Summary
Debates on the regional distribution of research and innovation tend to focus on the distribution of R&D investment (inputs) across the UK. We advocate a focus on the distribution and magnitude of research outputs and outcomes as a key determinant in driving growth and prosperity across all regions.
Research routinely leads to impacts in other regions. The geographic distribution of R&D investment should be designed to maximise the distribution of outcomes across the UK. This includes leveraging the national ecosystem of R&D talent and capabilities – including research-intensive universities in the Greater South East – to drive diffusion and ‘exporting’ of research outcomes across regions.
Government and funders should investigate funding mechanisms and incentivise initiatives that enable research-intensive universities to connect with and have a positive effect on the economy of regions beyond their own. This includes stimulating interregional collaboration, which plays an important role in contributing to economic prosperity across UK regions.
Quality-related Research (QR) funding and Higher Education Innovation Funding (HEIF) underpin universities’ capacity to deliver economic and social impacts across the country and should be prioritised in the 2025 Spending Review.
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Much of the debate about how the Government can drive research and innovation in our regions focuses on altering inputs to the research and innovation process, in particular how greater investment in regional research organisations and regional partnerships might drive growth and prosperity. In this submission we focus instead on the geographic distribution and magnitude of outputs and outcomes from government investment in R&D. This is an important determinant for policy to focus on when considering how to drive growth and prosperity across all regions. Such a focus recognises important ways in which investment in one region can produce outputs and outcomes in another region, lifting UK growth and prosperity.
We thus see a linkage between all three questions posed by the Committee, and suggest that focusing on mechanisms for diffusion (or ’export’ of outcomes) – the third question – is the key to delivering on the second and first questions. Considering the questions in this opposite order might permit a greater focus on what matters more for communities across the UK – outcomes rather than inputs.
Alongside fostering R&D in less research-intensive regions, the wider UK R&D system can be leveraged to maximise research outcomes across regions. This includes a role for research-intensive universities in the Greater South East in generating economic change far beyond their local environments. Many UCL academics have advanced the regional growth agenda by informing approaches to enabling regions outside the Greater South East to play their part in economic renewal. This includes shaping ideas behind the Government’s English Devolution White Paper published in December 2024.
One of the purposes of government investment in R&D is to drive outcomes of benefit to the UK. It follows that the geographic distribution of inputs (investment) should maximise the size of the outcome and produce an optimal distribution of such outcomes across the UK. It is not immediately obvious that a homogenous distribution of investment would achieve this because the distribution of R&D talent, population and capabilities is not even across the UK. For example, the region in which UCL is based (London) has the highest concentration of top 500 universities, a key component of R&D ecosystems, of any city in the world. Such geographic variability is a common feature of R&D ecosystems worldwide.
In such varied national ecosystems, the ‘exporting’ of research impacts (outcomes) across regions and the mechanisms that encourage this should be considered in much more detail, to maximise the benefits of R&D for all UK citizens, wherever they live. An analysis by RAND of impact case studies from universities across the UK (gathered for the 2021 Research Excellence Framework) examined the regions in which research took place and led to impact. This revealed a vast network of research impact flows across the 12 UK regions. Research routinely led to impacts in other regions, with each region ‘exporting’ close to half or more (≥46%) of its impacts. However, there was also significant variation in how much each region ‘exported’ their impact. Notably the South East was the biggest ‘exporter’, exporting 69% of its impact across the UK. Thus, R&D investment in each region not only has distinct local impacts, but also has different impacts across the UK. The factors that lead to some innovation ecosystems ‘exporting’ more of their impact are thus important and may deserve greater consideration and policy focus.
There are numerous specific examples of research impacts being exported to other regions with commensurate effects on growth and prosperity, as well as research centres serving as national infrastructure (see Box A). Universities play a key role in this process. Aside from research, universities have considerable impacts on communities and the economy outside of their region. For example, analysis by London Economics found that 39% of UCL’s 19,000 jobs and 34% of UCL’s economic impact occurred outside of London.
Box A: Case studies of UCL ‘exporting’ research and innovation impact across the UK
Case study 1: Improvements in care for stroke patients UCL research found that reorganising UK hospital stroke services, so that all patients can be treated in large specialist stroke units, results in better care and outcomes. This evidence was pivotal in hospitals across Greater Manchester reorganising their stroke services in 2015, leading to significant improvements in care for approximately 20,000 stroke patients and 340 additional lives saved in the five years since the changes took place (approximately 4,000 patients treated and 68 additional lives saved per year). It also led to the centralisation of stroke services in South Yorkshire and Bassetlaw, West Yorkshire and Harrogate, and North Cumbria. (This is one of a collection of case studies featured in London Higher’s interactive map showing widespread impacts of London R&D across the UK.)
Case study 2: The role of research centres as national infrastructure The concentration of research activity in focused centres can leverage broad impacts across the country. For example, the London Centre for Nanotechnology, a collaboration between UCL, KCL and Imperial College, contains many high-end nanotechnology facilities used by research groups based across the country.
In life sciences, the Zayed Centre for Research into Rare Disease in Children at UCL combines a cutting-edge genomics service with clinical expertise to provide treatments for children with rare diseases who live in all parts of the UK. Such ‘rare’ diseases are not rare when expertise is concentrated in a single location to drive advances in new treatments, but the impact of those advances is felt across the UK. Similarly, clinical research at UCLH has wide geographical reach, with patients coming from 31% of areas in England over a 20-year period. Across Greater London, patients came from 83% of areas, and these were significantly more deprived compared to other areas of London. Interregional partnerships have a role to play in connecting up centres of expertise to drive national impact. The vaccine hubs VaxHub Sustainable and VaxHub Global are co-led by UCL and the University of Oxford, with academic partners across multiple UK regions: the universities of York, Leeds, Manchester and Cardiff and LSHTM. The hubs have dedicated mechanisms for engaging with industry partners that accelerate the development and manufacturing of vaccine technologies at scale. The joint VaxHub network has members across the UK as well as globally, and provides opportunities for training, funding, collaboration and access to experts.
Case study 3: Healthcare spinouts drive improved health outcomes across the UK Blood cancers claim approximately 15,000 lives each year in the UK. Many patients relapse or do not respond to standard treatment. Research at UCL’s Cancer Institute developed CAR T-cell therapy, a personalised approach that reprogrammes a patient’s immune system to eradicate lymphoid cancer cells. Spinout Autolus Ltd was founded in 2014 to develop the technology, which gained US FDA approval in 2024 and is being reviewed by UK and EU regulators. The therapy will be manufactured in Stevenage (a regional ‘export’ of impact) and supplied throughout the UK and globally. Innovations such as this are key to countering rising levels of ill health and economic inactivity in the UK, driving improvements in quality of life alongside productivity.
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It is well established that public investment in R&D benefits and leverages private R&D. Publicly funded R&D in universities generates research outputs that can be used in private R&D, creating new products (e.g. innovations, patents), processes and services, improving profits and leading to growth. Accordingly, the productivity of firms or industries is related to their R&D spending. A 2024 Government-commissioned report quantified the rate of return to public R&D at 40%, meaning £100m of public R&D investment on average yields an increase in annual private sector productivity worth £40m six years later.
This leveraging of private R&D investment is critical because it is mainly private sector R&D that drives the positive association between R&D intensity and output growth in economies. This was reflected in a 2024 analysis of UKRI-funded projects between 2004-2021 by the ESRC-funded Productivity Institute. UKRI funding leveraged private R&D funding and the positive effect of knowledge collaborations on regional economic prosperity was mediated via regional business R&D.
Notably, the study found that interregional collaboration was the main contributor to economic prosperity over other types of regional collaboration (e.g. intraregional collaboration). This was primarily associated with collaborations with London, leading the authors to conclude that “knowledge connectivity and institutional connectivity with London is central to achieving regional convergence and Levelling Up”.
The role of interregional networks is also reflected in other countries. For example, a 2024 study found large flows of knowledge within firms that operate in multiple locations across the US. Connections to other regions through knowledge-sharing networks were instrumental in delivering economic impact.
Government and funders should therefore investigate funding mechanisms and incentivise initiatives that enable research-intensive universities to connect with and have a positive effect on the economy of regions beyond their own. There is an opportunity for UKRI to explore this when partnering with local leaders to deliver the regional innovation funding programme described in the English Devolution White Paper. Investing in interregional partnerships may be more effective than investment solely within regional organisations.
In 2024, UCL appointed its first Pro-Provost (Regional Communities), a role focused on addressing regional inequalities. This helps build UCL’s capacity to develop impactful partnerships with a range of collaborators and actors outside London, including via regional networks and community bodies. Through such partnerships, we aim to quickly spread and develop the benefits of ideas developed in London or in national networks across the country.
There is a relative concentration of UK R&D funding in the Greater South East. Analysis by UCL for the Higher Education Policy Institute found that the concentration of research funding is conspicuous internationally, at the level of continents, countries, regions and subregions. However, the level of research concentration in the UK is actually somewhat less than in other major research powers (Germany, the US and the EU).
Furthermore, there is a range of credible measures of regional R&D spend: investment in absolute terms (total funding), by funder type, and in relation to the size of the regional population, number of universities, regional GDP and more. Each lens reveals a different ranking of regions in terms of R&D funding levels. A holistic consideration of the geographic distribution of R&D funding would therefore benefit from a basket of R&D funding metrics, complemented by consideration of research outputs and outcomes.
Quality-related Research (QR) funding underpins universities’ ability to deliver research impacts by providing a predictable bedrock of strategic funding. This enables universities to invest in infrastructure (see case study 2, Box A) for research, innovation and commercialisation; pursue novel approaches to research and collaborations with a range of partners; provide stability for researchers’ careers; and so on.
The Research Excellence Framework determines the level of QR funding received by universities, which must demonstrate the social and economic impacts of their research. The allocation of QR therefore directs funding to universities with track records of delivering impacts for communities.
Similarly, Higher Education Innovation Funding (HEIF) is allocated to universities “with evidence of significant knowledge exchange performance and partnerships”, amplifying the impacts of these activities, “to have the greatest impact on the economy and society”.
These represent critical funding levers that maximise the impact of the UK research system described in this submission, and QR funding and HEIF should be prioritised in the 2025 Spending Review.
13 January 2025