- Thursday, June 27, 2024
By: DR NIK KOTECHA OBE DL
EARLY 2024 marked yet another successful Leicestershire Innovation Festival, followed by a stunning awards event, recognising some of the best and brightest innovators in our region.
We’ve just marked the 20-year milestone for Medilink Midlands. This Midlandsbased life sciences innovation-enabling organisation continues to go from strength to strength. Many more innovation-centric companies are right here in our region, within an innovation ecosystem I’ve long championed at every opportunity.
The end of Q1 saw the publication of the UK Innovation Report 2024 from the University of Cambridge and the Cambridge Industrial Innovation Policy group. This report, described as “Benchmarking the UK’s industrial and innovation performance in a global context,” is an excellent and thoughtprovoking analysis. It compares the UK to other countries, analysing sector innovation and competitiveness. It serves as a serious prompt for key policy considerations.
The paper talks openly about the potential for significant shifts in innovation policy, given we are in an election year. There is an opportunity to reflect on and renew policy trajectories. It’s clear that, whatever the election outcome, the future policy picture on innovation is anything but certain.
The report authors advocate a position I would encourage, one of adaptation of existing policy post-election to ensure some degree of continuity. I’d go further and suggest we need evolution, indeed acceleration and progression, but no sea-change for innovation policy. Support must rapidly build and grow, not be “swapped out” for different support or focus areas if UK innovation momentum is to continue. That was a material early prompt for thoughts in the report for me, but there’s much more.
There’s a reminder, a nudge in fact, about the Department for Business and Trade’s Advanced Manufacturing Plan. This plan proposes £4.5 billion investment from 2025 with a focus on several sectors, including life sciences. Forward public investment to grow the sector, including our domestic production capabilities post-Brexit, is critical. Will it be implemented in its current form and quantum? Let’s see.
Drawing on 2019-2022 datasets, there’s analysis of the macro performance of the UK economy, comparing it to Switzerland, Korea, and Germany. The conclusions are interesting. The UK performed well against “peers,” with the fastest growth rate during 2021 of 8.8 per cent, starting to close the gap on pre-pandemic levels. Between 2019 and 2021, labour productivity in manufacturing increased by 9.1 per cent. However, there was a concerning retraction in manufacturing output (-3.3 per cent) in 2022.
Knowledge-intensive services and manufacturing have underpinned post-Covid economic recovery, so the 2022 manufacturing retraction is surely of concern. Switzerland outperformed the countries analysed during 2022 with high manufacturing growth, driven largely by its chemical and pharmaceutical sectors. This is something the UK could strive to achieve, but we’ll need focused investment and clear policy enablers to do so. Generic pharmaceutical investment, in particular, has been almost entirely absent since Brexit, according to analysis by the British Generics Manufacturers Association (BGMA).
The report authors note how the UK is a leading hub for academic research. The adverse counterbalance to this is that we are least able to convert research output into commercial success. That’s a finding that troubles me as an entrepreneur and an academic. It should trouble policymakers too. Will they respond? Let’s see.
I was concerned but not surprised to see that UK investment in R&D falls behind the leading nations. We know this regionally, from a public sector investment perspective, all too well. The East Midlands has received the lowest level of public R&D investment over many years.
This has stifled our true innovation potential and more. It has removed the oxygen from both entrepreneurs and academics who have often left the region in order to grow. Too many have taken their skills, their energy, their ideas, and their enthusiasm elsewhere. This outflow must be reversed quickly now to underpin our regional economy and that of the UK as a whole.
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It’s great to read analysis that confirms potential for the UK. That’s exactly what I felt when I read that we’re training a high number of students in STEM subjects. Staying with STEM for now, the authors highlight that 42 per cent of graduates completed STEM disciplines, and of those, 52 per cent were health-related studies. UK employers in the same period report finding it hard to employ staff with scientific knowledge and in medical or production areas.
This is something I experienced firsthand. Overcoming this will need sustained government policy and investment to really turn this “super tanker” of a problem. Policy needs to be carefully and consciously crafted in this space to see success.
There’s much more besides in this analysis. In an important year for potential big shifts in public policy, private sector investment, and the UK economy within a dynamic and challenging global context, it is sound and timely food for thought.
Will all those that need to take the due time they should to “digest” and act on all this paper presents? Will they curate next steps, underpinned by the evidence, which shows a path with many opportunities ahead for UK innovation? I hope so. Let’s see.
