10 November 2016
New structures, new types of funding, a focus on place and a global outlook will help fuel economic growth, says Innovate UK Chief Executive Ruth McKernan.
I don’t think it’s a coincidence that Innovate UK recognises the equivalent sectors as critical to meeting the challenges of UK economic growth. We fund innovation in manufacturing and materials, health and life sciences, infrastructure systems, and emerging and enabling technologies. Real progress is interdisciplinary.
But innovation doesn’t just happen—it requires partnership between research, business and government. About 80 per cent of Innovate UK’s funding is awarded to businesses, with 20 per cent going to academic collaborators working on industry-led projects. Where more than one university is involved, projects deliver more than twice the return on investment than those without academic partners.
Innovation has never mattered more in business; economic analysis says it is the source of about half of all economic growth. We now face the challenge of sustaining a robust economy made up of resilient businesses offering secure jobs, across the UK. I see reasons for optimism.
First, publicly funded UK research and innovation can accelerate the absorption of high-quality science into industry. Innovate UK and the research councils have always worked well together. The Biomedical Catalyst partnership between Innovate UK and the Medical Research Council has invested £240 million in grants, including 186 business-led projects, and this in turn has led to more than £1 billion in follow-on private sector investment, creating jobs and growth.
Second, within UKRI, there is an opportunity to improve our offer of other types of funding. The research councils are also involved here, exploring seed funding and returning value through vehicles such as MRC Technology. But we would do a better job of starting and scaling high-risk and high-growth companies if we took a more consolidated approach to seed funding, loans and equity. Innovate UK must not lose its business-facing stance: most start-ups do not come from universities, but as those businesses grow, they can still benefit from the latest research. Working closely with other partners such as the British Business Bank and the Business Growth Fund to maintain momentum will be important.
Third, place matters. Research funding is distributed unevenly across the country, but Innovate UK’s business focus means grants are representatively spread across the UK. Our new broad-based competitions are increasingly popular, with more high-quality applications than our budget can support. Our commitment to place has gathered pace over the past six months with the creation of regional manager roles across the UK. We will shortly open our first regional hubs, improving knowledge exchange between businesses.
Now more than ever it is vital that businesses look up and out. The government’s decision to honour Horizon 2020 funding bid for prior to Brexit is appreciated by UK researchers and small and medium-sized businesses. The latter received as much in Horizon 2020 funding in 2015 as they did from Innovate UK, and more than any other EU nation.
To help these companies look beyond Europe, we have launched a competition to encourage international connections. Science is global, innovation is global and growing technology-based businesses need to operate internationally to be competitive.
These are just a few reasons to be optimistic. There are also many challenges, but we have talent and ambition. Economic growth requires securing a gold in innovation, and retaining it. That means consistent investment through an industrial strategy that harnesses science and innovation for the benefit of business—regionally, nationally and of international quality.
Ruth McKernan is chief executive of Innovate UK.
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