Place Matters - A Roundtable Insight Into Innovation And Growth In The UK
Ahead of the publication of a landmark new report - Place Matters: Innovation and Growth in the UK - Bruntwood, Bruntwood SciTech, Legal & General and Metro Dynamics met to discuss its findings and what they mean for the future of innovation in the UK.
Chris Oglesby, chief executive, Bruntwood
Ellie Jukes, senior investment manager, Legal & General
Nigel Wilson, chief executive, Legal & General
Phil Kemp, chief executive, Bruntwood SciTech
Facilitator - Mike Emmerich, founding director, Metrodynamics
Boosting innovation through the science and technology sectors has long been a part of the solution to the UK’s productivity puzzle.
Place Matters: Innovation and Growth in the UK is an attempt to create a roadmap towards greater innovation and economic growth, by giving clear instructions to government, civic leaders, business leaders, academic and research institutions, property developers and investors.
Understanding what makes innovation districts successful is pivotal to this. The report argues that there is in fact a ‘Power of Three’ that always needs to be considered.
This encompasses the innovation districts themselves, a supporting innovation ecosystem - such as complementary professional services firms - and a place ecosystem that helps create a desirable place to live and work.
Mike Emmerich: “One of the arguments we make in the report is successful innovation districts don’t exist in isolation. They are only as good as the immediate ecosystem. In turn, this is only as good as the city, its schools, its cultural and retail offering and so on. Too often, there is an attempt to magic up an innovation district from nothing. Place is a driver.”
Chris Oglesby: “Just like a business, a place thrives as a result of its strategy and its culture.”
With the discussion taking place during lockdown, the issue of physical place was brought into even sharper focus.
Ellie Jukes: “In the last 12 months the role of innovation in place has moved from being an interesting conversation to an important conversation. One message that comes out while we exist in this virtual world is the importance of physical space. Even the most virtual of businesses need a physical presence somewhere underpinning it; whether it’s a coworking space or a lab.
“If you think about Bruntwood SciTech, one of the things I find particularly appealing is that it has the curation element within it, so it will place the customers next to one another where there are synergies and one can accelerate the business model of the other.”
With academia, public health bodies, research institutions and entrepreneurs all playing such an important role within innovation districts, funding is always a critical consideration.
Mike Emmerich: “Innovate UK has spent around £2.5bn over the last 10 years on innovation projects. The Fraunhofer institute in Germany that it was largely modelled on spends around £2.8bn every year. But what happens if we have more money?”
Nigel Wison: “The government needs to put in the seed capital, particularly around people and places. We want really purposeful things that align with the strategies and the capabilities of the universities and the city themselves. A really good example of that is Helix up in Newcastle, which is in partnership with the university and the council but also with the entrepreneurial community. They all get together on a regular basis to collaborate and see what are the good ideas we have for driving these cities forward.
“The world is awash with money and there are fantastic opportunities, we’ve got to step up and make some of this happen. Some of it will get lost, that’s the inevitability around innovation. A consequence of success is that we will have failures. When we do fail, don’t blame others, but redouble our efforts to succeed.”
Phil Kemp: “I’ll sit down with entrepreneurs across Manchester, Leeds and Birmingham and they'll talk about the difficulties of how they raised finance either in their 1st, 2nd or 3rd round, and that they could have brought their business or ideas to market far quicker if there had been an easier path to securing that finance.
“Oxford doesn’t have an issue with that because of the OSI fund, the issue with Oxford is more around the ability to provide the right kind of place ecosystem to support the businesses that are spinning out of the university. That connection between entrepreneurs and those that can and want to invest is super important to the success of the innovation ecosystem.”
Chris Oglesby: “It’s a virtuous cycle; we almost need to signpost that we have these funds available in order to shift their thinking; there is definitely something we can do with place-base funds [like OSI].”
Mike Emmerich: “We have businesses that aren’t ready for investment—this is common throughout the country. It used to be the same in Boston, which is one of the success stories we look at in the report.”
While backing good ideas with capital is one problem, conversely some good ideas fail to turn into commercial opportunities.
One weakness in the UK’s current innovation infrastructure the report identifies is in translational research.
The UK might be a world-beater in scientific discovery but too few ideas become commercial opportunities.
Nigel Wilson: “Graphene is a great example. It’s amazing science, but 10 years later where are the jobs? Commercialisation is a real challenge.”
Places also struggle to on-board investment. The report discusses the notion of absorptive capacity, which is the ability of places to convert investment into innovation, jobs and growth.
Phil Kemp: “What we want is more places to be like a sponge, bringing in jobs and innovation; this is a challenge for some places. I was in Boston late last year and they were pulling talent from all over the US, because anyone there knows if they want to study life sciences and then pursue a career in it then they need to go there.”
Boston was just one of the successful cities the report looked at alongside several others including Shenzhen, China.
Nigel Wilson “When you look at what Shenzhen has achieved, we have to have the confidence to self-determine our own success at a city level and stop saying the central government will do it.
“We need to identify who the do-ers are in order to facilitate this type of growth in towns and cities. Our political leaders have got to go out and see what is best in class…...we’ve achieved it with our universities, why can’t our cities do the same?”
While our panel agreed that UK cities need to learn from the world’s best, they also need more autonomy in order to fulfil their ambitions.
Chris Oglesby: “The exemplar cities we refer to [in this report] are exemplar because they operate in a more federal environment.
“For cities to be able to take more control of their own destiny they do need to have more powers to be able to take control of their own destiny. Greater devolution is absolutely key.”
But while operating with greater independence, collaboration between UK cities is essential to avoiding their achievements cancelling each other out.
Phil Kemp: “If we have every city or innovation district across the UK trying to cover a broad range of specialisms then we don’t maximise the capability of UK plc.
“By creating a network of thriving innovation districts [Bruntwood SciTech’s strategy] it actually allows us to focus on sector specialisms in different cities but then connect these cities across the UK so that we’re stronger together.
“Yes, it’s a challenge, but I’m positive that if we put the right building blocks in place, it’s possible for the UK and our cities to compete in this way, so they don’t necessarily see their own home cities as competition, but international.”
Chris Oglesby: “Those cities that have had a clear strategy around how they’re going to be successful have also had that right culture of collaboration.
“Find out what you’re world class at and absolutely focus on that. Bring together all of the key people, and ensure they’re working together to grow the pie rather than fighting over it, and make sure that they’ve got that culture of collaboration and think big and long term.”
Nigel Wilson: “It’s the word collaboration that has been missing for a long time and it's the word centralisation that has been too much at the forefront of British political and economic system. Devolution needs to happen at an ever increasing pace and not slowing down.”
Work on the report began before the pandemic and its economic impact struck.
Coronavirus has not only made the case for bolder economic policy more critical but also, through adversity, showed the UK’s potential for innovation at its best.
Phil Kemp: “The key thing at Alderley Park was the innovation that came out of the Lighthouse Lab. It started as a conversation between the Medicines Discovery Catapult and Government and within five weeks we had created a lab capable of carrying out 50,000 tests a day. Normally, a lab would take a year from spec to build.
“We [the UK] have an ability to innovate very quickly and for me it shone a light on those areas that need investment in the UK if we’re going to come out of covid and post-Brexit to be strong as a country.”
The world is now undoubtedly a very different place to the one we left behind in 2019. This has held some important lessons for the participants as they focus on what action is needed to repair the economy.
Ellie Jukes: “Words are no longer enough. People expect action and are galvanized across class and other demographics under the banner of collectivism. People expect action so this is a big lesson for business and government.
“Innovation is not the panacea to all ills, it is not going to solve the productivity puzzle but it is an important part of the toolkit. You need to identify your anchors, whether that’s a university, a hospital or a niche economy and use those as springboards. Be brave, now is the time to take a risk.”