The N8 Research Partnership has praised a new report from the Institute for Government (IfG) as a crucial analysis of how investment in R&D outside the South East of England can play a pivotal role in growing the green economy and address social and economic inequality.
The report – ‘What levelling up policies will drive economic change?’ – was authored by Thomas Pope, Eleanor Shearer and Peter Hourston. It explores the need for a long-term focus on skills and cities and is supplemented by three insight papers on skills, infrastructure and innovation.
The main report makes a series of recommendations, including:
- The government should increase the ambition of the skills mission, alongside appropriate funding. The current ambition would still see the number of eligible qualifications taken each year remain below 2010 levels. Returning the number of people undertaking these qualifications to pre-austerity levels would require an additional 500,000 starts each year, rather than the current 200,000, and could provide a boost to output of £7bn in today’s terms.
- The government should ensure the R&D mission is also made more ambitious so that the share of public R&D spending outside of London and the South East increases, rather than just requiring that the level of spending outside of those regions increases.
- Prioritise the UK’s underperforming large cities outside London for economic investments. People working in Birmingham and Manchester already get a productivity boost from the agglomeration benefits of working in a big hub, but their productivity is low because people there are relatively low-skilled. A big focus on improving the attractiveness of those places for businesses and highly skilled people could drive major changes in the UK’s economic geography.
Commenting on the report, Dr Annette Bramley, director of the N8 Research Partnership, said: “At the N8, we want to see more parts of the UK thriving as clusters of innovation and growth, with improved quality of life for people living there. We want talented graduates coming out of universities in the North of England and elsewhere to have opportunities comparable to those in the South East of England. Coming during a leadership race where the future of levelling up is under scrutiny, this IFG report and its accompanying insight papers are a welcome intervention that reiterates why we shouldn’t step back from addressing structural inequality in our country.
“Increasing the R&D intensity of the North of England is truly a ‘win-win’ opportunity. Promoting the flow of ideas, knowledge and experience within and between clusters, incentivising collaboration and healthy rivalry will grow our capabilities and maximise the return on public investment for UK plc.”
Recommendations from the insight papers included:
Innovation insight paper
- The government should make the R&D levelling up mission more ambitious so that the share of public funding going to areas outside the South East grows, as well as the level. It should include a specific target for the fraction of total public R&D spending that takes place outside of the Greater South East.
- The government should develop additional policies to ensure that R&D spending in a place translates into economic benefits by developing absorptive capacity. Specifically, if the innovation accelerators prove successful at their current small scale they should be expanded.
Skills insight paper
- The government should increase the ambition of its levelling up skills mission to return participation in adult skills training to at least 2014/15 levels. The necessary funding from the Treasury should accompany this.
- The government should aim to increase participation in higher education as well as adult skills qualifications, especially in parts of the country where the share of people going to university lags behind the national average.
Dr Bramley added: “Already, world class-research is being varied out in the North of England. Businesses in our region, ranging from global multinationals to cutting edge start-ups are innovating in partnership with our universities; creating and securing jobs here. The North of England has not seen as much intensity of public R&D support as the Golden Triangle, but our research assets and our people demonstrate similar levels of excellence having won their funding through open competitions. While this means that currently our clusters are smaller and less well known than the Golden Triangle, this makes them an excellent investment opportunity with the potential for higher returns.
“Our universities produce thousands of talented graduates and post-graduates every year. The research and innovation capabilities of the N8 Research Partnership, and the North as a whole, are a key means to address the significant gaps in regional prosperity. Nonetheless, there are areas where more needs to be done.
“The new economic environment and the transition to net-zero offers huge opportunities for individuals, firms and the region. To make the most of these opportunities we need to do more to increase our skills capacity, as outlined by the IFG. We need rapid and sustained expansion in lifelong learning for businesses and the new technologies being developed in the region. The N8’s Net Zero North Skills Alliance is currently bringing together companies, further and higher education skills providers from across the region to ensure that people of all ages and education can access training that will evolve with their needs and the needs of employers. Access to a pool of skills is a key factor in supporting inward industry investment, so investing in people in the North of England is key for economic growth and prosperity for the Northern Powerhouse and the UK as a whole.
“I would urge both Rishi Sunak and Liz Truss to consider the insights offered by the IFG’s report as they seek to deliver upon the levelling up promises of the 2019 Conservative manifesto.”