Written evidence submitted by UK Research and Innovation (UKRI) (IGR0033)

UK Research and Innovation (UKRI) response to the Science, Innovation and Technology Select Committee inquiry into Innovation, Growth and the Regions

Introduction

1.      We welcome the Science, Innovation and Technology Committee’s inquiry into innovation, growth and the regions and we are writing to give the committee information on the role of UKRI in supporting the research and innovation system and driving growth in regions and clusters throughout the UK.

2.      Launched in 2018, UKRI is a non-departmental public body sponsored by the Department for Science, Innovation and Technology (DSIT) and the largest public funder of research and innovation in the UK. UKRI has responsibility for 45% of public research and innovation investment and works across government to maximise the impact of all research and innovation activity. UKRI brings together seven disciplinary research councils, Research England, which is responsible for supporting research and knowledge exchange at higher education institutions in England, and the UK’s innovation agency, Innovate UK. Together we connect discovery to prosperity and public good, enriching lives and enabling high productivity economic growth, job creation and high-quality public services across the UK. 

3.      UKRI invests in people, teams, places and infrastructure, strengthening the skills, organisations, and collaborations needed to explore and develop game-changing ideas within and across disciplines. We build and tune a portfolio of investments with aligned incentives to capture the benefits of research and innovation for the UK, tackling challenges from climate change to healthy aging, and harnessing the opportunities from new technologies from AI to engineering biology. UKRI works with our many partners and stakeholders to shape a dynamic, diverse and inclusive research and innovation system that gives everyone the opportunity to participate and to benefit, enriching lives locally, nationally and internationally.

How does the Government drive research and innovation in our regions?

4.      As a non-departmental public body sponsored by DSIT, UKRI receives a DSIT-allocated budget, manages programmes on behalf of DSIT and delivers additional funding across government and beyond. UKRI investment in research and innovation helps meet national priorities and create value for money to taxpayers.

5.      One of six strategic objectives within the UKRI Strategy 2022-27[1] is World-Class Places. We have committed to: 

• enhance connections across research and innovation, involving a broader range of people, organisations and businesses in the design and development of activities.
• strengthen research and innovation clusters in key locations across the UK by connecting people, ideas and sectors, to build partnerships and businesses, attract investment, drive growth and create jobs.
• invest in high-quality projects to grow R&D strengths, attract private investment, boost innovation diffusion, and maximise the combined economic impact of R&D institutions.
• deliver economic, social, and cultural benefits from research and innovation to all UK citizens, including by developing research and innovation strengths across the UK.

6.      One of our five strategic themes is Creating Opportunities, Improving Outcomes, with the mission to improve outcomes for people and places across the UK by identifying solutions that promote economic and social prosperity, including economic growth and innovation​; addressing health inequalities​; and promoting community connectedness. For example, the Trial Accelerator Fund supports innovative approaches to regional growth by rigorously evaluating the effectiveness of interventions aimed at spreading opportunities and reducing disparities in economic, health and social outcomes for people and places across the UK.

7.      In developing and delivering our strategy we have drawn on extensive engagement with research and innovation stakeholders, including businesses, research organisations and civic authorities, and a wide range of evidence, including our own data, the UKRI commissioned report on Evidence of what works: research and innovation (R&I) and place published in 2022[2] and evidence from the Innovation and Research Caucus[3], which we fund.

8.      Our approach to investing for places covers engagement, investment and impact. These aspects of place are interdependent, and all are important for maximising our impact. In terms of engagement, UKRI works with hundreds of research organisations, including 142 universities and more than 60 institutes and national laboratories; thousands of businesses; and dozens of civic authorities across the UK, including Mayoral Combined Authorities in England; and Devolved Nations.

9.      UKRI invests across the UK and publishes statistical data on the geographical distribution of our funding[4]. Unpublished data show that investment in the UK outside the Greater South East has shown absolute and relative increases over the past three years and that in 2023-24 UKRI invested more money in the UK outside the Greater South East than within the Greater South East. (Noting that this does not reflect investment by the Devolved Nations through their respective national funding bodies, which is outside UKRI’s remit.)

10.  In addition to supporting wider Government ambitions to foster research and innovation across the UK, we also work closely with local government to ensure the best outcomes are seen at the regional and local level. One way that our approach to investing in places is demonstrated is through Innovation Action Plans, which aim to increase innovation capability and capacity in local areas building on their strengths.

How does research and innovation in our regions drive growth and prosperity in those regions?

11.  R&D-active sectors are at the heart of high-value job creation and economic growth. To grow capacity to perform research and innovation across the country and deliver on our strategic objective of strengthening clusters and partnerships we must leverage the entire research and innovation system to deliver transformational outcomes.

12.  UKRI, through its constituent councils, invests in a wide range of programmes and activities. These include research and development grants, skills and training, infrastructure, institutes and centres, and block funding to higher education providers in England. While a subset of these investments is explicitly place-focused, all of UKRI’s investments have the potential to have impacts in their location and more widely.

13.  While it is not the only driver of our investment, there is often a rationale for investing in regional strengths and priorities, for example through the Strength in Places Fund and Innovation Accelerators programme. Similarly, thematic strategic programmes build on regional strengths, for example the National Quantum Technologies Programme across the Scottish central belt, which is also a priority area in the Scottish Innovation Strategy.

14.  UKRI’s place-focused activities are complemented by research and innovation programmes, which are also important for regional innovation and local growth. UKRI activity is described in the following sections with the common theme that they are most effective where they complement each other, and we encourage our investments to collaborate with partners to deliver impact at a local, regional, national and international level.

1. Place Partnerships

15.  The Strength in Places Fund (SIPF) aims to grow local economies across the UK through building on existing strengths in research and innovation by combining excellent research with high-quality business innovation. Projects focus on areas of local business strength, in both urban and rural settings, with demonstrable potential future growth. Projects identified a self-defined area anywhere in the UK, not limited by nations or regions.

16.  To date, £312m has been invested in 12 projects[5], each driven by a consortium of businesses and research organisations. This has leveraged £200m of investment from the private sector and other partners and enabled the creation of nearly 1,500 jobs and 150 new products and services. The funding is flexible and is collectively managed by each consortium to maximise impact. The long-term nature of the funding allows new skills creation from apprenticeships to PhDs and the size of the projects brings international recognition.

17.  SIPF projects include decarbonisation of maritime transportation in Northern Ireland, developing advanced machinery industries in West Yorkshire and Greater Manchester, supporting the compound semiconductor industry in South Wales, boosting creative industries in Bristol and Bath, and growing Kent and Medway as the UK’s leading region for climate-smart food production and processing.

18.  Another approach to partnership was taken by the £100m Innovation Accelerator programme developed with DSIT, which is investing in 26 R&D projects to accelerate the growth of three high-potential innovation clusters: Glasgow City Region, Greater Manchester and West Midlands. The Innovation Accelerator programme is demonstrating impact through its co-delivery approach, with the co-investment delivery target of 1:1 already achieved. The programme extension announced in the October budget will continue to bolster these high-potential innovation clusters. Co-creation with local leaders has been at the heart of this approach, ensuring a strong local voice in deciding priorities and aligning investment with wider growth plans.

19.  Each city region has been supported by UKRI and DSIT to develop their unique strategy. Glasgow City Region is seeking to boost venture capital investment in key growth sectors, including advanced manufacturing, space, and precision medicine. Greater Manchester will lead the way in sustainable advanced materials and manufacturing, digital and tech, health innovation, and technology to become carbon neutral by 2038. West Midlands will accelerate R&D and innovation strengths in green technologies and improved personalised and digital healthcare, diversifying its economy while boosting supply chains and creating new local jobs. Alongside the Innovation Accelerators, the Further Education Innovation Fund pilot programme, supports Further Education Colleges in the three regions to establish Local Innovation Centres, which focus on key regional growth sectors.

20.  Local Policy Innovation Partnerships are a £23m programme that builds partnerships between universities, local authorities, and businesses to harness the power of research and innovation and co-develop solutions for regional challenges. They bring together Devolved Nations, local authorities, local businesses and local communities to harness the power of research and innovation in addressing local challenges. The partnerships will drive sustainable and inclusive economic growth and reduce regional disparities in the UK. They include a project in Yorkshire supporting growth of jobs and inclusive entrepreneurship; fostering inclusive rural economies in Wales; leveraging natural resources for economic growth in Scotland; and boosting skills and employment in Northern Ireland.

2. Talent

21.  UKRI’s investments in people and skills support the highly skilled research and innovation workforce across the UK, bringing benefits across the country. Through doctoral training grants, UKRI currently supports around 5,500 doctoral student starts each year and around 20% of all doctoral students in the UK. An increasing proportion of UKRI-funded studentships have supported doctoral students based outside the Greater South East, rising from 56% in financial year 2015-16 to 59% of UKRI-funded doctoral students in 2023-24.

22.  In a typical recent year, UKRI funds approximately 2,000 fellows to pursue their research and innovation ideas. The number of active fellowships grew in every region of the UK between 2015-16 and 2023-24, and within this period fellowships outside the Greater South East increased by 67% (compared with 38% within the Greater South East). The highest growth in fellowships was seen in Northern Ireland (317%), North East Engand (252%), Wales (150%), Yorkshire (85%), and the West Midlands (76%).

23.  UKRI collaborates with national, devolved, and local government, to embed some of these fellows into government. These early to mid-career academics (from a cross-section of UKRI disciplines) contribute in various ways, such as advancing research on economic growth and promoting regional prosperity. This includes embedding fellows in local and regional authorities to support them articulating their research and innovation requirements to the R&D sector.

24.  In addition to research and/or innovation, another important feature of a fellowship is the commitment to continued professional development and the enhancement of leadership skills. UKRI Future Leaders Fellows have access to The Future Leaders Fellows Development Network which delivers specialised leadership training, access to networks and mentors, and collaborative opportunities so that fellows can pursue world-class interdisciplinary, cross-sector research and innovation. The network is run by a consortium of partners, including representatives from all four nations of the UK with care taken to ensure that in person activities are held in diverse geographical locations thus ensuring that researchers and innovators with enhanced skills are distributed across the UK.

25.  UKRI’s strategic support for talent enables regional economic growth by developing critical specialist and technical skills to support growth industries, for example:

• The Centre for Doctoral Training in Photonic Integration and Advanced Data Storage, in partnership with Seagate Technology, Queens University Belfast, the University of Glasgow and the Northern Ireland Department for the Economy has increased the supply of trained scientists and engineers in industrially-relevant technology and helped lay the foundations for the region’s photonics ecosystem, which has led to significant further investment through the Strength in Places Fund and led to 60 new R&D positions in Northern Ireland.
• The Catapult Network develops workforce skills at a range of levels to capitalise on regional R&D strengths. The High Value Manufacturing Catapult is a significant provider of apprenticeships at centres nationwide, including the AMRC Training Centre at the University of Sheffield[6] which since 2013 has worked with 400 businesses, delivered more than 1,700 apprenticeships and provided continuous professional development to upskill and reskill existing workforces.
• Knowledge Transfer Partnerships[7] facilitate academic and business collaboration by placing highly qualified graduates in businesses. From 2010-2020, the KTP scheme generated an estimated £1.7 to £2.3bn in net GVA for the UK economy and projects were distributed across the UK, with 75% of beneficiary businesses being outside the Greater South East.

26.  UKRI also directly employs 5,877 people in direct science facing roles at sites across the UK including Daresbury Laboratory in Cheshire and Boulby Underground Laboratory in North Yorkshire.[8]

3. Research and Innovation Infrastructure

27.  The UK has a wide range of research and innovation infrastructures, including the Catapult Network, which brings together nine leading technology and innovation centres spanning over 65 locations across the UK in sectors of strength; and UKRI institutes such as Henry Royce Institute (Manchester), British Geological Survey (Cambridge), and the Creative Industries Policy and Evidence Centre (Newcastle and London). A survey of the UK’s infrastructure landscape revealed that over three quarters of infrastructures conduct work with UK businesses[9].

28.  We also fund programmes, such as the UK Research Partnership Investment Fund, which will have provided capital funding to 60 state-of-the-art research centres and facilities in universities across the UK by the end of 2024-25. Since its launch in 2012, UKRPIF has invested £1bn in 60 projects across the UK, securing £2.5bn return from private sources, including £992m from industry. As well as increasing capacity and capability for world-class research, these investments incentivise and facilitate new partnerships with private and third sectors and increase commercialisation of research outputs[10].

29.  Catapults bridge the gap between academic research and industry, enhancing collaboration, skills, and supporting adoption of cutting-edge technology and innovation. Catapults offer a unique combination of facilities and expertise which support SMEs to test out and assess benefits of new technology or innovative processes that otherwise they would not be able to take a risk on. Catapults also work with larger businesses to connect them to innovators, to trial potentially disruptive innovations in a safe but realistic environment. This enables those businesses to build the internal business case for significant investment in adoption, driving innovation through their supply chains, and opening a new market for innovators. Driving adoption of transformative technology is an inherent element of the Catapult model, especially in Catapults such as Satellite Applications Catapult and Compound Semiconductor Applications Catapult.

4. Research and Innovation Campuses

30.  Our research and innovation campuses, centred on research and innovation infrastructure, offer unique environments where companies can access and collaborate with specialist facilities and research expertise, thereby fostering early-stage innovation, attracting private investment and accelerating excellent research into tangible social and economic benefits.

31.  Examples include Harwell Science and Innovation Campus, Sci-Tech Daresbury, Norwich Research Park, Easter Bush Campus (Edinburgh), Babraham Research Campus (Cambridge), Rothamsted Enterprises (Harpenden) and AberInnovation (Aberystwyth). While these campuses have a local footprint, they are at the heart of research and innovation clusters, so that the campuses add significant value to the regional, as well as national and international, innovation system.

5. Commercialisation

32.  UKRI is uniquely placed to invest in innovative ideas, from discovery science through to commercial opportunities, in order to improve economic performance, support future economic growth, improve public services, create high quality jobs, and improve social wellbeing. UKRI supports innovation, impact and commercialisation through funding, systems and policy.

33.  As already described, UKRI funds partnerships, talent, infrastructure and campuses that are vital for commercialisation as well as dedicated commercialisation programmes, for example:

• Launchpads support clusters of small and medium sized enterprises and the most innovative businesses to progress their ideas toward commercialisation, contributing to local economic growth. Each of the eleven Launchpads has been developed in collaboration with local leadership to strengthen innovation in targeted regional clusters across the UK.
• The Creative Industries Clusters Programme brings together world-class researchers and innovators with companies and organisations from across the UK’s four nations in a first-of-its kind research and development investment. The clusters draw from some of the UK’s best performing and world-renowned creative companies, from the screen industries and digital storytelling to fashion and video games. It brings businesses, organisations and the UK’s world-class universities together to ensure the creative industries continue to flourish.
• UK Innovation and Science Seed Fund (UKI2S) is a national seed investment fund of over £110m that nurtures innovative businesses to leverage private investment and grow jobs. UKI2S is backed by a number of public bodies, including UKRI and DSIT. UKI2S is a driving force in supporting early-stage innovation and high impact businesses, providing long-term, patient capital to early-stage technology start-ups emerging from the UK’s publicly-funded science and knowledge base.
• Place-Based Impact Acceleration Accounts combine some of the country’s leading engineering and physical sciences research with the ambitions of civic bodies and local business to enhance a region’s economic capability. They target established clusters with potential to expand, and emerging clusters with capacity to develop.

34.  UKRI supports the commercialisation system through enabling research organisations to customise their approach to commercialisation according to their location. The Higher Education Innovation Fund and Impact Acceleration Accounts enable a flexible and timely response to commercialisation opportunities. UKRI also supports commercialisation through a range of policy-related initiatives, including taking action in response to the independent review of university spin-out companies around sharing best practice, sharing tech transfer capability and better data.

How is research and innovation diffused or supported to drive productivity and growth in the regions, wherever it may come from?

35.  The report on Evidence of what works: research and innovation (R&I) and place[11] examined the relationship between investment in research and innovation and place, and what might be done to help investment in research and innovation to contribute to better place-based outcomes. Findings demonstrated that the extent to which research and innovation investment leads to positive local socio-economic outcomes seems to depend on localities’ attributes with regard to:

• the presence and behaviours of the components of an innovation ecosystem.
• the links between those components.
• the creativity/capacity of local leadership. 

36.  In practice, each of these elements needs to be performing well for an effective regional research and innovation system, and there needs to be as much attention on connectivity and local leadership as there is on the presence of research and innovation activity.

37.  A recent UKRI blog[12] stated that ‘Interconnections are one of the defining features of research and innovation clusters. In practice, clusters can be defined around population centres, research infrastructure or more flexibly to reflect the geographies of specific business sectors and technologies. Investing in clusters of expertise has consistently been shown to help boost local and regional innovation and productivity, which in turn can have a reinforcing effect in terms of attracting talent and private sector investment.’

38.  While the development of clusters is desirable, this should be balanced with an understanding that clusters can take a long time to form, the geography of clusters is hard to define and that the formation of clusters in themselves lead to inequalities of investment and outcomes between places. In the longer-term, clusters must evolve to remain competitive.

39.  There should also be connectivity between clusters and regions to enable mutual learning and development. This should be built on a collective understanding of both regional and national strengths, combined with inclusive collaboration within regions to develop and champion regional ambitions and strengths, informed by intelligence on the national and global context.

40.  UKRI invests in research that contributes to our understanding of the factors that drive local growth, for example the What Works Centre for Local Economic Growth synthesises evidence on effective policies and interventions for local economic growth and The Productivity Institute has created Regional Productivity Forums, to deliver tailored, actionable advice on improving regional productivity through key drivers such as workforce skills, technological adoption, and organisational practices.

41.  We are developing our plans for the next Spending Review period with DSIT and civic authorities including Mayoral Combined Authorities, which include a programme of partnership working with places to build on research and innovation strengths and increased consideration of place across our portfolio of investments. We will continue supporting excellent research and innovation in every part of the UK to deliver our vision for an outstanding research and innovation system.

42.  We also want to empower people and places to define and articulate their research and innovation needs and priorities. This will include learning from the Community Research Networks[13], which are designed to build capacity, capability and connectivity for community-led research in places.

43.  UKRI is committed to delivering its strategic objective of world-class places while addressing the government’s missions, including kickstarting economic growth in every part of the UK. Every region of the UK will have its own blend of strengths to build on, which can be best achieved through a connected research and innovation system across the UK. One example of this is the joint and aligned activity between Sci-Tech Daresbury and Liverpool City Region.

15 January 2025

About UKRI

Launched in 2018, UKRI is a non-departmental public body sponsored by the Department for Science, Innovation and Technology and the largest public funder of research and innovation in the UK. UKRI is nine councils working individually and collectively across all disciplines and sectors. Together we connect discovery to prosperity and public good, enriching lives and enabling high productivity economic growth, job creation and high-quality public services across the UK.

UKRI invests in people, teams, places and infrastructure, strengthening the skills, organisations, and collaborations needed to explore and develop game-changing ideas within and across disciplines. We build and tune a portfolio of investments with aligned incentives to capture the benefits of research and innovation for the UK, tackling challenges from climate change to healthy aging, and harnessing the opportunities from new technologies from AI to engineering biology. UKRI works with our many partners and stakeholders to shape a dynamic, diverse and inclusive research and innovation system that gives everyone the opportunity to participate and to benefit.