Written evidence submitted by Roz Bird (IGR0007)
AIP LLP CEO, Norwich Research
1. How does the Government drive research and innovation in our regions?
How effective are the government’s policies in supporting the innovation ecosystem across the UK’s nations and regions, particularly through commercialisation initiatives?
How should devolution be harnessed to support innovation across the regions and nations, and what role should local government play in supporting research and development?
Raising aspirations: There is a need for significant improvement in careers education, at the local level, to raise aspirations and provide a flow of information about jobs and careers, created by cluster activity and research park development. New school business link projects should be supported using frameworks such as the Gatsby Benchmark Gatsby Benchmarks | The Careers and Enterprise Company to measure impact and reduce young people not in education, employment, or training (NEET) in the local population.
Public transport: raised aspirations, within the population, will lead to demand for an improved transport system (frequency and cost to the end user) to ensure equal access to further and higher education and to jobs.
Improve FE: Provision in a local area needs to be modernised for example using latest software in college which is the same as industry, and all courses need to be reviewed annually to ensure the courses meet industry requirements.
Local business representatives should be incentivised through a local, regional or national award scheme to participate in the strategy and delivery of the school and FE engagement programmes. These awards could be linked to agreed corporate social responsibility (CSR) or ESG (Environmental, Social and Governance) standards. Other incentives could be offered, to businesses that participate, such as extra business rates relief.
Local businesses should be encouraged to work in partnership with local government, education and third sector to share responsibility for the delivery of these programmes aimed as raising aspirations in key groups in the work force including young people, women returners, people transitioning from changing employment requirements such as the reduction in high street retail into new jobs/careers.
How do factors such as the tax system, regulatory frameworks and standards influence the success of start-ups, spin-outs, and other innovation-driven businesses?
R&D Tax credits: These are a very effective way of encouraging, innovation focused, high-growth businesses not just to invest in R&D but to expand more quickly as the tax credits enable businesses to invest in their staff and in accommodation. We have examples where SMEs have decided not to increase their team and accommodation because of changes to the R&D tax credit system. The uncertainty caused the company to halve its expansion plan in the UK.
SEIS and EIS: This system successfully encourages individuals to invest in seed funds. These tax incentives therefore increase the investment opportunities for spin-outs and are an important part of the investment landscape for high-growth companies. At Norwich Research Park a growing number of SEIS and EIS funds are available to spin-outs as part of the campus-wide enterprise strategy.
Enterprise Zones: Encourage the development of key locations that support innovation. Two successful Enterprise Zone examples are Silverstone Park and Norwich Research Park. Incentives stimulating growth in these locations include business rates relief for a period of years, for incoming businesses, which can stimulate faster growth of these companies who use the business rates saving to fund expansion plans, employing more high-value staff, investing in specialist equipment and increasing their accommodation.
Enterprise Zones also successfully ‘gap fund’ development financial appraisals and in so doing serve to attract investors and ‘kick-start’ new commercial development to support cluster growth, creating new accommodation for high-growth tenants.
Accountancy rules: dictate reporting of company liabilities such as reinstatement requirements, in a lease agreement. Reinstatement clauses require a tenant to put their accommodation back into an agreed condition at the end of the lease term. This usually involves the tenants removing its bespoke fit-out. In clusters, and on research campuses, where the landlord/developer/manager is confident that future tenants will require a similar/same fit-out then these reinstatement requirements can be reduced. This then relieves a financial burden on these high growth companies, and this can be attractive to their investors. Being able to reduce the reinstatement liabilities for companies is more likely to be possible in clusters where the specialist skills pool and access to specialist technology dictates/drives the type of innovation-focused companies that will need accommodation and similar types of fit-out.
Regulation: the regulatory framework that governs the R&D can be a ‘make or break’ for businesses and the success of the clusters where they are based. For example, regulation around battery electric vehicles stimulated businesses to convert classic cars, and recycling trucks, to electric. As the governments targets and deadline dates changed, nationally, so the urgency to comply reduced and orders for vehicles reduced which had a detrimental effect on the financial viability of those companies.
The Precision Breeding (Genetic Technologies) Act and enabling legislation: unless the regulation is as good as the best in the world then global corporates will not be able to invest in the UK. The regulation needs to be attractive for inward investment.
What challenges do innovation-focused researchers and businesses face in spinning-out or scaling-up, such as accessing venture capital, infrastructure and intellectual property rights.
It is well recognised that one of the key challenges facing UK innovation-focused businesses in spinning out from universities and research institutes is the agreement that the business enters into with the research institute from which they were founded. In response to this, Norwich Research Park is undertaking a campus-wide programme, funded by Research England and led by the University of East Anglia, to review Technology Transfer Office (TTO) practices, with a view to harmonising spinout agreements.
There is no shortage of commercially viable ideas within universities and research institutes, and Norwich Research Park is no exception with a healthy pipeline of ideas under review. There are however barriers to success including the level of business experience of the new entrepreneurs spinning out of academia. At Norwich Research Park the campus management team at AIP LLP is piloting a seminar/training programme for new entrepreneurs which includes:
For all innovation-focused businesses, accessing capital is paramount, with cash flow being a key challenge. Many grants do not pay out until several months into the project, leaving the businesses facing large bills to pay in the interim. Take for example one such business on the campus, that was successful in being awarded an Innovate UK grant of £850k, the business owner took on personal loans, in excess of £80k, to bridge fund’ the project between payouts. Not all businesses are in a position to do this.
2. How does research and innovation in our regions drive growth and prosperity in those regions?
Innovation hubs will be effective in supporting regional growth and prosperity where there is strong leadership within the ‘regional innovation hubs’, such as a science park, or research campus. This is where campus management staff, such as AIP LLP at Norwich Research Park, are building good relationships locally with stakeholders such as local government, schools, FE and HE. There are many good case studies through the UK Science Park Association- UKSPA | Supporting and encouraging the growth of Science Parks, Innovation Centres and other Innovation locations.
Innovation hubs will be effective in supporting regional growth and prosperity where there is strong leadership within the ‘regional innovation hubs’, such as high-tech cluster organisations, which meet the Michael Porter definition Michael Porter's concept of clusters - IF, or have the potential to meet the definition (have key attributes including specialist skills pool and specialist facilities), and where they are resourced to manage cluster growth and maximise that growth through networking and ‘engineered serendipity’. Good examples include Cambridge Network Cambridge Network | Cambridge ideas change the world and Silverstone Technology Cluster Homepage - Silverstone Technology Cluster
To maximise this, the government should review and benchmark the existing ‘successful’ science parks, research parks and clusters, and look for local areas which hold a significant number of the key attributes needed to support a successful regional innovation hub.**
Cambridge is an example of a successful cluster that needs to be managed effectively to continue to deliver successful growth and inward investment opportunities. Norwich is an example of a new cluster with a potentially steep growth trajectory if managed correctly.
It is important to note that regional growth and prosperity is not just about creating high value jobs. The ‘multiplier effect’ is a significant growth driver - for every innovation-based job created, a wide range of other jobs are created including construction, administration, professional services, facilities management, catering, marketing etc.
How regional Cluster growth can best be measured, mapped, and monitored to help inform local leadership and evidence-based policymaking in Whitehall.
The UK Science Park Association would be a good place to start with measurement and mapping of high-growth activity nationally. The good practice guide would be a good reference point for benchmarking, measuring and monitoring - Search results for "good practice guide" | UKSPA
Essential ingredients to successfully support start-up business include:
Would unlocking investment at scale for innovative science and technology companies support regional growth, and how could this be done?
Biotechnology companies developing high value products and methods for scalable manufacture can reach limits of production from the basic laboratory facility that prevents further growth through sales or prevents access to larger or more regulated markets that require evidential ‘Good Manufacturing Practice (GMP)’ and pilot engineering facilities that support microbial fermentation manufacturing. This holds back technology translation and company growth and ultimately the potential impact of technology.
The Council for Science and Technology Report on ‘Engineering biology: opportunities for the UK economy and national goals’ identified a lack of accessible facilities that enable GMP recommending the formation of Biomanufacturing Innovation Centres. Where facilities do exist, they are designed to serve the needs of a specific sector.
Research organisations alongside relevant companies on the Norwich Research Park are a national asset with significant capabilities allied to ‘Engineering Biology’ where plants and microbes are harnessed and applied to address global challenges. For example, high value products that are precursors to other biological processes, e.g., novel production of vitamin B12, alternative meat protein, soil-plant biologics, microbial applications, fermentation and bioprocesses.
As a location the Norwich Research Park is well positioned to attract spinouts, with great potential for businesses to become established alongside this national capability. Facilities aligned with a large potential market for its services would be a catalyst to support the emerging and highly scalable sector, encourage spin outs and maximise translation of publicly funded research.
Examples of specific types of facilities include:
(1) Fermentation pilot production providing a service to the engineering biology sector accompanied with an ‘open innovation’ supported management and service model for SMEs. Capital / Revenue split circa £22m/£1.7m (£23.7m total) and,
(2) GMP – a combination of laboratory facility to develop pilot processes plus an associated standalone facility on the campus. This would provide a combination of managed contract production service and tenant space for companies to operate facilities themselves. Capital / Revenue split circa £20m/£3m (£23m total).
Should there be region-specific innovation and growth policies, and what should local government’s role be in this?
Targets should be set nationally and led regionally by a government office in the regions. Achievement of regional targets should be fed back to the national monitor. The aim should be to pilot and roll-out initiatives. Each region has a number of science parks, research campuses and clusters, with specific specialisms, etc., bringing this activity together and sharing good practice will help to create the national high-tech ecosystem.
3. How is research and innovation diffused or supported to drive productivity and growth in the regions, wherever it may come from?
What more can be done to ensure that innovation investments deliver tangible outcomes for both local and national economies, in terms of productivity and growth, and how should this be assessed?
Colorifix (https://www.colorifix.com/impact), based at Norwich Research Park, has recruited staff from the campus to grow quickly and establish themselves as leaders in using microbial technology to reduce the environmental impacts of dyeing clothes. Shortlisted for the Earthshot Prize in 2023.
TraitSeq, is a spinout of the Earlham Institute, Norwich Research Park, which has established and grown because of support from the institute and AIP LLP (campus management company) early-stage funding and promotional initiatives. Traitseq has recently announced a significant partnering opportunity with global multi-national Syngenta. Artificial intelligence is speeding up the development of the next generation of biostimulants – TraitSeq
To what extent do Catapults support technology diffusion, and drive both national and regional growth?
There needs to be an urgent review of what targets have been set and achieved to ensure that facilities are being well used and are having a significant impact in the regions and sectors they are targeting.
How well are universities and businesses coordinating efforts to develop and commercialise research, including the role of spin-outs and collaborative R&D projects?
The University of East Anglia and research institutes at the Norwich Research Park work closely to promote and coordinate opportunities on the campus, and in the region. As a strategic location for research investment, we are also part of a wider group of BBSRC campuses that meet on a regular basis to exchange ideas. We also connect with national schemes such as the Innovate UK ICURe programmes.
An example of how we proactively support engagement between academia and industry is through our ‘Explorer Forum’ series. These one-day sessions aim to address an industry-led global challenge in a facilitated workshop setting or seminar that includes multiple parties from the campus research community, and representatives from industry, funders, policy makers, and stakeholders. This is an exercise in exploring the future applications of research and the outputs of the session are a range of project ideas that participants choose to take forward in small teams. This may include a spin-out opportunity or a collaborative project.
A case study of one such output was an Explorer Forum on ‘Applications of Precision Breeding’ that included representatives from Defra, British Sugar, John Innes Centre, Earlham Institute and campus businesses British Beet Research Organisation and Tropic. As a result of the facilitated discussion, British Sugar secured an Innovate UK Farming Futures grant of £663,443 and a total project sum of £1m (included in figures above) to develop innovative gene editing approaches to protect the British sugar beet crop against potentially catastrophic losses to Virus Yellows disease.
What is the relationship between investment in innovation and economic growth, both regionally and nationally?
Norwich Research Park is a really good case study example to demonstrate the relationship between investment in innovation and economic growth. In outline the process is as follows:
How does the UK’s innovation ecosystem compare to those of other countries, and what lessons can the UK learn from international models in terms of commercialising research and innovation to benefit both regional and national economies?
Good practice within IASP IASP: Global Network of Science & Technology Parks & Innovation Districts – IASP
Note that Roz Bird, CEO AIPP LLP, also supports the Norwich Research Park submission.
10 January 2025