for the company. We have been struggling with lost contracts due to this. We were investing in AI activities, but COVID-19 has hit is at the wrong time.”

•

“Inspection and Non-Destructive Testing (NDT) development requires integration with supporting systems, this activity requires working in person with others which has been restricted recently.”

In the period since the study survey was conducted, the extent of the challenge posed by the pandemic has heightened and government has intervened via emergency measures agreements and more recently ‘emergency recovery measures agreements’. In the short time since the new measures were put in place, there has been much public debate about their benefit (or otherwise) to the rail industry. What is certain is that the chaos caused by COVID-19 to the UK’s current rail delivery model requires a major re-think that looks far beyond the necessarily reactive measures taken to date.

• “Fortunately, the infrastructure for both rail and the electricity supply industry requires maintenance and investment which shouldn’t be affected too much by the COVID situation”. • “We serve a continuing and nationally important societal infrastructure so we will continue to grow, but the rate of activity has slowed due to the reduction in capital available to our customers.” Overall, the economic picture is one of both significant challenge yet also opportunity. There is a clear opportunity for sustained economic activity in critical industry categories and associated innovation activity in respect of, for example, remote condition monitoring, new products with lower environmental and / or downtime impacts, and decarbonisation of wider infrastructure and rolling stock.

UNDERSTANDING THE REGIONâ&#x20AC;&#x2122;S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

RAIL INNOVATION ECO-SYSTEM

3. Regional Rail Innovation

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

Identifying rail sector innovation activity, and isolating regional rail innovation strengths and opportunities is a key component of the study. To that end, the following steps were taken to identify companies in the region with an innovation footprint: – Companies within the final dataset were re-run through Bureau van Dijk (matched using Company IDs) to identify companies with recorded R&D expenditure within the past 4 years. – Similarly, companies were re-run through Gateway to Research to identify companies involved in R&D collaborations. – Finally, companies within the final dataset were re-run through Beauhurst (investment data platform) to identify tracked (investment raising) companies. Using these indicators, a total of 444 companies were identified as having a rail innovation footprint. In line with the overall industry composition set out above, the profile of innovative companies (dedicated and supply chain companies) is similar across the three regions. Yorkshire & Humber is home to 43% of companies with an innovation footprint (a marginally higher proportion compared to overall firm count), 41% are in the North West and 16% in the North East.

3.1. REGIONAL INNOVATION TRENDS

Analysis of incorporation dates provides some insight into the trend in innovation activity among rail industry companies across the region over time. By looking at incorporation dates for companies included within the highest level taxonomy categories, compared to those that have an innovation footprint, and those that have been involved in collaborative research, an apparent trend emerges towards innovation among supply chain companies (Figure 3.1 overleaf). Despite new dedicated rail companies being incorporated within the last decade, the number of those companies that have an innovation footprint has remained in single digits. Of c.140 dedicated rail industry businesses established in the region since 2008, 8 per cent (n=11) have an innovation footprint. Of the c.275 rail industry supply chain firms established over the same period, almost fifty per cent have an innovation footprint. This is likely to be a product of much broader economic context in which emerging technologies (and therefore business models)13 have applications across industries, but it does also highlight the importance of ensuring that the unique R&D and innovation requirements of dedicated rail industry companies remain high on the agenda. To that end, partnerships not just between academic and research institutions and individual companies, but between research institutions and clusters of companies operating in both dedicated rail and supply chain activity are critical.

See for example BEIS 2019 ‘Regulation for the Fourth Industrial Revolution’ which highlights the extent to which emerging technologies are reshaping almost every industrial sector

RAIL INNOVATION ECO-SYSTEM

FIGURE 3.1 â&#x20AC;&#x201C; INNOVATION AND FIRM AGE

Incorporation Dates - All Taxonomy Firms 20 Dedicated Supply Chain 10

1883

1893

1903

1913

1923

1933

1943

1953

1963

1973

1983

1993

2003

2013

1983

1993

2003

2013

1983

1993

2003

2013

YEAR OF DATE OF INCORPORATION

N U M B E R O F R E CO R D S

Incorporation Dates - Innovation Footprint 20

1883

1893

1903

1913

1923

1933

1943

1953

1963

1973

YEAR OF DATE OF INCORPORATION

Incorporation Dates - Collaborative Research 20

1883

1893

1903

1913

1923

1933

1943

1953

1963

1973

YEAR OF DATE OF INCORPORATION Dedicated

Supply Chain

Source: Bureau van Dijk, Perspective Economics

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

3.2. REGIONAL INDUSTRIAL INNOVATION ACTIVITY

To provide deeper insight into the activities of innovative companies in the region, a second level of categorisation assigned companies with an innovation footprint into taxonomy sub-segments, as illustrated below. Seventeen second-level taxonomy segments are set out in Table 3.1 below.

TABLE 3.1 – TAXONOMY SUB-SEGMENT S

Customer Experience

Passenger Operations Real Time Communications & Connectivity Smart Ticketing

Digital Systems

Data Sharing Protection & Use Optimised Train Planning & Operations Smart Design & Maintenance

Energy & Sustainability

Energy & Propulsion Engineering & Environmental Consultancy

Infrastructure

Construction Electrification Systems Sensing Measurement & Remote Monitoring Signalling Systems Track Systems

Rolling Stock

Components & Maintenance Running Gear Simulation Testing & Remote Monitoring Vehicle Systems

Source: Universities of Huddersfield & Leeds, Perspective Economics

RAIL INNOVATION ECO-SYSTEM

Figure 3.2 provides an illustration of the most prominent innovation sub-segments across the three northern regions. Alongside innovation within rail infrastructure, the region has considerable innovation capacity and capability in: – Rolling stock components and vehicle systems (67 companies and 32 companies respectively) – Sensing, measurement and remote infrastructure monitoring (49 companies) – Digitally optimised train planning and operations (36 companies)

– Track systems (30 companies) – Energy and propulsion (21 companies) – Electrification systems and signalling systems (14 companies within each sub-segment). Headline economic data for each of these industry segments are provided below, together with illustrative information for a sample of companies within each segment. The companies for which descriptive information has been provided represent a purposive sample, to demonstrate predominant industrial activity within each segment.

FIGURE 3.2 – REGIONAL INNOVATION CAPACITY & CAPABILITY Category: Infrastructure Segment: Construction # Firms: 92 % of Category: 46%

Category: Infrastructure Segment: Track Systems # Firms: 30 % of Category: 15%

Taxonomy Category: Infrastructure Taxonomy Segment: Electrification Systems % of Total Number of Records along Taxonomy Segment: 7% Number of Records: 14 Taxonomy Category: Infrastructure Taxonomy Segment: Signalling Systems % of Total Number of Records along Taxonomy Segment: 7% Number of Records: 14

Category: Digital Systems Segment:Data Sharing Protection & Use # Firms: 15 % of Category: 23% Category: Digital Systems Segment: Smart Design & Maintenance # Firms: 15 % of Category: 23%

Category: Infrastructure Segment: Sensing Measurement & Remote Monitoring # Firms: 49 % of Category: 25%

Category: Rolling Stock Segment: Components & Maintenance # Firms: 67 % of Category: 60%

Category: Digital Systems Segment: Optimised Train Planning & Operations # Firms: 36 % of Category: 55%

Category: Energy & Sustainability Segment: Energy & Propulsion # Firms: 21 % of Category: 51% Category: Rolling Stock Segment: Vehicle Systems # Firms: 32 % of Category: 29%

Taxonomy Category: Rolling Stock Taxonomy Segment: Simulation Testing & Remote Monitoring % of Total Number of Records along Taxonomy Segment: 6% Number of Records: 7 Taxonomy Category: Infrastructure Taxonomy Segment: Running Gear % of Total Number of Records along Taxonomy Segment: 5% Number of Records: 6

Source: Universities of Huddersfield & Leeds, Perspective Economics

Category: Energy & Sustainability Segment: Engineering & Environmental Consultancy # Firms: 20 % of Category: 49% Category: Customer Experience Segment: Real Time Communications & Connectivity # Firms: 15 % of Category: 58%

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

3.2.1. Rolling Stock: Vehicle Systems Thirty-three companies with an innovation footprint are involved in the design and production of vehicle systems across the three northern regions. Over one-quarter of those companies are located within the Leeds City Region area, with groups of companies in several local authority areas, including Bradford, Calderdale, Durham, and Wakefield. These companies contribute known UK revenues of c.£2.3bn, invested more than £13m in R&D (2018) and have raised almost £4.5m in grants and private investment14. Companies operating in this industry segment include Alstom (design and manufacture of rolling stock, metros and trams); Hitachi Rail (a global provider of rail solutions across rolling stock, signalling services and turnkey); Schunk Carbon Technology (manufacture of carbon brushes, carbon brush systems, slip ring contacts, conductor bands and various other components for application in rail); and TMD Friction (one of the world’s largest manufacturers of brake friction materials and global leaders in brake friction technology). 3.2.2. Rolling Stock: Components & Maintenance Sixty-five companies with an innovation footprint were identified across the three northern regions are involved in rolling stock component production and maintenance. One-quarter of those companies are located within the Leeds City Region area, with groups of companies in several local authority areas, including Leeds, Barnsley, Sheffield, and Rochdale. These companies contribute known UK revenues of almost £2bn, invested more than £18m in R&D (2018) and have raised almost £37m in grants and private investment. Illustrative companies operating in this industry segment include Advanced Engineering Techniques (rolling stock fabrications, friction management systems and electrical enclosures); Hanson Springs (precision and coil springs for bogie suspensions, buffers, as well as signalling and track parts); FTL Technology (sealing solutions for suspension systems, drive systems, gearboxes

Company data derived from Bureau van Dijk FAME database

and speciality seals); and LPA Group (lightweight, energy-efficient LED-system luminaires with applications in new-build trains and replacement lighting systems, LED downlights and train LED lamps). 3.2.3. Infrastructure: Sensing, Measurement & Remote Monitoring Forty-eight companies with an innovation footprint involved in sensing, measurement and remote monitoring were identified across the three northern regions. Just over ten per cent of those companies are located within the Leeds City Region area, with groups of companies in Leeds, Sheffield, Rotherham, Manchester, Cheshire and Northumberland. These companies contribute known UK revenues of c.£1.4bn, invested almost £24m in R&D (2018) and have raised c.£16.5m in grants and private investment. Companies operating in this industry segment include Acuity Robotics (infrastructure intelligence solutions enabled by robots); Instrumentel (electronic systems for monitoring conditions in high-stress environments); and Wakefield Acoustics (leading manufacturers of advanced industrial, commercial and environmental noise control systems). 3.2.4. Infrastructure: Track Systems Thirty-one companies in the region are involved in the design and application of rail infrastructure track systems. Approximately one-fifth of those companies are located within the Leeds City Region area, with firm clusters in Bradford, Calderdale, Rotherham, Sheffield, and Cheshire. These companies contribute known UK revenues of c.£1.2bn, invested c.£2m in R&D (2018) and have raised c.£4.6m in grants and private investment. Illustrative companies include Lindapter (clamping systems, steelwork fixings and/or bespoke product developments); Rosehill Polymers (railway level crossing systems); Arcelor Mittal (steel manufacturer supplying rails for railways, subways, trams, light tracks, crossings, crane rails and rail

components); and Heat Trace (winter protection applications for rail network infrastructure, and a high temperature, parallel resistance, constant watt rail and points heating system). 3.2.5. Digital Systems: Digitally Optimised Train Planning and Operations Thirty-six companies are involved in the design and application of digital systems to optimise train planning and operations. Over one-third of those companies are located within the Leeds City Region area, with obvious clusters in Leeds, Huddersfield, Sheffield, Manchester, Lancaster and Newcastle. These companies contribute known UK revenues of c.£0.4bn, invested over £17m in R&D (2018) and have raised c.£20m in grants and private investment. Illustrative companies operating within this industry segment include 3Squared (tailored software applications including ‘RailSmart’ – a suite of operational software tools for control staff, train crew, ground staff and engineers); SimplifAI Systems (artificial intelligence to generate realtime transport and traffic control strategies); eviFile (streamlined recording, collation and storage of rail infrastructure construction verification assurance data); and Nomad Digital (a global provider of passenger and fleet management end-to-end solutions to the rail industry). 3.2.6. Energy & Sustainability: Energy & Propulsion Twenty-two companies with an innovation footprint are involved in the design and development of energy and propulsion technologies. One-fifth of those companies are located within the Leeds City Region area, with firm clusters in Leeds, Sheffield, and Gateshead. These companies contribute known UK revenues of c.£1.8bn, invested almost £12m in R&D (2018) and have raised c.£24m in grants and private investment. Example companies include Magnetic Systems Technology (leading designer and manufacturer of electric vehicle drive systems); Libertine FPE

RAIL INNOVATION ECO-SYSTEM

(piston free linear power system technologies for use in a wide range of applications including transport); Avid Technology (design and manufacture of electrified powertrain components and systems); and Cummins Engines (state-of-theart diesel and natural gas-powered engines and global provider of high-speed high horsepower engines). 3.2.7. Infrastructure: Electrification Systems Fourteen regional companies are involved in the design, development and installation of electrification systems. Just under one-third of those companies are located within the Leeds City Region area. These companies contribute known UK revenues of c.£1.6bn, invested £11m in R&D (2018) and have raised c.£15m in grants and private investment. Illustrative companies involved in design and implementation of electrification systems include Siemens Mobility (provider of end-to-end electrification supply chain products and services, including AC and DC traction power supply, contact lines, and network control); Colas Rail (total life asset maintenance support including catenary/electrification maintenance); Ellis Patents (a leading manufacturer of cable cleats for single, multiple and trefoil industrial and electrical applications); Slingco (world-leading supplier of cable pulling grips and wire rope assemblies including a range of high-quality stainless / galvanised steel, or non-metallic pulling grips, swivels, array rollers, connectors and general wire rope assemblies). 3.2.8. Infrastructure: Signalling Systems Fourteen regional companies are involved in the design, development and installation of signalling systems. These companies contribute known UK revenues of c.£277m, invested £7m in R&D (2018) and have raised c.£3.5m in grants and private investment. Example companies include Unipart Rail (fully assembled signalling location cases and

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

relocatable equipment buildings, and a complete signalling power product range, including applications for new installations through to legacy upgrades); Linbrooke Services (design and build of signalling projects throughout the UK rail network); Henry Williams (design, manufacture and installation of electrical control systems and allied products for signalling and electrical installations); and British Cables Company (highquality rail signalling cables).

3.3. RAIL INDUSTRY INVESTMENT RAISING

Seventy-seven of the 450 innovation active companies identified (17%) have secured funding via either grants or equity investment – amounting to almost £170m since 2007. Analysis of company and investment data provides some insight into investment trends across rail industry categories over time. It shows significant levels of more prolonged investment raising in more conventional infrastructure and rolling stock categories (c.£36m and c.£50m respectively), and more recent investment in digital systems and customer experience (c.£26m and c.£6m respectively since 2013). The most notable investment trend is within the Energy & Sustainability category where, since 2014, companies in the NP11 region have secured almost £50m in private investment.

FIGURE 3.3 – INVESTMENT IN REGIONAL RAIL INNOVATION

50M

Taxonomy Category:

£ TOTA L A M O U N T R E C I E V E D BY F U N D R A I S I N G

Customer Experience 45M

Digital Systems Energy & Sustainability

40M

Infrastructure 35M

Rolling Stock

30M 25M 20M 15M 10M 5M 0M 2008

2010

2012

Source: Beauhurst, Perspective Economics

2013

2014

2015

2016

2017

2018

2019

2020

RAIL INNOVATION ECO-SYSTEM

Strategic stakeholder consultations often pointed to challenges associated with accessing R&D and innovation activity within the rail sector, due to a combination of factors including the need for strict health and safety regulations, the reliance on public sector investment as a catalyst for major works, and the capacity (or commercial appetite) among larger companies to invest in relatively low-value R&D activity while delivering such large scale, long-term contracts. These challenges were reiterated by industry representatives via the online survey and present very real risks to the continued development of the UK rail industry. Several industry representatives referred to inertia and an ever-pressing need (exacerbated by COVID-19) for government to provide greater certainty (in the form of administered funds) regarding major works.

Franchise collapse and restructuring post-Williams has caused a hiatus. The sector is also struggling due to a lack of clarity over the work pipeline. â&#x20AC;&#x201C; INDUSTRY REPRESENTATIVE

Despite these challenges, examples of successful R&D development among longer-standing companies do exist and should be used to embolden similar companies with an appetite for R&D and innovation. One such example is well illustrated by Huddersfield based firm Associated Utility Supplies (AUS). The case study overleaf provides some insight into the AUS experience of making R&D part of the companyâ&#x20AC;&#x2122;s core business activity.

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

CASE STUDY:

Associated Utility Supplies Head Office: Huddersfield, Yorkshire & Humber

Incorporated: 1998

Industry Category: Infrastructure

Employees: 70

Since the firm’s inception in 1998, Associated Utility Supplies (AUS) has been sourcing, making and supplying Network Rail and its subcontractors with a range of tools and equipment for electrical supply. In 2017, as a result of requirements for ongoing rail infrastructure upgrades, AUS and the University of Huddersfield took on a Knowledge Transfer Partnership (KTP) graduate, to enhance the firm’s product design process15.

has served to cement R&D as a long-term business strategy – giving the business the certainty it needs to make several R&D oriented acquisitions. Revenues in 2019 were c.£13 million, of which up to two-thirds is directly linked to their rail sector activity, and employee count has increased by over 40%. When asked to highlight critical success factors in the AUS journey from traditional infrastructure business activity to a greatly expanded R&D function, AUS Managing Director Simon Gibson highlighted that:

The KTP provided AUS with new in-house design and product development expertise, which it has been able to use both within core activity (rail infrastructure upgrades) and in response to new Network Rail component modification requirements. New in-house expertise has led to improved manufacturing processes and component design, resulting in increased productivity, competitiveness and lighter, more technically advanced products – the first of which was a low environmental impact footbridge made from reinforced polymer that is easier to install, resulting in reduced network and environmental disruption. The AUS KTP Associate received the UKRI KTP ‘Future Innovator’ award in September 2020. Since the KTP AUS has secured almost £1m in innovation funding which

https://www.hud.ac.uk/news/2020/august/ktp-rail-industry-innovations-aus/

Turnover (2019): £13m

– The nature of R&D means that innovation activity cannot stand still and requires a continued commitment to increasing R&D headcount to service existing projects while still generating and progressing new ideas. – Establishing an R&D portfolio in the rail industry takes commitment of both internal business finance, and time – it requires a long-term view. – Investment of time in building and (critically) sustaining relationships at both individual and company-level with both the University and Network Rail is as important as a willingness to invest financial resources. – Enhanced in-house capabilities have generated unanticipated revenues from offering software expertise as a service.

RAIL INNOVATION ECO-SYSTEM

4. Regional Academic Capability and Expertise

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

The NP11 region is home to broad and deep rail industry research and innovation expertise, including four of the eleven UK universities involved in the UK’s Rail Research and Innovation Network (UKRRIN)16 , as well as significant rail research experience and expertise at the University of Leeds, the University of York, and the University of Hull. In addition to deep rail research expertise, the two commissioning universities offer a broader set of highly complementary research, development and innovation facilities and expertise that makes them well placed to deliver large scale, complex multi-disciplinary research and innovation projects. Further, the Universities of Leeds and Huddersfield undertake extensive, industrially relevant collaborative research with industry. Of the c.£100m in rail-related research income generated by the two universities more than 50% is derived directly from private sector industrial partners. The sub-sections below begin by describing the broader complementary facilities and expertise available within the two commissioning universities, before detailing the more specific railrelated facilities available. 4.1. NATIONALLY RELEVANT COMPLEMENTARY RESEARCH CAPABILITY

At a high-level, both commissioning universities offer a broad set of research facilities and expertise that are highly complementary to more specific railway research, development and innovation.

4.1.1. Infrastructure, Digital and Data Analytics Research The University of Leeds is creating an innovative, collaborative space that will support world-leading interdisciplinary researchers in infrastructure materials, high-speed rail and robotics at its Infrastructure Innovation Park (IIP). The IIP will complement Nexus – the University’s centre for innovation and enterprise – to become the primary vehicle for delivering a step-change in how the University connects its internationally regarded research and expertise with business and industry. Construction at the IIP commenced in December 2019 where it will also be home to the Centre for Infrastructure Materials (CIM), the only centre of its kind in the UK – and one of very few in the world – with a field exposure site equipped with both full meteorological monitoring and environmental control to determine the long-term impact of our changing climate/ environment on a wide range of materials. The IIP will also incorporate the Engineering and Physical Sciences Research Council (EPSRC) supported National Facility for Innovative Robotic Systems which will extend the University’s nationally leading position in the physical creation of robotic systems, offering a purpose-built environment to stress test robotic systems; operating across the full range of infrastructure construction, inspection, maintenance, repair and demolition tasks. The University of Leeds also has a 200 strong academic contingent working within the Leeds Institute of Data Analytics and AI and is involved in a partnership with the Alan Turing Institute to lead

Universities of Huddersfield and Sheffield, and Newcastle and Lancaster Universities among the wider UKRRIN network which also includes the Universities of Birmingham, Bristol, Cambridge, Nottingham and Southampton, and Loughborough and Heriot Watt Universities

the Urban Analytics research theme. The novel data harvested from these facilities will enable the development of Digital Twins for mobility research – facilitating pairing of the virtual and physical worlds, allowing the analysis of data and monitoring of systems that anticipate future challenges faced by city infrastructure before they occur. These models are expected to prevent downtime, develop new opportunities for efficiencies and enable a proactive whole system approach to policy development, innovation and intervention. Nationally, the UK’s research and development activity in the field of Intelligent Mobility is facilitated by the Connected Places Catapult (CPC) which is located within the University’s Nexus Innovation Hub17. 4.1.2. Precision Technologies, Metrology and Precision Engineering Research The University of Huddersfield has an international reputation and capabilities in the enabling technologies (infra-technologies) which are driving the development of new manufacturing value chain systems including rail. Huddersfield has world-leading expertise in metrology, precision technologies, material science, logistics and supply chain development. The Centre for Precision Technologies (CPT)18 is a centre of excellence for collaborative metrology research, solving realworld manufacturing problems through cutting edge metrology research in precision engineering. The Future Metrology Research Hub19 is helping to transform the UK’s manufacturing performance by delivering significant improvements in the speed, accuracy and cost of measurement. With investment of over £40 million, the Hub is a key part of the UK Government’s research strategy to ensure that the UK becomes more competitive and productive. The Centre for Efficiency and Performance Engineering (CEPE)20 is recognised internationally as one of the world’s leading research centres in the fields of condition and performance monitoring and turbomachinery analysis and development. The University of

20 21 22

Huddersfield also has significant capabilities in Material Science, including advanced research facilities in characterisation and functionalisation of materials such as the multi-million pound EPSRC UK National Ion Beam Centre21 as well as leading specialism in technical textiles, and composites22. This complementary and wide-ranging expertise across the two universities makes them very well-placed to deliver major and complex multidisciplinary research projects. 4.2. DEEP RAIL RESEARCH CAPABILITY AND EXPERTISE

Beneath these strategically significant overarching research capabilities, the Universities of Huddersfield and Leeds both have deep rail-related research capability and expertise. Both universities have invested substantially in rail-related research and innovation facilities, knowledge, and knowledge transfer in recent years – a fact that has been recognised by industry representatives via this study. As a result of these investments, the two universities now host nationally and internationally significant rail research and innovation assets. 4.2.1. University of Huddersfield: Institute for Railway Research, UKRRIN Rolling Stock Centre of Excellence, and Centre for Innovation in Rail The Institute of Railway Research (IRR) at the University of Huddersfield is a world-leading centre of railway engineering research. The Institute has received substantial industry and research grant funding and recently won the prestigious Queen’s Anniversary Prize, for research and development (November 2019). At the start of 2019, the Centre of Excellence in Rolling Stock was officially launched at the Institute, sharing in £90 million of funding, distributed among three University rail research and innovation ‘Centres of Excellence’ that make up UKRRIN.

https://nexusleeds.co.uk/ https://research.hud.ac.uk/institutes-centres/cpt/ The Future Metrology Hub is part of the CPT and is led by Professor Dame Xiang Jiang http://fmh.hud.ac.uk/ https://research.hud.ac.uk/institutes-centres/cepe/ https://research.hud.ac.uk/institutes-centres/centres/ibc/ https://research.hud.ac.uk/institutes-centres/isiaip/ourcentres/technical-textiles/

18 19

RAIL INNOVATION ECO-SYSTEM

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

The IRR has 35 full-time researchers and carries out world-leading research in the areas of vehicle and track dynamics; traction, braking and energy systems; pantograph dynamics and overhead systems; advanced safety management systems; condition monitoring and analytics, and technology development and innovation. The IRR has applied it’s world-class vehicle/ track interaction expertise for a number of highspeed rail vehicle concepts, carrying out work for HS2 regarding track design performance and passenger comfort in high-speed curves. As a result of previous grants from both the Regional Growth Fund and HEFCE RPIF funding, and university investment, the IRR has developed a world-class £14m laboratory facility to support its core research areas, including: •

A full-scale, high-speed pantograph and overhead line dynamics test rig. In conjunction with real-time simulation software, the facility allows the assessment of new overhead line and pantograph systems at line speeds of up to 400km/h. Coupled with the IRR’s in-house software, work is underway with Network Rail and high-speed train manufacturers to reduce system failures and maintenance costs at both conventional and high speed.

•

Full-scale bogie rolling contact, adhesion and braking rig, unique in combining a large 2m diameter rotating rail drum, with the capability to test a complete bogie assembly under realistic wheel-rail contact and adhesion conditions. The test rig is supporting the rail industry in extending wheel and rail life, together with improving train braking performance in low adhesion conditions.

•

An advanced passenger comfort vehicle motion simulator; specifically designed and configured with a realistic railway vehicle interior and seating, together with motionqueuing algorithms developed to accurately recreate the specific vehicle body accelerations

that exist within a railway environment. Combined with the IRR’s extensive vehicle dynamics simulation capability, the test rig will support new and existing passenger comfort research with clients such as Network Rail and HS2. •

A full-scale braking, traction and energy systems test rig will bolster the IRR’s research capabilities through the addition of a contemporary AC power bogie, which will operate in conjunction with real-time simulation software, to explore how braking, traction and hybrid drivetrain systems can be designed and optimised for the railway of the future.

Huddersfield’s Centre for Innovation in Rail (CIR) has built upon the world-class research and development capabilities of the IRR to support the rail industry supply chain in bringing new technologies to the rail sector. The CIR works together with its key industry partners: Unipart Rail, RSSB and NSAR to offer specialist technology and business services, funding opportunities and routes to market for developed concepts. The centre also provides expertise in operational, service and innovation; management, business case development and wider disciplines including marketing and supply chain management. Lastly, the University of Huddersfield’s Institute of Railway Research has recently secured ERDF funding to develop a Smart Rolling Stock Maintenance Research Facility. Delivered through the Northern Powerhouse, the Programme will enhance current rolling stock capability and expertise and will seek to link regional businesses with UK and international rail supply chains to develop optimal technologies and processes to digitise and operationally streamline the rail industry; thereby helping to improve the cost efficiency and operational reliability of the railways. The new facility will also seek to stimulate interest in smart maintenance systems and techniques that regional SMEs can exploit.

RAIL INNOVATION ECO-SYSTEM

track systems. The VTF will allow worldleading research into new high-speed train braking, energy recovery systems and energy harvesting technologies, new materials, hydrogen fuel-cell and battery-powered systems and new digital sensors. The VTF will in the future accept rolling stock driven directly from the rail network; and

4.2.2. University of Leeds: Institute for HighSpeed Rail and Systems Integration, Institute for Transport Studies and Future Mobility Simulation Together with industry and central and local government, the University of Leeds is developing a new c.£80m state-of-the-art Institute for HighSpeed Rail and System Integration (IHSRSI). Located on the University’s IIP (a site to the east of Leeds within the Leeds Enterprise Zone and adjacent to the future location for the High Speed 2 rolling stock depot) the specialist large-scale research facilities at the IHSRSI are designed to support a novel whole system approach to nextgeneration high-speed rail encompassing, civil, mechanical, electrical and digital engineering design and passenger experience. The whole system approach allows the complete operational environment of the railway track and vehicles to be replicated within the IHSRSI. Technology can then be significantly de-risked within this whole system environment across the Technology Readiness Levels (TRLs), providing a high degree of assurance that new systems and vehicles will work first-time on the network. The facility is expected to play a key role in de-risking the delivery of major transport programmes across the UK and globally. The new Institute will comprise three inter-dependent testing facilities including an infrastructure test rig, a vehicle testing centre, and a centre for systems integration; allowing engineers to investigate rail systems as an integrated whole system. •

Infrastructure Test Facility (ITF): a fullscale 400 km/h capable high-speed rail infrastructure systems test facility that will be able to test full-scale railway track structures, including embankments, ground stabilisation technologies and preformed systems for conventional and high-speed railways.

•

Vehicle Test Facility (VTF): a full-scale highspeed 400 km/h capable vehicle systems test facility capable of testing full-scale rolling stock and their interaction with different

https://environment.leeds.ac.uk/transport-research

•

System Integration & Innovation Centre (SIIC): Tests on the VTF and ITF will be digitally linked into the SIIC. This will enable complete system-wide modelling of the entire railway environment within a controlled laboratory setting by digitally connecting the different track, vehicle and control systems.

When fully operational (anticipated late 2021 / early 2022), it is expected to foster closer collaboration between industry engineers and academics to tackle high-speed whole-system challenges; strengthen the UK rail industry as a global brand and create new, highly skilled jobs in the rail industry supply chain. The University of Leeds is also home to state-ofthe-art passenger experience and virtual reality future mobility simulation test facilities located within the Institute for Transport Studies23. With over 60 academic staff and 50 PhD researchers, the Institute for Transport Studies is a worldleading transport research centre supporting the development of autonomous systems and vehicles and intelligent mobility systems, including Virtuocity and the Highly Immersive Kinematic Experimental Research (HIKER) laboratory. Virtuocity brings together academics from across the University (Transport Studies, Geography, Psychology, Business, Civil Engineering, Law, Mechanical Engineering, and Computing) to create a multi-disciplinary centre for city modelling, simulation, virtual reality and co-design. Virtuocity is a unique programme for simulation and virtual prototyping of urban mobility and

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

urban dynamics solutions. The University is building an immersive urban environment capable of measuring realistic interactions between pedestrians, drivers and automated vehicles. This work has been underpinned by internationally renowned facilities at the University, such as the University of Leeds’ HIKER Lab which is the largest 4K resolution ‘CAVE-based’ pedestrian simulation environment in the world - allowing participants to interact with a variety of urban environments and vehicles in a 9m x 4m simulation space. Virtuocity has an extensive range of industrial collaborations, predominantly regarding the visualisation and impact of automated systems and future technology on mobility in cities. This research is already helping local authorities and urban planners design efficient, sustainable and vibrant cities for the future, and helping industry to design safer and more comfortable automated and conventional vehicles. ITS also leads the DecarboN824 network which seeks to bring together business, government and academia across the North of England to create an innovation ecosystem and testbed environment to trial and accelerate the adoption of low carbon transport solutions. University of York: Institute for Railway Studies The Institute of Railway Studies (IRS) is a longstanding joint initiative between the University of York and the National Railway Museum (NRM), York. Established in 1995, from a teaching perspective the IRS is predominantly focused on furthering scholarly activity within the sphere of railway history. However together, the IRS and the NRM recognise the considerable value contained within the NRM’s collection and archives and are committed to extracting greater value and impact from these resources.

University of Hull: Logistics Institute Established in 2008, the Logistics Institute at the University of Hull has established worldrenowned expertise in logistics and supply chain management research and education. The Institute’s focus is to drive sustainable growth through viable logistics and has delivered strategically significant projects for the UK’s rail industry, including the UK’s first digital rail infrastructure platform – designed to optimise freight route planning for Network Rail25. 4.2.3. Rail-Related Research Output Together, since 2014 the rail research institutes at the Universities of Huddersfield and Leeds have produced more than 1,800 research outputs within subject areas that are highly relevant to all aspects of the rail industry, from transport planning, policy and economics, to engineering, environmental science, physics, materials, and computer science among other subject areas. Field Weighted Citation Impact (FWCI) of these publications averages 1.44 (i.e. 44% above the expected global citation impact) and stretches to above 2 (two times more cited than average) in certain subject areas including energy engineering and power technology, fuel technology, transport planning, policy and economics. Combined and highly complementary university subject area expertise aligns well to the industry taxonomy developed to inform this study, with citation impacts at least 25% above average in subject areas such as: •

Materials science, acoustics and ultrasonics, instrumentation, and electronic, optical and magnetic materials (aligned to the sensing, measurement and remote monitoring segment);

•

Mechanical engineering, general engineering, civil and structural engineering, and building and construction (aligned to the construction taxonomy segment);

https://decarbon8.org.uk/about/

https://www.hull.ac.uk/work-with-us/research/institutes/logistics-institute/our-work/nr

RAIL INNOVATION ECO-SYSTEM

•

Information systems and management, general computer science, and software (aligned to the digital systems taxonomy category);

•

Industrial and manufacturing engineering, metals and alloys, polymers and plastics, ceramics and composites, and surfaces and interfaces (aligned to the rolling stock taxonomy category); and

•

Electrical and electronic engineering, and signal processing (aligned to signalling systems and electrification taxonomy segments).

At a lower level, analysis of research topics (available via SciVal)26 demonstrates further

complementarity between research expertise within the two universities and the local rail industry base. Based on analysis of c.100 relevant research topics (identified using text analytics) the collective expertise within the two universities is shown to align well with prominent industry segments including electrification, vehicle systems, track systems, components and maintenance, passenger operations, and optimised train planning and operations. Based on the analysis, the Universities of Huddersfield and Leeds are also producing research outputs in prominent rail-related areas including energy and propulsion and sensing, measurement and remote monitoring (Figure 4.1 below).

FIGURE 4.1 – RAIL-RELATED RESEARCH PROMINENCE 100 HIGH PROMINENCE, LOWER OUTPUT

HIGH OUTPUT, HIGH PROMINENCE

Energy & Propulsion FWCI: 1.47

AVG . P R O M I N E N C E P E R C E N T I L E

Sensing Measurement & Remote Monitoring FWCI: 1.53

Electriﬁcation FWCI: 2.03

Track Systems FWCI: 1.21

Passenger Operations FWCI: 1.53

Construction FWCI: 1.40

Optimised Train Planning & Operations FWCI: 1.42

Components & Maintenance FWCI: 1.16

Signalling Systems FWCI: 0.85

Vehicle Systems FWCI: 1.40

80 Engineering & Environmental Consultancy FWCI: 0.55

Real-Time Communications & Consultancy FWCI: 0.19

65 HIGH INPUT, LOW PROMINENCE

LOW INPUT, LOW PROMINENCE

60 0%

10%

11%

12%

13%

14%

15%

16%

% O F S C H O L A R LY I N P U T

Source: Scopus, Universities of Huddersfield and Leeds 26

Topics are collections of documents with common focused intellectual interest. They are compiled based on 95% of the articles available in Scopus, clustered into c.100,000 unique research topics. Topic prominence indicates the ‘momentum’ of particular research topics by calculating citation count and views count by papers published in the preceding two years, and average ‘citescore’. Topics can be analysed using text analytics, and the findings presented here are based on analysis of 101 topics containing relevant terms such as pantograph, catenary, railway vehicle, rolling noise, high-speed train, etc.

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

4.2.4. University Research Influence

Sensing, Measurement & Remote Monitoring

Deep academic expertise within the Universities of Huddersfield and Leeds is highly valued within the rail industry’s research and policy advisory spheres, and as such exerts considerable influence when it comes to technology development in industry segments including representation within:

•

Vehicle Systems •

RSSB Vehicle-Vehicle Systems Interface Committee;

•

RSSB Vehicle-Train Energy Systems Interface Committee;

•

RSSB Wheelset Management Group; and

•

Directorship, EPSRC Centre for Doctoral Training in Fluid Dynamics.

Track Systems •

Network Rail Track Stiffness Working Group;

•

RSSB Vehicle-Track Systems Interface Committee;

•

RSSB Vehicle-Track Systems Interface Committee - Technical Advisory Group;

•

British Standards Institute Railway Applications Engineering Committee (BSI RAE/1) - VehicleTrack Interaction Standards; The European Committee for Standardisation, Technical Committee 256, Working Group 10 (CEN TC25 WG10): Vehicle Track Interaction Standards; and UK Tram Light-Rail Engineers Group.

Digital Systems •

RSSB Data and Information Systems Interface Committee;

•

Turing Institute data science and artificial intelligence fellowship;

RSSB Cross-Industry Remote Condition Monitoring Steering Group

In addition to the Universities’ influence within rail industry research and technology development, senior representatives at both the University of Huddersfield and the University of Leeds hold strategically significant positions when it comes to rail sector economic development, innovation and transport policy. Rail Sector Economic Development, Innovation & Policy •

Northern Rail Industry Leaders Group;

•

Chair, Yorkshire Universities Industry Strategy Group;

•

Yorkshire Universities Executive Management Group member;

•

Member West Yorkshire Innovation Network (core group);

•

Business Innovation and Growth Panel, LCR Local Enterprise Partnership;

•

West Yorkshire Combined Authority Inclusive Growth and Public Policy Panel;

•

Director of the Leeds, York and North Yorkshire Chamber of Commerce;

•

Chair, Centre for Low Carbon Futures;

•

Chair, Sustainable Economy and Culture Board for Leeds City Council;

•

Former Royal Academy of Engineering Chair in Emerging Technologies (corrosion & tribology);

•

International Transportation Economics Association (ITEA) Executive Committee; and

•

Membership of three expert committees of the Transportation Research Board of the US National Academy of Sciences.

RAIL INNOVATION ECO-SYSTEM

4.3. LEADING EDGE RESEARCH COLLABORATION

The capability and research expertise outlined above can only be truly beneficial to the UK economy if it is effectively deployed in conjunction with the rail industry. Evidence provided to this study indicates that the research capability and expertise within the Universities of Leeds and Huddersfield is highly relevant to industry. The two universities have secured almost £100m in railrelated research income, of which 50% has come via partnerships with private sector rail industry companies. This section provides further evidence of the leading edge collaborative rail research being undertaken at Leeds and Huddersfield. Two hundred and twenty-one rail sector companies across the north have been involved in leading-edge (UKRI-funded) academic collaboration (identified via

Gateway to Research). Forty-two of those companies (19%) are dedicated rail industry companies and 179 (81%) are diversified rail supply companies. Publicly funded collaborative research activity undertaken by companies in the region spans all of the highest level taxonomy categories and 17 of the 19 sub-segments (all except smart ticketing and realtime communications within digital systems). Fortythree per cent of collaborative research has been undertaken by companies within the infrastructure category, with 23% in rolling stock, 14% in digital systems and 14% in energy and sustainability. Figure 4.2 below shows the proximity of companies involved in publicly funded research collaboration to regional universities, demonstrating obvious rail innovation clusters around the region’s academic institutions.

FIGURE 4.2 – COLLABORATIVE RESEARCH LANDSCAPE NEWCASTLE UNIVERSITY DURHAM UNIVERSITY: DEPT. ENGINEERING AND SUSTAINABLE INFRASTRUCTURE

NEW RAIL

CENTRE FOR PROCESS INNOVATION LANCASTER UNIVERSITY: SCHOOL OF COMPUTING AND COMMUNICATIONS

NATIONAL RAILWAY MUSEUM UNIVERSITY OF HUDDERSFIELD: INSTITUTE OF RAILWAY RESEARCH UNIVERSITY OF BRADFORD: FACULTY OF ENGINEERING AND INFORMATICS

UNIVERSITY OF YORK: INSTITUTE OF RAILWAY STUDIES UNIVERSITY OF LEEDS: INSTITUTE FOR HIGH SPEED RAIL AND SYSTEM INTEGRATION UNIVERSITY OF HULL: LOGISTICS INSTITUTE

UNIVERSITY OF SALFORD: AUTONOMOUS SYSTEMS & ADVANCED ROBOTICS RESEARCH CENTRE

LIVERPOOL JOHN MOORES UNIVERSITY: DEPT MECHANICAL ENGINEERING

DONCASTER COLLEGE SHEFFIELD HALLAM UNIVERSITY: DEPT ENGINEERING & MATHMEMATICS UNIVERSITY OF SHEFFIELD: RAIL INNOVATION & TECHNOLOGY CENTRE

Source: Universities of Huddersfield & Leeds, Gateway to Research, Perspective Economics

The examples illustrate some of the region’s leading-edge innovation activity across industry categories and segments including vehicle systems, components and maintenance and sensing, measurement and remote monitoring.

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

CASE STUDY:

FeTu Limited Head Office: Elland, Yorkshire & Humber

Project: Roticulating Air Compressor

Industry Category: Rolling Stock

Year: 2018

Segment: Vehicle Systems

Funder: Innovate UK, £314k

FeTu Limited has developed the FeTu ‘Roticulating’ system – a novel and potentially disruptive four-chamber ‘2 moving part’ mechanical device capable of low-loss energy conversion between volumetric and rotational energy sources. The FeTu system is a lightweight, compact, resilient, powerdense, unit; targeting drastic carbon reduction by surpassing the efficiency of the current state-of-the-art, engines, turbines, pumps, compressors and expanders. The FeTu system can simultaneously perform (up to triple ratio) compression and expansion functions and seemingly be able to run any thermodynamic cycle (open or closed-loop). A ‘positive displacement low-velocity turbine’, FeTu is a hybrid between a turbine and piston engine, combining the best of each into a simple, reliable, scalable, sumpless, unit; offering very linear, uniform and uninterrupted media flow.

The innovation is scalable, has 100% collapsing volume, zero turndown and is a true positive displacement concept. With only two moving parts, the technology is cheap to manufacture and low maintenance, demonstrating a strong return on investment. In this instance, the technology was tested oilfree. An analytical study on the effects of oil flood predicted a class-leading specific power of 5.5kW @ 7barg (1,500 rpm), from a range of machines 5kW and above. On the assumption of lossless porting and lossless sealing, FeTu can achieve 99.99% volumetric efficiency. With applications in rail, industrial sites, hydrogen stacks, electric buses and HGV’s, the FeTu compressor has cross-sector potential to deliver vehicle power efficiencies and carbon emissions reductions. The firm has secured £1.7m in equity funding and is valued at c£7m.

RAIL INNOVATION ECO-SYSTEM

CASE STUDY:

Feonic Technology Limited Head Office: Hull, Yorkshire & Humber

Project: Feonic Hybrid Powercell

Industry Category: Rolling Stock

Year: 2019

Segment: Components & Maintenance

Funder: Innovate UK, £100k

Feonic specialises in developing and miniaturisation powerful smart-material products and has been producing and selling a range of maintenancefree, solid-state audio devices for over ten years under worldwide patent protection. Laboratory results at Feonic showed that when the smartmaterial in one of these audio products is subjected to external vibrations, electrical energy is generated and can be harvested and stored in ultra or super-capacitors very efficiently. Unlike most mechanical vibration harvesting devices Feonic technology does not need to be tuned to specific resonant frequencies but harvests power over a wide frequency range. Following a number of documented rail accidents caused by failing train wheel bearings, there is a clear need to monitor the bearings temperatures to recognise and predict change and potential failure. The use of antiquated battery technology - with its need

for battery replacement every few years, is hampering the widespread deployment of wirelessly connected sensors in many markets. The Feonic project set out to produce a small, lightweight power generator that harvests and stores sufficient energy from the train’s mechanical vibrations to be used to create a maintenance-free autonomous power generator for wirelessly connected sensors for this and other markets. A Feonic Hybrid Powercell will harvest and store power from a wide range of vibration frequencies commonly found in transportation, rotating, and large machines in many different industrial fields. The power will be used to monitor and report numerous functions, for various IoT possibilities without maintenance support or battery replacement. Feonic has secured £1.2m in equity funding and is valued at £4m.

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

CASE STUDY:

Tribosonics Limited Head Office: Sheffield, Yorkshire & Humber

Project: Various (x 5)

Industry Category: Infrastructure

Year: 2011 – 2021

Segment: Sensing, Measurement & Remote Monitoring

Funder: Innovate UK, £280k

Tribosonics is a transformational technology business that uses unique sensing technologies to enable digital transformation, developing internet of things and Industry 4.0 devices across sectors, including the rail industry. Founded in Sheffield in 2006 the firm reinvest 25% of their annual revenues in R&D activities. The firm uses sensing technology to extract data on core measurement competencies such as stress, lubricant film thickness, wear, fluid properties, contact pressure and non-destructive testing to address wear, friction and lubrication associated challenges. Tribosonics has secured five Innovate UK awards since 2011 including: – 2011 – Feasibility of using a novel ultrasonic technique to detect scuffing in engines (£30k) – 2013 – Development of a novel adaptive machining control system

using an ultrasonic feedback loop (£23k) and development of software to monitor and reduce risk in hazardous industries (£79k) – 2020 – Characterisation of fluid properties using Tribosonic’s ultrasonic sensing technologies (£100k) and novel measurement of wear in polymer processing equipment (£50k). Tribosonic’s technology has multiple applications for the rail industry, including the application of sensory technology to monitor lubricant on pistons to ensure optimum conditions; the embedding of monitoring technology on rail components for quality assurance; the measurement of stress on existing engineering structures; the measurement of wheel wear and tear; and the measurement of contact pressure. The company remains privately owned.

RAIL INNOVATION ECO-SYSTEM

4.3.1. Scale of Rail-Related Research and Collaboration While Figure 4.2 (see page 44) shows regional clusters of academic-industry collaboration, the Universities of Huddersfield and Leeds obviously undertake rail-related research, and collaborative research with industry partners across the UK and beyond. Analysis of internal rail-related research income undertaken by both universities to inform this study identified almost £100m in research income obtained via more than 400 research projects. Of that income, approximately 50% comes by way of collaborative research with UK rail industry partners. Across the two universities, major funders include Network Rail, the RSSB, the Royal Academy of Engineering, the Department for Transport and the EU (Shift2Rail)27.

The internal analysis of rail research income is supported by analysis of publicly available (Gateway to Research) data, which records at least £75m secured by the two universities in research and innovation funding for rail-related projects28. Figure 4.3 below provides an analysis of railrelated research projects as they align to industry segments. It shows considerable funding secured in research related to sensing, measurement and remote monitoring, much of which has been secured since 2017, and significant levels of funding secured for research related to vehicle systems and signalling systems. The analysis also identifies complementary research strengths that could be drawn upon in future, including (for example) within automotive, aerospace, fluid dynamics, corrosion, and broader construction and civil engineering research areas.

FIGURE 4.3 – RAIL-RELATED RESEARCH FUNDING Sensing Measurement & Remote Monitoring

Vehicle and Track Systems

£35,825,865

£10,849,551

Optimised Train Planning & Operations

Energy & Sustainability £4,569, 553

£4,673,345

Signalling Systems £13,493,003

Components & Maintenance

Passenger Experience

£3,482,043

£2,223,801

Taxonomy: Construction Award Points: £999,102

Source: Gateway to Research, Perspective Economics

https://shift2rail.org/about-shift2rail/

Note that while not all funding identified here is exclusively for the benefit of the rail industry, it is all highly relevant to the rail industry. For example, the £35m funding aligned to sensing, measurement and remote monitoring includes a £10m award to the University of Huddersfield to establish the Future Advanced Metrology Hub. Data since 2005 is derived by filtering for Lead Research Organisation (only grants with UoH or UoL as lead) and by Funding Organisation (UKRI, EPSRC, ESRC, Innovate UK)

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

4.3.2. University Investment in Innovation Strategic consultations suggested that the last two to three years have been encouraging for rail innovation in the north, driven partly by HS2 and the new University of Leeds installation, but also more broadly by the Northern Powerhouse agenda. Further, there has been recognition via consultations with both strategic rail sector stakeholders and industry representatives alike that university “preparation for innovation in the north has been impressive – the right way around. Investment by both Universities of Leeds and Huddersfield has been forward-thinking and substantial.” Yet in order to enable industry to take full advantage of university investment there remains a need for greater certainty and action regarding major rail projects.

Getting contracts in place to allow money to flow is the thing that is preventing progress. Funding should stem from the Department of Transport, but getting everything lined up is the issue. University has done all it can, industry has to catch up. – STRATEGIC INDUSTRY STAKEHOLDER

Assuming certainty regarding major rail projects is forthcoming, then from a university perspective it will be important that a) revenue funding is secured to exploit capital investment, and b) that physical research infrastructure is effectively marketed, and applied for use in collaboration with industry.

University research has to be industry-led; new facilities can’t just be a nice bit of kit for research. [The universities] must get the right, joined-up marketing in place – targeting train leasing companies and other businesses, and start facilitating commercial application. – STRATEGIC RAIL SECTOR STAKEHOLDER

4.3.3. Wider Regional Innovation Eco-system Beyond the physical research assets and academic expertise set out above, Yorkshire and the Humber and the wider NP11 region benefits from an extensive network of rail-related research and innovation assets. Figure 4.4 (overleaf) provides an illustration of key assets that support rail innovation across the region: from colleges like Doncaster (home of the National College of High-Speed Rail) and Mayerscough (railway engineering apprenticeships); to various wider academic capabilities in Newcastle (New Rail Research Centre), Durham (Department of Engineering and Sustainable Infrastructure) and Sheffield (Rail Innovation & Technology Centre); and other government-funded research institutes with broader expertise that is highly relevant to the region’s rail industry, such as the Centre for Process Innovation and the National Physical Laboratory.

RAIL INNOVATION ECO-SYSTEM

FIGURE 4.4 – RAIL INNOVATION ECO-SYSTEM ASSETS

NORTH EAST PROCESS INDUSTRY CLUSTER (NEPIC) NATIONAL RAILWAY MUSEUM UNIVERSITY OF LEEDS: IHSRSI CONNECTED PLACES CATAPULT

NEWCASTLE UNIVERSITY NEW RAIL NORTHUMBRIA UNIVERSITY DURHAM UNIVERSITY: DEPT. ENGINEERING AND SUSTAINABLE INFRASTRUCTURE CENTRE FOR PROCESS INNOVATION

LANCASTER UNIVERSITY: SCHOOL OF COMPUTING AND COMMUNICATIONS UNIVERSITY OF BRADFORD: FACULTY OF ENGINEERING AND INFORMATICS MYERSCOUGH COLLEGE: RAILWAY ENGINEERING APPRENTICESHIPS UNIVERSITY OF HUDDERSFIELD: IRR-UKRRIN MANCHESTER MET: RAIL TECHNOLOGY UNIT UNIVERSITY OF SALFORD: AUTONOMOUS SYSTEMS & ADVANCED ROBOTICS RESEARCH CENTRE UNIVERSITY OF SHEFFIELD: RAIL INNOVATION & TECHNOLOGY CENTRE

Source: Perspective Economics

There are also overlaps between wider eco-system assets (such as the National Physical Laboratory) and, for example, the University of Huddersfield’s Future Metrology Hub (£40m research centre that seeks to deliver significant improvements in the speed and accuracy of measurement), and the Centre for Efficiency and Performance Engineering (leading research centre in the field of condition and performance monitoring).

OFFICE OF RAIL AND ROAD UNIVERSITY OF YORK: INSTITUTE OF RAILWAYS STUDIES

NETWORK RAIL

UNIVERSITY OF HULL: LOGISTICS INSTITUTE NETWORK RAIL DONCASTER COLLEGE: NATIONAL COLLEGE OF HIGH SPEED RAIL NATIONAL PHYSICAL LABORATORY (NPL) SHEFFIELD HALLAM UNIVERSITY: DEPT ENGINEERING AND MATHMEMATICS

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

CASE STUDY:

National Physical Laboratory NPL is a government-funded national body that specialises in metrology. It develops cutting-edge measurement capabilities that support the creation of measurement standards and state-of-the-art instrumentation.

Across its five sites it employs c.850 scientific and technical staff and c.200 PhD researchers. NPL publishes around 350 articles in peer-reviewed journals and performs around £30m of public research work each year. The laboratory provides services to an estimated 500 UK based companies each year, and its scientists collaborate on R&D projects with around 200 UK-based companies each year. Independent research undertaken in 2016 found that companies who use NPL services have higher survival rates and experience average employment growth of 20 employees within 2 to 4 years29. NPL’s site for the North of England is in Yorkshire & Humber, at the University of Huddersfield’s 3M Buckley Innovation Centre. The UoH site specialises in dimensional inspection and measurement of complex components and assemblies using a wide variety of tactile and noncontact equipment. The site offers a fast response service for difficult to measure components, and through its Industrial Internet of Things (IIoT) research is developing low-cost sensor-based

solutions to help manufacturers meet emerging demands for productivity within supply chains. NPL’s Manufacturer Measurement Network (MMN) provides easy access to knowledge transfer, networking and new technologies30. Measurement activity specifically relevant to the rail industry includes tunnel inspection (shape (profiling lasers), crack opening measurements (Digital Image Correlation / 3D-Digital Image Correlation), delamination (impact echo / Ground Penetrating Radar) water ingress (multi-sensor approach including thermography)); and Overhead Line Electrification power quality monitoring using custom high voltage and frequency equipment. In May 2020 the organisation appointed a new Strategic Business Development Manager with more than 20 years’ experience across various engineering disciplines within the UK’s rail transport sector, including almost a decade at Network Rail. This recent strategic appointment adds further weight to NPL’s role as a major rail industry asset in the North.

King, M. and Renedo, E. (2020) “A Net Present Value Assessment of NPL’s Support to UK Businesses”, National Physical Laboratory, 2020

https://www.npl.co.uk/manufacturer-measurement-network

4.4. FUTURE RAIL INDUSTRY INNOVATION PRIORITIES

Across the study research, contributors were asked to consider the future rail industry, and what the UK’s rail innovation priorities should be. When asked what the focus of current R&D activity has been, respondents to the industry survey frequently referenced activity under all five highlevel rail industry categories including for example: – Infrastructure related R&D: electrification systems, new rail infrastructure components including overhead line equipment, track safety systems, sensing and measurement (air, smoke and carbon dioxide movement solutions, temperature and pressure); – Rolling Stock related R&D: new rail vehicles, more efficient power components and textile innovation solutions; – Digital Systems R&D: various software and data analytics activities including app development, artificial intelligence, development of rail asset data schemas, industrial internet of things (IIoT) / machine to machine, and real-time dynamic information systems; – Energy & Sustainability related R&D: alternative fuels, clean air, fuel cells, fuel-saving devices and electrical modifications; – Customer Experience R&D: smart ticketing, decision science tools, use of real-time data to improve passenger information. These R&D activities align very closely to the UK-wide rail innovation agenda, which seeks to take advantage of the UK’s potential to be worldleading in advanced control; energy management; high-value rolling stock systems; whole life asset optimisation; and customer experience31.

Rail Supply Group (2016) “Fast Track to the Future”, Department for Transport, 2016

RAIL INNOVATION ECO-SYSTEM

There was considerable cross-over to responses from rail related academics, a majority of whom (when asked to state the top priority future rail research topics) referred to some combination of decarbonisation; infrastructure sensing, measurement and monitoring, and / or digitisation and data analytics. “The future of research is decarbonisation and alternative power. It’s the right thing to do environmentally, but also because much of the stock is getting old and won’t be replaced.” “Solar energy, active buildings, functional materials, batteries, thermal energy storage, off-grid, Electric Vehicle charging, renewable technologies, electrified heating, decarbonisation of energy, distributed energy systems.” 1. De-carbonising; 2. Network-level decision making using IoT, Big Data, fleet sourced data, AI and deep learning; and 3. Safety ratings based on real data rather than a conservative assessment of assets. “To improve significantly the techniques used for remote monitoring, control, information exchange/share and decision-making - making full use of the technological advancement in the scientific field.” “Energy infrastructure - decarbonising rail travel in remote areas where electrification through access to the grid is not feasible, integration of renewables, hybrid vehicles, extension of battery life, fast charging. Integration of transport system - ticketing for multiple transport modes, integration of timetabling. Real-time monitoring of rolling stock and track for optimised maintenance. Expansion of full-scale testing capability in the UK.” - Academic Survey Respondents

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

When brought together, these findings point to a) a clear alignment to future UK rail priorities (specifically those set out in the Rail Supply Group’s ‘Fast Track to the Future’ strategy) and to b) a joined-up industry and academic base when it comes to R&D activity and research priorities. Given these overlaps, it may be productive to explore where further industry/academia collaboration may be facilitated on this kind of thematic basis. 4.5. COLLABORATION AND NEW INNOVATION THINKING

The region’s academic expertise in rail is apparent and made more obvious still based on the latest research impact evidence produced by both the Universities of Leeds and Huddersfield. 4.5.1. Broadening Collaboration Nevertheless, both appetite and scope remain to further enhance academic collaboration of the sort shown between Leeds and Huddersfield in jointly commissioning this study, and with that, to derive more effective industry-academia collaboration. As one strategic stakeholder quite candidly put it “bureaucracy and silos still get in the way of really effective industry-academia collaboration. There are too many players not effectively joined up, and so the question is how can that be brought together under the Northern Powerhouse banner.”

Unlike big railway research institutes at Universities of Birmingham, Huddersfield, and Leeds for example, [academic survey respondent institution] is not usually on rail companies’ radar and so have missed a lot of collaboration opportunities with them. – ACADEMIC SURVEY RESPONDENT

It’s important to really map, understand and promote capability across the Northern Powerhouse region – we can’t operate in silos. – STRATEGIC RAIL SECTOR POLICY STAKEHOLDER

RAIL INNOVATION ECO-SYSTEM

Strategic interviews also suggested a need to think differently – more holistically – about future industry innovation requirements. This challenge was most precisely conveyed by one strategic industry stakeholder who commented:

[Major rail industry firm] is talking to us about the whole value chain – they want complete solutions, brake pads plus brake systems. They’re also wanting new technology. What they don’t need is another widget manufacturer. – STRATEGIC INDUSTRY STAKEHOLDER

This appetite from industry to procure more holistic innovative solutions supports the assertion that more can be done to raise awareness within industry of the breadth of collaborative research opportunities available via university engagement, and of the relative ease with which firms in all industry segments, and of all sizes can access these opportunities.

Other suggestions were also put forward in strategic stakeholder consultations about broadening innovation activity, linking R&D and innovation more closely to the needs of the network and wider rail industry, and taking a different, more holistic innovation systems view of R&D, for example: •

Collaborating with open access operators as test-beds for collaborative research

•

Reimagining the role and function of the National Railway Museum away from more archetypal museum roles towards a more immersive and innovation-oriented function linked (for example) to UKRRIN (taking Japanese railway museums as an example)

•

Creating a supply chain village/campus around OEMs.

A recently announced collaboration between two of the region’s innovative firms (Salamander Fabrications and Siemens Mobility) provides a useful illustration of the potential for academiaindustry-industry collaboration in the region.

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

CASE STUDY:

Research Enabled Industry-Industry Collaboration Companies: Salamander Fabrications | Siemens Mobility Collaborative Research Institute: Manufacturing Technology Centre

Sheet metal firm Salamander Fabrications has teamed up with Siemens Mobility and the Manufacturing Technology Centre (MTC) to fully digitise its operations. The project is expected to enable Salamander to take enquiries from key customers like Siemens Mobility – in the form of computer-aided designs – and import them straight into its automated machinery.

Smart machinery will then determine which relevant materials are required, and how long the project will take, leading to less metal waste and a more efficiently manufactured, high-quality product. Salamander will also have the capability to track production progress and update customers in real-time. As well as helping to reduce the company’s carbon footprint, the Huddersfield-based manufacturer expects to further streamline its service for key customers.

Being able to provide customers with the reassurance that their high-quality products will be completed with shorter lead times will go a long way towards our growth ambitions of doubling our turnover to £10m by 2023. – SALAMANDER FABRICATIONS REPRESENTATIVE

RAIL INNOVATION ECO-SYSTEM

4.5.2. Network Relevant Innovation Funding There are also, however, sustained calls among industry and academic stakeholders for a more radical approach to R&D and innovation, facilitated by academic institutions and regional economic development bodies, and enabled by the Department for Transport and Network Rail.

I don’t think the UK is at the forefront of the international rail industry. This is partly because we rely on antiquated infrastructure and the bureaucracy associated with making change is often suffocating. – ACADEMIC SURVEY RESPONDENT

Analysis of research data shows that Network Rail is involved in on average c.£16m of research activity annually, and an average of 10 research projects per year (175 in total since 2005)32. While UKRI data is clearly not reflective of all R&D and innovation activity that takes place, it does provide a useful indication of funding trends. The data suggests (encouragingly) that the overall trend in both number of awards and award values are increasing over time. If the UK is to achieve its rail innovation industrial potential this trend will have to continue. There is, however, some variability in the level of R&D activity, with the number of research projects ranging from 5 (2008) to fifteen (2018), and annual award values ranging from less than £10m (2005 – 2008, 2010, 2015) to more than £50m (2014, 2019).

Nevertheless, Network Rail clearly fund significant amounts of research through its Research and Development Programme, comprising Shift2Rail and UK Delivery among others. Between 2019 and 2024, Network Rail will administer a budget of c.£245m via its key R&D programmes33, including an estimated c.£20m within academia alone. A small number of consultees suggested that larger funding calls do not remain close enough to Network Rail to effectively convey the network’s R&D and innovation needs, and therefore maximise the value of collaborative R&D. However, there are also examples of where R&D and innovation activity remains very close to Network Rail, for example consultation with Network Rail Telecoms (a business unit currently involved in a high degree of research and innovation activity) and WYCA’s Head of Strategic Networks highlighted immediate opportunities for using the West Yorkshire Fibre Rail Project (WYFRP) as a test-bed for use by digital rail businesses to design and test innovative new solutions. WYFRP is a large scale infrastructure project that will deliver high count ‘432’ fibre cable across 270 km of rail network in West Yorkshire. Providing hand over locations at every train station that can enable further full-fibre services, Gigabit-capable broadband connectivity and the ability to deliver a regionwide connected passenger experience including home to office ubiquitous connectivity, real-time travel information and shared connected transport systems to enable seamless transfer between services (rail, bus, tram and foot) across the region. The project is aligned to the Department for Digital Culture Media and Sport (DCMS) funded TransPennine Fibre Initiative which delivered fibre between Manchester, Leeds and York giving West Yorkshire the first fully Connected Rail network in the UK.

UK Research & Innovation grant award values assigned to Network Rail under five organisation headings – Network Rail Infrastructure Limited, Network Rail Infrastructure Ltd., Network Rail Limited, Network Rail Ltd., and Network Rail Ltd London

Rail Sector Deal

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

Through a combination of this data, and strategic stakeholder consultations, the research highlights immediate opportunities for major infrastructure projects to boost digital rail innovation activity, but it also points to a need for a) sustained and consistent investment in R&D to address wider rail innovation potential highlighted via this study, and b) a funding mechanism which ensures that network-relevant innovation priorities are effectively addressed, and are effectively aligned to industry R&D and innovation, and academic expertise.

There are lots of good companies involved in lots of good innovation activity, but they can’t get it to market quickly enough. The advantage of AMRC is that industry goes to them to get their problem solved rather than the other way around. There you have Boeing, Airbus and Rolls sitting in a room asking AMRC to solve their problems.

To this end, it may be useful to explore the feasibility of co-ordinating relevant funding streams and committing to more Knowledge Transfer Partnerships as part of a regional rail industry innovation hub. Such a hub could seek to provide for the rail industry what the Advanced Manufacturing Research Centre in Sheffield does for the aerospace industry.

– STRATEGIC RAIL SECTOR STAKEHOLDER

FIGURE 4.5 – UKRI FUNDED NETWORK RAIL R&D 3

2005

2006

2007

2008

2009

2010

2011 2012

20 13

2013

2014

2015

2016

2017

2018

2019

2020 £0

MEDIAN - £15,835,717

£20,000,000

£40,000,000

£60,000,000

5. Rail Innovation Skills

RAIL INNOVATION ECO-SYSTEM

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

The study accessed data regarding job posts made over the last 12 months by some of the region’s most significant and innovative companies. The data evidence clear demand for engineering skills, closely linked to activity within ‘vehicle systems’, ‘energy and propulsion’ and ‘digitally optimised train planning and operations’ taxonomy segments. A total of 810 job posts were identified across a sample of companies highlighted in Section 4.234. Figure 5.1 (overleaf) provides an illustration of the job roles in highest demand across all rail industry taxonomy segments. More than fifty per cent of all advertised job roles required engineers, which fits closely with strong sentiment returned within both the online industry survey and strategic stakeholder interviews. As one strategic stakeholder commented:

Students come out tied to computers these days, they’re much more computer-oriented. There aren’t enough people who know what to do with a spanner; get underneath things and do stuff – that’s not seen as attractive. There is an older engineering population now – we need people to get in amongst the oil as well as the computer programmers.

There was broad consensus among strategic stakeholders that the region is very well positioned to meet future rail industry skills needs, with genuinely niche expertise within the region’s Universities, and similarly positive skills development initiatives across the skills pipeline.

Doncaster College is a good initiative; Hitachi in Newton Aycliffe is a really positive development. Doncaster is cementing its position as a centre for rail industry skills development. Hull University has a particular focus on operational performance, like how we can get things back up and running when things go wrong via a new software development project, or when overhead lines fall over, having software that monitors all of the information about delay and getting the system back up and running – that could be game-changing. – STRATEGIC RAIL SECTOR STAKEHOLDERS

– STRATEGIC RAIL SECTOR STAKEHOLDER

All 35 companies were included in the search, 10 of the 35 had job posts recorded on Burning Glass recruitment data platform

Over the past 12 months, significant numbers of jobs have been posted by Alstom UK, Hitachi Rail, and ABB, with top job titles including:

RAIL INNOVATION ECO-SYSTEM

FIGURE 5.1 – INNOVATION SKILLS NEEDS JOB TITLE Software Development Engineer

– Industrial Engineers

Engineering Manager

– Engineering Managers

Sales Specialist

Engineering Technician

Systems Engineer

Accounts Manager

Senior Systems Engineer

Quality Engineer

Project Manager

Process Engineer

Industrial Engineer

Contract Manager

Support Engineer

Applications Engineer

Mechanical Engineer

Mechanical Design Engineer

Maintenance Engineer

Inspection Engineer

Communications Manager

Business Development Executive

Application Technician

Supply Chain Graduate

Software Engineer

Sales Manager

Sales Engineer

Safety Manager

Production Manager

Product Compliance Consultant

Planner

Hardware Engineer

Field Service Engineer

Electronics Engineer

Buyer

Area Sales Manager

Apprentice

Accountant

– Application & Engineering Technicians – Process Engineers – Support Engineers – Systems Engineers – Quality Engineers – Signalling Business Apprentices. In addition to these technical engineering roles companies are also looking for people in IT, software development and analytics roles, with job post titles including: – Software Development Engineer – Business Analyst – IT Infrastructure Engineer. People with software development, IT and analytics skills are also sought by companies such as Commescope (Software Engineers), Nomad Digital (Linux Systems Administrator, Systems Administrator, IT and Business Systems Apprentice and 3 Squared (Software Development Engineers, Business Analysts, Graphic Designers).

Source: Burning Glass

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

From a wider industry perspective, the industry survey asked, “if you could access any technical specialism to support your firm’s R&D and innovation activity, what would it be and why?” Responses frequently referred to the same engineering and software development/analytics needs, as well as a broader ambition to do more R&D and innovation activity in-house. Qualitative responses included: Engineering-related R&D requirements – Electrified Rail OLE – Electrical and SAE professionals – Specialist product management and project engineering capability, people with the capability to develop the end to end innovation cycle – Engineering acceptance and design. Software and data analytics-related R&D requirements – Mobile app development – Signalling data and routes to speed up algorithm production and system configuration – Better data analytics in-house would be very useful. Access to test facilities and in-house capability – Access to specialist testing facilities that we do not yet have in-house – Testing facilities as we do not have in house capability at present – To be able to do our own in house calculations and testing rather than using overseas companies.

5.2 SKILLS TRANSFER

Strategic stakeholder interviews and academic survey responses suggested scope for increased fluidity of movement between academia and industry, particularly when it comes to engineering skills, but equally applicable to digital and data science skills. As one strategic stakeholder put it: “We need research engineers in companies because they understand what researchers are capable of – otherwise what happens is you have nonresearch engineers setting up incorrect problem statements.” Enabling more fluid movement of research engineers, and similarly software engineers and data science researchers between academia and industry on a structured basis should, over time, serve to raise awareness within industry of the potential for collaborating with universities and make it easier to collaborate.

RAIL INNOVATION ECO-SYSTEM

6. Conclusions and Actions

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

The study has demonstrated the considerable railway research and innovation capability that exists within the Universities of Leeds and Huddersfield, and across the wider NP11 region. The research activity undertaken across the two commissioning universities is industrially-led, with more than half of all research funded via industrial partnerships. The study has also highlighted the high degree of complementarity between industrial and academic capacity and capability across the Yorkshire and Humber region, and the extensive investment made by the two universities, and by industry, in rail research and innovation activity. Together these factors offer a compelling case for further investment in the region’s rail research and innovation activity as a driver of economic recovery and longer-term industrial advancement and economic growth. Based on the research, a series of lower-level conclusions and proposed actions can be drawn under five themes, namely: 1. Industrial policy and economic development 2. Regional rail innovation profile and positioning 3. Rail innovation research and funding 4. Human capital and skills 5. COVID-related issues and response. The sub-sections that follow set out each conclusion in turn, and subsequently list proposed actions associated with each theme.

6.1. INDUSTRIAL POLICY AND ECONOMIC DEVELOPMENT

The study has demonstrated the significance of the rail industry to Leeds City Region, Yorkshire and Humber and the wider NP11 region, and equally the significance of the region to the UK rail industry. As a result, there is potential for the industry to deliver a range of industrial and economic impacts in the coming years. 6.1.1. Making ‘Levelling-Up’ A Reality The rail industry is a major economic driver in Yorkshire & Humber and the wider NP11 region. More than 1,100 companies have been identified across more than 170 SIC codes generating known revenues of c.£40bn to the UK economy (2018). Almost 900 of the companies identified (c.80%) are SMEs. In employment terms, Yorkshire and the Humber accounts for c.12% of all UK employment in rail (analysis excludes London) – on a par with the North West (also 12%) and behind only the South East (16% of related employment). Translating these absolute employment figures into location quotients demonstrates the degree of specialisation within Yorkshire and the Humber, and the significance of the industry to the region. Based on comparative BRES SIC code data, Yorkshire and Humber has a LQ of 1.46 compared to, for example, Location Quotients of 1.39 in the East Midlands, and 1.15 in the West Midlands.

The study has also demonstrated, through a combination of strategic stakeholder interviews and survey findings, that inherent (and in many respects justified) risk aversion within the industry has left notable opportunity to further leverage the economic benefits associated with industrial research and innovation. To some extent, the rail industry is still ‘playing catch-up’ when it comes to fully leveraging the economic benefits of research and innovation. The Yorkshire and Humber, and wider NP11 region has everything it needs to be a driver of rail industry research and innovation, and associated economic benefit – a business base with growth and innovation ambitions, academic expertise, research and innovation facilities, networks, and a supportive and ambitious public sector. As such, the rail industry should be recognised as one that can make a significant contribution to making the UK’s levelling up agenda a reality. 6.1.2. Driving the Local Enterprise Partnership Network’s 5-Point Recovery Plan The study has demonstrated that the rail industry in Yorkshire and the Humber and wider NP11 is a nationally and regionally significant place-based industry, which supports an extensive supply chain. In this respect, it can make a substantive contribution to Point 1 within the 5-point plan, namely using LEP recovery plans for a ‘ground-up’ recovery. Similarly, the rail industry will be required to support major infrastructure projects that can act as a catalyst of economic recovery – which aligns well with Point 2 of the LEP plan regarding ‘doubling down’ on capital projects and fiscal tools. Further, there is significant scope for the rail industry to drive the green growth agenda - 40%

Rail Supply Group (2016) “Fast Track to the Future”, Department for Transport, 2016

RAIL INNOVATION ECO-SYSTEM

of innovating firms identified are involved in industry segments that will contribute to green growth, including in terms of alternative energy and propulsion, construction, electrification systems, engineering and environmental consultancy and vehicle systems. These companies have successfully leveraged private sector investment of c.£50m since 2014. The rail industry therefore also presents a very tangible opportunity to deliver against Point 4 of the LEP Network’s 5-Point Plan by helping to accelerate green growth innovation. 6.1.3. Contributing to the UK’s Wider Rail Innovation Ambitions The study has demonstrated how the research, development and innovation activity in Yorkshire and the Humber and the wider NP11 region is aligned with and can contribute to delivering the UK’s wider rail industry ambitions. When asked to outline the focus of current R&D activity, the region’s rail industry representatives frequently referenced activity regarding infrastructure (electrification, rail infrastructure components, sensing and measurement etc.); rolling stock (new rail vehicles, more efficient power components and textile innovations); digital systems (app development, artificial intelligence, rail asset data schemas, industrial internet of things etc.); and energy and sustainability (alternative fuels, clean air, fuel cells, fuel-saving devices etc.); and customer experience (smart ticketing, decision science tools, and use of real-time data for improved passenger experience). These R&D activities align very closely to the UK-wide rail innovation agenda, which seeks to take advantage of the UK’s potential to be worldleading in advanced control; energy management; high-value rolling stock systems; whole life asset optimisation; and customer experience35.

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

This overlap between the ongoing research, development and innovation activity among rail industry companies in the region, and the UK’s wider rail innovation ambitions highlights the scope for firms in Yorkshire and the Humber and wider NP11 to make a tangible contribution to achieving those ambitions.

6.1.5. Actions

Increase in supply chain businesses vis-à-vis dedicated rail industry businesses, emphasising the importance of ensuring innovation activity remains effectively linked to needs of the network and dedicated rail industry.

2. In respect of helping to deliver the LEP Network’s 5-Point Plan: work collaboratively with NP11 LEPs to identify rail specific projects and investment that specifically targets the economic potential associated with rail industry innovation.

6.1.4. Attracting Further Rail-Related FDI

3. To help realise the UK’s wider rail innovation ambitions: provide a platform for regional SMEs that helps put them at the forefront of these UK ambitions e.g. via a regional rail innovation industry taskforce, or via closer cooperation with existing mechanism e.g. KTN sponsored/led regional innovation events. Organise demonstrations that showcase alignment between UK ambitions and regional innovation activity.

In July of this year Siemens Mobility started construction on the first phase of its £200m manufacturing facility in Goole, East Yorkshire. The investment will see Siemens develop a new train manufacturing plant and rail supply-chain village that will build new London Underground Piccadilly Line tube and future mainline trains. The new facility is expected to create up to 700 skilled jobs in engineering and manufacturing and has the potential to create a further 1,700 indirect jobs throughout the UK supply chain36. The first phase of manufacturing facilities is expected to open in 2023. The Siemens investment demonstrates the potential that the region has for securing major railrelated FDI projects, and together the region now boasts significant industrial and academic expertise across the complementary automotive, aerospace and rail sectors. These investments, coupled with the evidence presented in this report regarding the region’s rail industry strengths and research expertise, should serve to drive further rail-related FDI into the wider Yorkshire and Humber and NP11 regions.

https://new.siemens.com/uk/en/company/about/goole.html

1. In order to realise the rail industry’s potential to help make ‘levelling up’ a reality: echo the Rail Supply Group’s call to mobilise the Rail Sector Deal and let the rail industry in Yorkshire and the Humber and wider NP11 be a catalyst for levelling up.

4. In terms of acting as a catalyst for further Foreign Direct Investment: with industry, key sector stakeholders, regional economic development bodies and the Department for International Trade be a central coordinating function for research into and identification of rail-related inward investment opportunities aligned to industrial and research specialisms set out in this report.

6.2. REGIONAL RAIL RESEARCH AND INNOVATION PROFILE AND POSITIONING

The study demonstrates the considerable experience, expertise and influence within the two commissioning universities, and more broadly across academic and wide innovation eco-system assets across NP11. 6.2.1. Bringing Expertise to Bear Most Effectively There are opportunities to ensure that the research and innovation expertise within the region is most effectively leveraged to benefit the regionâ&#x20AC;&#x2122;s rail industry. On balance of rail research and innovation expertise, the Universities of Huddersfield and Leeds should be pivotal in maximising the research, innovation and economic benefits of the rail industry for the north. A joined-up approach by the two universities could lever significant benefit for LCR, Yorkshire and the Humber (with York, Hull, Doncaster College) and the wider NP11 region (with Manchester, Lancaster, Newcastle). 6.2.2. Expanding Industrially Relevant Collaborative Research and Innovation Activity The study highlights the extent to which existing facilities and expertise are industrially relevant, with more than half of all rail research income being derived from private sector industry partners. It highlights immediate opportunities through major infrastructure projects (such as the West Yorkshire Rail Fibre Project) to boost rail research and innovation activity in the region. It also recognises the extensive investment that has been made in research and innovation facilities over the past 5 years by both universities. On this basis there has been recognition that the onus is now on industry (enabled via policy and nationally significant rail infrastructure projects) to make the most effective use of the facilities for industrial and economic gain. Nevertheless, the study also conveys clear sentiment from industry that these facilities must be

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effectively promoted and positioned to enable both fundamental and collaborative research. Similarly, the study points to further opportunity for raising awareness regarding the breadth of research and innovation services (including for example KTPs) available via university engagement. 6.2.3. Actions 5. To help ensure that the regionâ&#x20AC;&#x2122;s rail research and innovation experience and expertise is most effectively brought to bear: engage now in a committed strategic planning exercise which: - in the immediate term, effectively joins up university expertise in a structured, coordinated manner (via for example a dedicated, co-funded central function for monitoring rail-related policy, events and funding opportunities) - lays the foundations for securing future regional and national funding that effectively leverages regional expertise for the longerterm. 6. In terms of maximising immediate research and innovation opportunities: work with Network Rail Telecoms and the West Yorkshire Rail Fibre Project to identify practical mechanisms through which innovative regional rail business can access new high capacity fibre to design and test new innovative digital rail solutions. 7. With respect to extending industrially relevant collaborative research and innovation activity, there is an onus on the commissioning universities and their funders to identify and earmark additional investment that can expand upon the proven collaborative research track record. Effectively marketing combined research and innovation facilities and resources will assist with the expansion of collaborative research and to that end, the commissioning universities should agree a joint plan for effectively marketing rail research and innovation

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

facilities and services. This may be part of existing mechanisms e.g. NP Rail, Northern Rail Industry Leaders, YORIC, but should be led by a co-ordinated and dedicated rail research and innovation University team. 6.3. RAIL INNOVATION RESEARCH AND FUNDING

The study has emphasised the collective appetite among academia and industry to drive research, industry and economic benefits from rail innovation activity. The two universities, as part of a coordinated and genuinely collaborative regional network for research and innovation activity, can play an important role in supporting future rail innovation research and funding. 6.3.1. Being a Catalyst for Rail Research and Innovation Two hundred and twenty-one rail sector companies across the north have been involved in leading-edge (UKRI-funded) academic collaboration. The study highlights clusters of innovative firms around universities involved in rail research, development and innovation. It also highlights current and planned collaboration between the Universities of Leeds and Huddersfield and regional rail sector SMEs, and an ambition among regional SMEs to drive rail research and innovation activity. It provides examples of alternative pathways to innovation taken by companies in different industry segments, and with different demographics – from disruptive start-ups using equity investment to more established firms and more incremental increases in research and innovation activity. Considerable opportunity exists to build rail research and innovation momentum around this existing SME engagement, and the research, development and innovation ambitions of regional rail SMEs.

6.3.2. Effectively Positioning Research and Innovation Facilities As outlined above, the study highlights the extent of capital investment made by the commissioning universities in world-leading research facilities. The academic base of expertise exists, and the region demonstrates particular industrial and research strengths in-vehicle systems, components, sensing measurement and remote monitoring, digital optimisation of train planning and operations, track systems, energy and propulsion and electrification and signalling systems. However, in order to maximise industry and economic benefit from these capital investments will also require sufficient revenue funding to be secured for non-academic functions. 6.3.3. Broadening Collaborative Research and Innovation Activity The study highlights already notable levels of existing collaboration between academia and industry – via both collaborative research data from Gateway to Research, and internal university research income. It also demonstrates how the commissioning universities are already thinking in whole-system terms, through for example the IHSRSI’s focus on whole-system high-speed solutions. However, it also flags a call from industry to bring together industrial capability that can deliver innovative ‘whole-systems’ solutions more broadly. “[Major rail industry firm] is talking to us about the whole value chain – they want complete solutions, brake pads plus brake systems. They’re also wanting new technology. What they don’t need is another widget manufacturer”. Given this call from industry, and the changing shape of the industry – with fewer ‘dedicated’ and increasing ‘supply chain’ rail industry companies – it will be increasingly important to further broaden collaborative research and innovation activity so

that rail industry innovation requirements continue to be offered appropriate priority among supplychain firms, and so that a more towards complete innovation solutions can be facilitated. 6.3.4. Actions 8. To assist in catalysing rail research and innovation: establish a central coordinating function that can effectively support specialist regional SMEs in related disciplines (such as engineering) to diversify into the rail industry and access rail-related contracts with Tier 1 suppliers, and engage the innovative SMEs identified through this research to form a regional rail innovation industry taskforce. The taskforce (linked to a central coordinating function between the two universities) could plan a series of events that showcase regional rail innovation and give a clearer voice to highly innovative SMEs. Events could also target equity investors and or more innovation-oriented larger corporates to encourage three-way academic-industry-industry collaboration. Again, this should be undertaken within existing mechanisms if / where possible. 9. To assist in effectively positioning research and innovation facilities so that industrial and economic benefits are maximised: within a central university mechanism responsible for collating sector intelligence, and coordinating research and innovation activity, set a specific objective associated with identifying sources of revenue funding. 10. To broaden collaborative research activity and effectively meet the research and innovation needs of rail industry companies in future: facilitate broader collaborative partnerships between multiple firms (e.g. large corporate and two or three SMEs with complementary capability) and academic partners. In the first instance, this kind of broader collaborative research and innovation could be delivered via a rail innovation supply chain campus event.

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6.4. HUMAN CAPITAL AND SKILLS

Through a combination of stakeholder interviews, survey findings and secondary data, the study has provided some insight into the skills that are required to support rail innovation activity in future. With appropriate support, the regional rail ecosystem in Yorkshire and the Humber and wider NP11 is well placed to meet these future rail industry skills needs. 6.4.1. Meeting Demand for Engineering, IT and Software Development Skills Based on quantitative data regarding in-demand roles among some of the region’s most significant and innovative companies, the study evidences clear demand for engineering, IT and software development skills. More than fifty per cent of all advertised job roles required engineers, which fits closely with strong sentiment returned within both the online industry survey and strategic stakeholder interviews. “Students come out tied to computers these days, they’re much more computer-oriented. There aren’t enough people who know what to do with a spanner; get underneath things and do stuff – that’s not seen as attractive. There is an older engineering population now – we need people to get in amongst the oil as well as the computer programmers.” There was broad consensus among strategic stakeholders that the region is very well positioned to meet future rail industry skills needs, with genuinely niche expertise and a heavy concentration of engineering education and skills within the region’s Universities, and similarly positive skills development initiatives across the skills pipeline including within Doncaster and Mayerscough Colleges.

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

6.4.2. Supporting Skills Transfer Between Academia and Industry Linked to the strong sentiment regarding future engineering skills needs, a specific requirement has been highlighted regarding supporting skills transfer between academia and industry. Strategic stakeholder interviews and academic survey responses suggested scope for increased fluidity of movement between academia and industry, particularly when it comes to engineering skills, but equally applicable to digital and data science skills. As one strategic stakeholder put it: “We need research engineers in companies because they understand what researchers are capable of – otherwise what happens is you have nonresearch engineers setting up incorrect problem statements.” Enabling more fluid movement of research engineers, and similarly software engineers and data science researchers between academia and industry on a structured basis should, over time, serve to increase collaborative research productivity, while also raising awareness within industry of the potential for collaborating with universities. 6.4.3. Reimagining the Role of Unique Eco-System Assets Consultation with strategic stakeholders highlighted the region’s unique railway history and the eco-system assets that are consequently located within Leeds City Region. In addition to the shorter-term and much more ‘standard’ skills development and skills transfer actions set out in this section, strategic stakeholders highlighted an opportunity to reimagine the role of the National Railway Museum. As a unique regional asset, the museum can play an increasingly substantive role in communicating a futuristic vision for the UK’s rail industry, inspiring young people to explore education and longer-term career opportunities

that will be required within the future rail system, and contributing to fostering a culture of rail innovation regionally and nationally. 6.4.4. Actions 11. To effectively meet the demand for future rail industry engineering, IT and software development skills needs: secure funding to expand KTP and degree apprenticeship activity, and ensure that effective mechanisms are in place to bring together rail specific education and skills activity across Yorkshire and the Humber and the wider NP11 region, including through the National Skills Academy for Rail. 12. To facilitate more fluid transfer of skills between academia and industry: secure funding for placements and internships that substantively increases the volume of research engineers within innovation active companies. Note that this skills transfer is equally applicable to computer science/software development/data analytics researchers. 13. In respect of reimagining the role of unique eco-system assets: consult with the National Railway Museum to understand strategic plans and how the museum can be effectively integrated into regional rail innovation activity in future. 6.5. COVID-RELATED ISSUES AND RESPONSE

The study has highlighted the significant effect that COVID-19 is expected to have on the regions rail industry in the short to medium term. Findings point to a range of risks, as well as to potential mitigating actions and future opportunities.

6.5.1. Safeguarding Innovation Through COVID Recent research by the Rail Supply Group (RSG) into the impact of COVID-19 on the UK rail industry highlighted the need for swift action from the UK government to manage the impact of the pandemic and confirmed the importance of accelerating mobilisation of the Rail Sector Deal37. Both the scale of the economic challenge facing the industry and the acute need for government intervention were reiterated in responses to our online industry survey. Crucially, the study research also identified specific risks to innovation activity which, if the industrial and economic benefits described in Section 6.1 are to be realised, must be effectively and urgently addressed. “A number of projects expected to be let in early 2020 have been delayed, which means that the market deployment of our innovate systems will not have progressed and matured as we enter our next FY, thus reducing the possibility of rolling out systems at scale. Spending is almost certainly reduced and even cut from budgets during COVID-19 and it will take some time before operators commit to spending again.”

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agreements’. In the short time since the new measures were put in place there has been much public debate about their benefit (or otherwise) to the rail industry. What is certain is that the chaos caused by COVID-19 to the UK’s current rail delivery model requires a major re-think that looks beyond the necessarily reactive measures taken to date. 6.5.3. Leveraging Rail Industry Specific Strengths to Aid Economic Recovery Despite the unquestionable challenges that COVID brings to the rail industry, study research also highlighted the important role that the rail industry, and in particular rail infrastructure should play in mitigating economic challenges. Industry respondents highlighted the degree to which the rail sector can be a stabilising force for the economy – required to facilitate nationally critical infrastructure and longer-term transportation needs. •

“National requirement for rail plant to meet the demand in rail construction and maintenance over the next 5 years to replace old machines”.

“Brexit has been a disaster for the company. We have been struggling with lost contracts due to this. We were investing in AI activities, but COVID-19 has hit is at the wrong time.”

•

“Fortunately, the infrastructure for both rail and the electricity supply industry requires maintenance and investment which shouldn’t be affected too much by the COVID situation”.

“Inspection and Non-Destructive Testing (NDT) development requires integration with supporting systems, this activity requires working in person with others which has been restricted recently.”

•

“We serve a continuing and nationally important societal infrastructure so we will continue to grow, but the rate of activity has slowed due to the reduction in capital available to our customers.”

6.5.2. Better Understanding the Future of UK Rail Post-Pandemic In the period since the study research was conducted the extent of the challenge posed by the pandemic has heightened and government has intervened via emergency measures agreements and more recently ‘emergency recovery measures

Therefore, while the economic picture is one of significant challenge, the rail industry also has the potential to be a stabilising force. There is a clear opportunity for sustained economic activity in critical industry categories (particularly within infrastructure and rolling stock), and associated innovation activity in respect of, for example,

Rail Supply Group, 2020 “Act Now: The Rail Supply Group Task Force Coronavirus (COVID-19) Response”, July 2020

UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

remote condition monitoring, new products with lower environmental and / or downtime impacts, and decarbonisation of wider infrastructure and rolling stock. However, it is also important that any economic recovery policy serves the dual functions of stability (driven by larger corporates and longterm contracts) and stimulating growth (driven by innovation and smaller companies). 6.5.4. Actions 14. In order to effectively and urgently address COVID-related risks to innovation: a focus on ‘getting rail innovation moving again’ could help minimise the negative impact of COVID on longer-term innovation outcomes and may include a combination of: -‒ pro-actively re-connecting key individuals within larger firms, SMEs and academia that had been working on innovation projects that have been stalled via a targeted networking event -‒ ‒ incentivising prioritisation and / or safeguarding of innovation activity within SMEs, for example via a small grants initiative that can help to protect the time of key innovation active employees 15. To better understand the longer-term implications of the COVID-19 pandemic and its effect on the UK rail industry: commission a detailed horizon scanning study that engages extensively with stakeholders across the rail sector infrastructure and supply chain, with a particular focus on understanding how potential future business models can foster increased research, development and innovation, to act as a catalyst for industrial advance and economic growth. In equal measure, it should also engage extensively with rail customers to understand the direction of consumer demand for rail in a post-COVID world

16. In respect of realising the industry’s potential to act as both a stabilising and a stimulating economic force: once again, echo the Rail Supply Group’s call to mobilise the Rail Sector Deal so that larger, long-term contracts are let; but also create regional mechanisms through which smaller, innovation-oriented firms are effectively supported to scale new products and services.

Annex 1 Action Plan

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UNDERSTANDING THE REGION’S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

ACTION

Theme:

Establish a Regional Rail Research & Innovation Working Group

Industrial Policy & Economic Development

Ensure University representation within RDG COVID working group and advocate for / contribute to post-pandemic future of rail research

Regional Rail Research & Innovation Proﬁle & Positioning Rail Innovation Research & Funding

Use evidence presented in Rail Innovation report to feed into the new WYCA Innovation Strategy

Human Capital & Skills Societal & Cultural Development

Establish the Industrial Rail Innovation Taskforce Conduct research across NP11 LEPs, RSSB, Network Rail, RDG, RSG, NRIL, UKRRIN to compile current and emerging innovation test-bed opportunities like WYRFP Work with the West Yorkshire Innovation Network and wider national stakeholders to build a repository of rail-related innovation projects Use report and evidence to engage with relevant national stakeholders regarding strategic plan for FDI eg WYCA, BEIS, DIT Coordinate a series of cross-sector workshops that bring firms from different industries together to share knowledge and identify opportunities Work with IUK/KTN, LEP, BEIS, DIT to convene series of regional rail innovation showcase events and demonstrations Consult with YORIC, CKMA and other existing initiatives regarding opportunities and mechanisms for companies in related sectors eg automotive to diversification into rail Develop strategic plan for joint working regarding rail research and innovation including identification of funding, advocacy, dissemination and marketing plan Co-ordinate rail innovation showcase event & conference

Engage with Network Rail Telecoms and WYCA to understand practicalities of using WYRFP as test-bed Engage with region-wide rail innovation stakeholders to develop a proposal for attracting collaborative research funding such as (for example) the Research England Connecting Capability Fund or from EPSRC Expand rail-related KTPs

Further build positive working relationship with the National Railway Museum Secure further funding via eg Royal Academy of Engineering, EPSRC, Innovate UK for placements and internships that substantively increase the volume of research engineers/data scientists/ software developers within innovation active rail companies With regional colleges and wider regional academic stakeholders explore the potential and feasibility of establishing a rail-related degree apprenticeship programme

2020 Q4

2021 Q1

2021 Q2

2021 Q3

QUARTER OF START DATE

2021 Q4

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UNDERSTANDING THE REGIONâ&#x20AC;&#x2122;S RESEARCH & INNOVATION CAPACITY, CAPABILITIES AND POTENTIAL

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