By Steven McGinty

“Innovation distinguishes between a leader and a follower” Steve Jobs

From penicillin to Dolly the sheep, the UK has always been at the forefront of scientific innovation. Last month, the Chancellor, George Osborne, gave a boost to the scientific community when he welcomed the idea of a National Institute for Materials Research and Innovation in the North of England. The Chancellor said that this would create new jobs and attract further investment, emphasising that the government are committed to the creation of a ‘Northern Powerhouse’.

This is just one example of how scientific innovation can be used to support economic development. Below I’ve identified some of the key ingredients to developing innovation, as well as providing several examples of good practice across the UK and Ireland.

Innovation infrastructure

The North West Business Leadership Team (NWBLT) report highlights the importance of having the infrastructure in place to support innovation. Crucially, it suggests that the ability to create partnerships between organisations and across business, government agencies, and academia, helps firms to gain a competitive advantage. For example, the Virtual Engineering Centre, a partnership between the Hartree Centre and the University of Liverpool, supports companies such as Jaguar Land Rover to improve their business performance through the adoption of the latest techniques and tools.

Business clusters, particularly digital clusters, have also proven to be important for driving innovation and increasing productivity. These clusters involve bringing together the right innovative people and providing them with access to the right resources in a small geographical area.

Some notable examples include Tech City in East London, which is a cluster of technology and creative firms, and Dublin’s Digital Hub, a project based in the Republic of Ireland, which contains a range of firms, focused around digital media and entrepreneurship. The clusters blend technology companies with organisations from other sectors, including retail, leisure and advertising.

They also play a key role in helping start-ups to develop. For instance, it’s been shown that the development of the nanotechnology industry has been related to a small number of scientific clusters across the world.

Start-ups and agile SMEs

Start-ups and SMEs are important for bringing new products, technologies and services onto the market.  Universities can play an important role in providing a wide variety of support to SMEs. Several programs already exist in universities across the UK, including the University of Leicester’s “SME Support to Growth” project, which offers advice on exporting internationally, and the University of Birmingham’s Accelerating Business-Knowledge Base Innovation Activity (ABIA) project, which provides varied and tailored support to SMEs working in science and technology in the West Midlands, including access to support from doctoral researchers.

Additionally, the University of Manchester has also been very successful in launching SMEs.  This includes Nanoco, a firm that develops and manufactures quantum dots and semiconductor nanoparticles that are used in a number of areas, such as bio-imaging and solar energy.

The Organisation for Economic Co-Operation and Development (OECD) also highlights that SMEs can find it difficult to access early stage financing, particularly since the economic downturn. Therefore, it’s important that the government introduces and supports policies that provide access to finance. Two examples that already exist include the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS), which provide tax relief to investors who buy shares in high risk SMEs.

The Campaign for Science and Engineering (CaSE) has also raised the issue of investment in SMEs. They have voiced their concern over the UK government’s cuts to research spending, highlighting that the UK is below the EU average on research spending and is 21^st in the league tables of research spending, behind countries such as Belgium and the Czech Republic. The report suggests that increased funding should be given to Innovate UK, a body that supports innovation in business.

Highly skilled workforce

The Department for Business, Innovation, and Skills emphasises the importance of having people with the necessary science, technology, engineering and maths (STEM) skills to generate new knowledge. In addition to technical skills, the report makes it clear that the UK must produce people who have an understanding of business management and the entrepreneurial skills to develop their innovation commercially.

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Further Reading:

• Osborne pushes northern materials science ‘powerhouse’ (Engineering and Technology Magazine, 2014)
• ‘Exploiting The Excellence’: England’s North West – where world-class science underpins wealth-creating innovation (North West Business Leadership Team (NWBLT), 2014)
• Dublin’s digital hubris: lessons from an attempt to develop a creative industrial cluster, IN European Planning Studies, Vol 15 No 9 Oct 2007, pp1261-1271 (Bayliss, 2007)
• The new boomtown? Creative city to Tech City in east London, IN Cities, Vol 33 Aug 2013, pp51-60
• The determinants of science-based cluster growth: the case of nanotechnology, IN Environment and Planning C: Government and Policy, Vol 30 No 1 Feb 2012, pp128-146 (Mangematin and Errabi, 2012)
• SME Support To Growth (University of Leicester, 2014)
• Accelerating Business-Knowledge Base Innovation Activity (ABIA) (University of Birmingham, 2014)
• OECD Science, Technology and Industry Scoreboard 2013: innovation for growth (OECD, 2013)
• Enterprise Investment Scheme (EIS) (HMRC, 2014)
• Seed Enterprise Investment Scheme (SEIS) (HMRC, 2014)
• Insights from international benchmarking of the UK science and innovation system (Department for Business, Innovation and Skills, 2014)
• Fostering innovation-led clusters: A review of leading global practices (Economic Intelligence Unit, 2011)

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