In November 2017, the UK Government published the new flagship Industrial Strategy that lays down the national plan to boost economic growth, drawing on the country’s strengths in order to embrace the opportunity of technological change.
In the white paper, the Government has identified four Grand Challenges in particular, namely global trends that the UK must embrace to harness all the opportunities they bring and in which it has the opportunity to play a global leading role in the path towards the technological revolution:
• Put the UK at the forefront of the artificial intelligence and data revolution;
• Maximise the advantages for UK industry from the global shift to clean growth;
• Be a world leader in shaping the future of mobility;
• Harness the power of innovation to help meet the needs of an ageing society.
Key policies highlighted in the document include:
• Raise total research and development (R&D) investment to 2.4 per cent of GDP by 2027;
• Increase the rate of R&D tax credit to 12%;
• Invest £725m (€820m) in new Industrial Strategy Challenge Fund programmes to capture the value of innovation. This will include £170m (€190 million) to transform the construction sector and help create affordable places to live and work that are safer, healthier and use less energy, and up to £210m (€238 million) to improve early diagnosis of illnesses and develop precision medicine for patients across the UK;
• A series of Sector Deals, with construction, life sciences, automotive and AI the first to benefit from these new strategic and long-term partnerships with government, backed by private sector co-investment
• Invest an additional £406m (€460m) in maths, digital and technical education, helping to address the shortage of science, technology, engineering and maths (STEM) skills;
• Create a new National Retraining Scheme that supports people to re-skill, beginning with a £64m (€72m) investment for digital and construction training;
• Boost digital infrastructure with over £1bn (€1.13bn) of public investment, including £176m (€200m) for 5G and £200m (€227m) for local areas to encourage roll out of full fibre networks;
• Drive over £20bn (€23bn) of investment in innovative and high potential businesses, including through establishing a new £2.5bn (€2.8bn) Investment Fund, incubated in the British Business Bank;
• Create a new Transforming Cities fund that will provide £1.7bn (€1.9bn) for intra-city transport. This will fund projects that drive productivity by improving connections within city regions.
As regarding EU-financed policies, the Smart Specialisation Strategy in England document provides a strategic framework for investments in research and innovation funded by the European Regional Development Fund (ERDF). It points out the innovation priorities of the 2014-20 ESIF programme in the UK and it has as its main objective to identify the policies and public support available at national and local levels to help business invest in innovation; help Local Enterprise Partnerships (LEPs) and their partners to identify opportunities to benefit from; inform businesses, universities and others involved in wider research and innovation programmes, among others.
The Smart Specialisation Strategy in England, as detailed in the strategy document, aims to:
• guarantee that proposed actions are based on complete evidence that reflect the comparative advantages of the physical and human assets of particular places in the global economy;
• ensure that activities are fully integrated in the local economy and its supply and value chains;
• help build connections of ideas, finance and trade with similar activities elsewhere;
• promote the use of enabling technologies that can transfer and add value between related sectors.
Regional innovation policy in the UK began when the Regional Development Agencies (RDAs) were established in 1998 under the Labour government. Innovation increasingly became an important feature of their activities over a number of years, with a wide range of different policies implemented across the UK. Although specific regional policy responses varied, they tended to include: support for knowledge transfer and collaboration between the research base and industry; support for clusters and science innovation parks; investment in R&D infrastructure and centres of excellence. Regions were also tasked with delivering a number of national innovation programmes at the regional level.
In 2006/07, the range of programmes and services for business support (including innovation) underwent a process of simplification. As a result, most business-focused innovation support was defined by national policy and delivered locally by the RDAs.
Since the abolition of the RDAs in 2012, many innovation support mechanisms and their funding have been delivered at the national level via Innovate UK (formerly the Technology Strategy Board (TSB)) which was established in 2007. Innovate UK delivers a range of national programmes that support business innovation across the UK. These programmes include grant funding and loans to support R&D, UK-wide measures such as the Catapult Centres and the Knowledge Transfer Network (KTN), as well as schemes such as the Small Business Research Initiative (SBRI) that encourages lead customers to work with SMEs to address their innovation challenges. Innovate UK works also with the Research Councils to deliver Catalyst funding programmes and Innovation and Knowledge Centres (IKC), along with running funding competitions to help businesses develop innovative products and processes through funding of between £25,000 (€28,315) and £10m (€11.3 million).
Along with these national-wide programmes, regional measures are available to support business innovation and growth, with some being available to the whole region, while others are offered by local organisations (LEPs, CA, local authorities) with different or more limited geographies.
The more recently formed LEPs are not explicitly tasked with innovation policy. Instead, their priority is to support and develop the local private sector and to stimulate local growth. This, however, may include an innovation agenda, depending on the strengths and needs identified within the region.
In Autumn 2015, the BEIS invited businesses, universities, research and innovation organisations and LEPs to form consortia in order to carry out regional Science and Innovation Audits (SIAs) in different parts of the UK to identify individual regions’ specialties and drive local economic development.
In October 2016, iNet launched the SING (Smart Innovation & Networking for Growth) Projects, which will make it easier for SMEs to accelerate their development and implementation of new products, processes and services, as well as working with the UK research institutes. The project is ERDF funded and the businesses must be based in the Leicester & Leicestershire Local Enterprise Partnership area (LLEP) and be engaged in the general area of one of the LLEP’s priority sectors: Advanced Manufacturing and Engineering; Creative Industries; Food and Drink Manufacturing; Logistics and Distribution; Low Carbon Technologies; Textile Manufacturing.
In April 2017, The UK Government announced the launch of the Industrial Strategy Challenge Fund (ISCF), designed to provide funding and support to UK businesses and researchers, part of the government’s £4.7bn (€5.5 billion) increase in research and development over the following 4 years. It was created to ensure that research and innovation take centre stage in the Government’s Industrial Strategy in order to improve living standards, create well-paid sustainable jobs and drive economic growth.
The funding from the flagship ISCF is spent across six key areas that the Government, along with businesses and academics, identified as the biggest core industrial challenges where the UK has a world-leading research base: healthcare and medicines, robotics and artificial intelligence, clean and flexible energy, driverless vehicles, manufacturing and materials of the future, satellites and space technology. Innovate UK is in charge of delivering most of the ISCF.
In anticipation of the financial implications of Brexit, the Central Government is planning to devolve more financial resources for local growth to LEPs and local administrations that would eventually replace funding from the ERDF.