European Commission

The South West UK region is large in geographical extent with an average population of 5m people and a regional GDP of €134b (2000 to 2008), which represent 7.6% and 8.4% of the UK population and GDP respectively. The regional GVA is a little under the UK average (by 7 percentage points), however it varies significantly around the region, from well below average in Cornwall and the Isles of Scilly to above average in Gloucestershire, Wiltshire and N. Somerset. These intra-regional differences are often greater than inter-regional ones, with businesses in the north and east of the region more heavily influenced by the competitive pressures of the South East and West Midlands than the southern counties. This is also reflected in the sector balance of the region, with the south more dependent on rural activities and tourism while the northern and eastern counties have a much more mixed economy including high-technology manufacturing (e.g. aerospace, defence, electronics) and knowledge-based industries (digital media, semi-conductor design, financial services). The region is home to major multinational companies such as BAE Systems, Airbus, Rolls Royce, HP, Honda, Toshiba, Intel and financial services companies.

The region, as a whole, has a lower unemployment rate than the UK average, and employs near the UK average in science and technology jobs. Over the last decade, the region's GVA has grown relatively well compared with the UK average; if it were not for London's strong performance during the financial boom, region would have probably exceeded the national average throughout the period. As a result, its share of UK GVA has been stable at about 7.7%. The region has also experienced a shift in balance of economic activity with a decline in the manufacturing share of GVA and an increase in the contribution of services.

Bristol is the key economic city-region. It sits at the Western end of the so-called 'M4 corridor' - a highly active economic area that follows the M4 motorway from Bristol, via Heathrow (the UK's main airport and world's busiest international hub) to London. The 'M4 corridor' has a particularly high level of economic activity in technology and knowledge based manufacturing and services, and is home to the UK branches of major multinationals.

The South West's investment in R&D is slightly above the UK average, with an average Business Expenditure on Research and Development (BERD) between 2000 and 2008 of 1.3% and a Gross Expenditure on Research and Development (GERD) of 1.9%. Its performance in terms of innovation outputs places in the middle range of UK regions. The South West performs particularly well in the introduction of existing products and services (in the top three performing regions of the UK) but less well in the introduction of novel products and processes. Despite this it is one of the UK's top performing  regions in terms of patents.

The region is home to eight universities and four higher education colleges including several research intensive universities and those with a focus on science and technology such as the universities of Bristol, Bath and Exeter. The University of Bristol is ranked eighth in the UK and 34 ^th worldwide in the 2009 Times Higher Education/QS university ranking system and the university is a focal point for the Bristol Science City initiative. The region has made significant investments in creating wider access to higher education in the region, supporting the development of the University of Gloucestershire and higher education colleges in Cornwall.

The region is home to a large number of public- sector research establishments including the a major defence research centre at Porton Down, the Metrological Office, the Health Protection Agency, UK Hydrographic Office, National Oceanography Centre and the UK's seven Research (funding) Councils. The region is also home to a number of industrial R&D facilities of major multinational businesses such as Toshiba, HP, BAE Systems and four science/innovation parks. However much of the R&D activity, academic, public and industry, is concentrated in the North and East of the region. 

The English Regional Development Agencies (RDAs) were closed in March 2012 as a result of changes in regional policy brought about by a change of government in the UK in 2010. Previously, these agencies had been responsible for regional economic development including regional innovation strategies and policies. Therefore the body previously responsible for regional innovation in the South West - South West Regional Development Agency - is no longer in existence.

With the demise of the RDAs there is no single body responsible for regional innovation and no national policy requirement to focus on innovation. Therefore regional innovation strategies, if /where they exist are the responsibility of either Local Authorities (county councils or metropolitan boroughs etc. at NUTS 3 level) or the newly formed Local Enterprise Partnerships (LEPs) which typically span a number of Local Authorities but not an entire (NUTS 1) region. While the concept of LEPs was identified at national level, their design, composition and organisational structure is entirely 'bottom-up'. In terms of geographical coverage they are sub-regional - where there were previously nine English RDAs there are currently 39 LEPs. Local Authorities can, for example, be a member of more than one LEP and a few Local Authorities are not members of any LEPs.

The LEPs are led by local authorities and businesses across 'natural economic areas' and are focused on driving sustainable private sector growth and job creation in their area. LEPs may also span NUTS 1 regions previously covered by the RDAs. There is no explicit requirement from a national level to focus on innovation. There are at least six LEPs involving Local Authorities in the South West NUTS 1 region.

LEPs are typically overseen by a Board comprising business leaders, public sector leaders representing the Local Authorities or elected councillors and, in some cases local universities, while their activities are managed via a 'delivery board' made up of predominantly staff from the Local Authorities plus staff from other existing regional bodies such as Chambers of Commerce.

In addition to the LEPs there are several other organisations relevant to the Governance of regional innovation. These include Design South West, Gloucestershire Gfirst, Science City Bristol and NHS Innovations South West.

Regional innovation policy in the UK essentially began when the RDAs were established in 1998 by the Labour government. Innovation increasingly became an important feature of their activities over a number of years and a wide range of different policies were developed and implemented across the UK. However the majority of innovation policy and funding was still dominated by national policy.

Although specific regional policy responses varied across the regions, they tended to include: support for knowledge transfer and collaboration activities between the research and industry; support for clusters and/or science /innovation parks; and, in regions with access to large capital funds, significant investment in academic and industry focused R&D infrastructure and centres of excellence. RDAs were also tasked with delivering a number of national programmes at the regional level - such as Grant for R&D.

In 2006/07 the range of programmes and services for business support (incl. innovation) underwent a process of simplification due to its high complexity. As a result much of the business focused innovation support was defined by national policy and delivered locally. Regional agencies could select which innovation services they wished to offer from a nationally defined portfolio and in 2007, the RDAs were also required to align some of their innovation funding with the priorities defined by the newly created national Technology Strategy Board.

Since the closure of the RDAs many innovation support mechanisms and their funding have returned to a system of delivery at the national level, most typically via the Technology Strategy Board. LEPs are not explicitly intended to focus on innovation but instead focus on supporting and developing the local private sector and, in some cases, this may involve support for innovation. However the budgets available to LEPs are lower than for the RDAs and there is no dedicated budget allocated to each LEP. They may bid into a national Regional Growth Fund on a project-by-project basis but additional financial contributions are expected from the private sector and Local Authorities for each project.

As a result of the above, most regional innovation measures available in this region are of networking or advisory nature (eg Design South West or MAS South West).