Regional innovation - local responses to global challenges
By
Rosie Winterton
Minister for Regional Economic Development and Coordination
4 Mar 2010, Northern Way and OECD Seminar, Leeds University
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Introduction
Good afternoon and thank you for inviting me here today to discuss what is a very important subject.
Britain’s future prosperity cannot - and should not - be generated solely by London and the South East. So we have to make sure communities right across the North are ready, and able, to grasp the economic opportunities opening up in the new global economy.
The three Regional Development Agencies, Yorkshire Forward, One North East and the North West RDA, have already taken big strides forward on this – individually within in their regions, and collectively through the Northern Way - working closely with their universities and a wide range of other regional and local partners.
And the RDAs, as strong, employer-focused organisations in each region, are crucial if we want to make further progress, creating the right business environment so enterprise can flourish.
I believe that nurturing innovation – in everything from developing new products to searching out new markets – has to be a fundamental part of this drive.
Innovation
Innovation is the foundation of Britain’s international competitiveness, which in turn will underpin our future prosperity, our quality of life and our future job prospects.
So supporting and targeting investment to promote innovation - in sectors and regions where the UK has existing strengths and potential future competitive advantage - is a key element of our strategy for supporting the economic recovery now underway.
As a Government, we have looked at where our industrial expertise and knowledge base will need to lie in future. Whether that is in advanced manufacturing; bio-science; or the low carbon industries.
We have asked how well equipped these industries are to cope with future demands. And, as importantly, what Government can do to support, develop and enhance their ability to respond.
Our Growth Strategy, launched in January, set out our thinking on these issues. The answer lies in taking an active approach to ensure we have got the right infrastructure, the right investment climate, the right innovation support, and the right skills to grow and prosper.
Our Strategic Investment Fund, set up to bolster that industrial infrastructure and worth £950 million, provides the resources to take this work forward. It is investing in projects, around the country, that will enable our regions to specialise in the technologies of tomorrow.
The new Printable Electronics Centre in Sedgefield, County Durham, is just one example. The £12million project – launched by the Northern Way and the three RDAs - is establishing a national centre of excellence that will allow us to enhance our existing position as a world leader in the field.
Now, we know that Britain has a world-class research base, but sometimes we have struggled to get those innovations out of the laboratory and into the market place.
So we have also set up the UK Innovation Investment Fund to support new investment for Small and Medium–sized Enterprises looking to expand. It will invest in venture capital funds that back high-tech, high growth businesses in key sectors.
We expect this seed fund to leverage up to £1 billion in private capital. It has already given £125 million to a high-tech, low carbon fund. And last week the Prime Minister announced a further £200 million for the life sciences, digital and advanced manufacturing.
The fund demonstrates our absolute commitment to developing the technologies that will create the new industries of the future.
But, of course, it’s essential we invest in our people, too. So, as part of our Skills Strategy, we are asking the RDAs to identify the skills priorities in their regions in the coming years, and to work with training providers to ensure they are met. This will enable everyone to develop the skills they will need to take advantage of these new job opportunities.
RDAs supporting Innovation
I believe that the RDAs have a critical role in allowing innovation to flourish. They already have an excellent track record. In 2008/09, they invested £300million in innovation infrastructure – such as science parks; innovation vouchers; and incubator facilities for start-ups - to help businesses develop new products and technologies.
Their investments have paid off. Independent research by PriceWaterhouseCoopers last year found that, for every £1million the agencies spent on science, research and development, and innovation infrastructure, over £8million was added to the regional economies.
The Northern RDAs have shown ambition and imagination in collaborating with businesses and universities, backing projects that will support innovation and develop new industrial strengths within their regions. Schemes underway at the moment include:
Mediacity UK, under construction in Salford and backed by the North West RDA, will be Europe’s first purpose-built creative and digital media centre. Harnessing the expertise of Salford University, it will generate many new jobs and continue Salford’s renaissance.
In North Tyneside, the former Swan Hunter shipyard has been bought by One North East and the local council, and will be transformed into a hub for the off-shore and renewable energy industries, with a Learning Village for people to develop relevant skills.
At Hatfield near Doncaster, Yorkshire Forward and local authorities in the surrounding area have got the green light for a carbon capture and storage plant, next to a clean coal power station. The project is expected to create 2,500 jobs in plant construction and 6,000 jobs in pipeline construction.
But collaboration between RDAs is just as vital. The £15 million Innovation Programme, jointly funded by the three Northern agencies and run by the Northern Way, is a shining example.
Focusing on priority sectors such as printable electronics; offshore wind; and carbon abatement technologies, the programme is designed to harness the science and innovation knowledge base that exists in the North’s universities, and help businesses use it to seize first-mover advantage in emerging global markets.
The strong relationships that the Innovation Programme cements - between companies, the RDAs and universities – have never been more important.
Low Carbon
And this kind of collaboration will be vital, if we are to grasp the opportunities created by the global transition to a low carbon economy. As we face up to the challenges posed by climate change and a growing population, our ability to adapt to changing circumstances will be crucial. This fundamental transformation has the potential to be the great industrial opportunity of our age.
We will have to change the way we power our factories, light our homes, run our cars. We will have to realise this country’s potential in renewables, whether it is wave, wind or nuclear energy.
The number of possible technological and industrial applications and spin-offs is almost limitless. And given that that’s the case, we believe Government has an important role to play in smoothing the transition and backing innovation. Markets won’t by themselves make all the necessary investments; or take all the risks.
The global low carbon market was worth £3 trillion in 2007/08; it is set to grow to an estimated £4.4 trillion by 2015. This economic prize is too big to ignore. So we are working closely with the RDAs, the universities and other partners to capture it for the English regions.
Here in Yorkshire, the Centre for Low Carbon Futures is an exciting joint project between Yorkshire Forward – backing it with almost £6 million - and the Universities of Leeds, Hull, Sheffield and York. The centre will be a national centre of excellence and turn the world-class research expertise in this region into commercial solutions for climate change.
In the North East, the New and Renewable Energy Centre in Northumberland - backed with £40 million from the Strategic Investment Fund, and nearly £10 million from One North East - will enable the UK to establish itself as a world-leader in offshore wind and Marine technologies and production.
The Government is also establishing a series of Low Carbon Economic Areas, which play to the existing industrial and manufacturing strengths in different parts of the country. These areas are being backed with money from the SIF - and investment from the RDAs – and we will be working closely with the agencies to ensure the maximum possible return.
The North West and Yorkshire Nuclear Energy LCEA is being led by Yorkshire Forward and the North West RDA, and will build on the existing knowledge base here. Its centrepiece is the Nuclear Advanced Manufacturing Centre at Sheffield University.
The centre will bring together world-class scientific expertise with the manufacturing excellence of powerhouses such as Rolls-Royce, Aveva and Westinghouse.
Investments such as these, which boost firms’ ability to innovate, will be fundamental to Britain’s future competitiveness. They will underpin the ability of companies, across the North and around the country, to get ahead in the global market place.
And it’s absolutely vital that they do. Globalisation creates new opportunities for business as markets expand and international supply chains grow. Easier market access and technological change have made it easier – even for small firms - to enter them.
So we are harnessing the power of Government - at regional and national level - to do what only the state can: establishing clear policy frameworks that allow the private sector to take long-term commercial decisions.
Policy framework
Last week, the RDAs published a joint Action Plan outlining the future building blocks for economic growth across the country - setting out how they will collaborate to bolster existing competitive advantages, and invest in the capacity needed to generate future jobs.
But as part of that they need to plan for the long-term. So they will also be drawing up new Regional Strategies, in conjunction with their Local Authority Leaders’ Board. These strategies have a 20-year horizon and will bring together priorities for economic development; housing; and climate change; skills, planning and transport. They will be a long-term economic blueprint for each region.
We have also asked the RDAS to work with their universities, to examine how they can exploit their cutting-edge research to forge even closer partnerships with industry and drive regional economic growth. We expect them to report back on this work shortly.
Conclusion
In all these areas, a joined-up approach – bringing together Government, the RDAs, local authorities, industry and academia - is absolutely crucial. But not just within regions; it has to happen between regions too.
Spotting the business opportunities, identifying and removing the barriers to success and continuing to innovate, will demand all of us working better together.
And I believe this is absolutely the right way forward – using public investment to lay the foundations for the economic growth that will be generated by entrepreneurs.
We can’t shield ourselves from the profound transformations we are witnessing in the global economy. But we can prepare ourselves to take advantage of them.
I have seen the breadth and depth of talent we have here in the North, and beyond. So let’s work together to harness that innovative talent, and create the jobs and growth that will drive our country’s prosperity in the years ahead.
