Written evidence submitted by Connected Places Catapult (IGR0065)
SIT Select Committee
Call for Evidence – Innovation, Growth and the Regions
Introduction
The Connected Places Catapult is the UK’s innovation accelerator for cities, transport and place leadership. We work with businesses, knowledge partners, and public bodies to bridge the gap between discovery and the market so that the opportunities of innovation can be adopted and scaled in communities, towns, and cities across the country.
We are part of the Innovate UK Catapult Network of nine technology and innovation centres providing world-class R&D facilities and technical expertise to support UK business innovation.
1. How does the Government drive research and innovation in our regions?
The government is driving research and innovation across the UK through the Innovate UK Catapult Network, supporting over 1,000 projects from concept to commercialisation and over 18,000 businesses, with 11,0000 being SMEs. Catapults work in partnership with national, regional and local governments to enhance public services and tackle a diverse range of national challenges.
The Connected Places Catapult, alongside the wider Catapult Network, welcomes efforts to further strengthen local innovation ecosystems and stands ready to support thinking in this area, drawing on our extensive partnerships across the country. This is includes aligning with the government’s strategic priorities through the Industrial Strategy, as well as supporting the development of Local Growth Plans, ensuring beneficial outcomes for local communities. We are actively working with local and combined authorities, as well as the wider Catapult Network to support the development and delivery of Local Growth Plans across the country.
We are already making a significant contribution to the government’s efforts to support the innovation ecosystem across the UK’s regions by working in partnership with local and regional leaders via the West Midlands Innovation Accelerator, Innovation Place Leadership Academy, Innovation Procurement Empowerment Centre, Freeport Innovation Network, the UK Innovation Districts Group and the Freight Innovation Fund.
Critical to this is the Catapult model, where we have established ourselves as a respected, neutral convenor of innovation partnerships across multiple UK city regions. For example, prior to our current work on the West Midlands Innovation Accelerator (see question 2 for more details), in Belfast we helped the city region secure the largest ever City Deal worth £800m+ by convening a new a partnership of both stakeholders and assets, preventing a zero-sum competitor approach, and pioneering a holistic approach to innovation collaboration.
We have also played a leading role in supporting the Liverpool City Region in developing a Maritime Innovation Action Plan framework by convening the regional industry cluster, local authorities, businesses, universities and community stakeholders. Liverpool has now made maritime one of its four key focus areas, Liverpool John Moores University is launching a Global Maritime Innovation hub, and we have also supported international innovation partnerships with South Korea to bring new investment into the region. We have also led work to establish a consortium for a Liverpool-Belfast Green shipping corridor with 40+ follow on projects being discussed with private investors from India and the USA.
The leadership role of local government
The above examples speak to both the opportunities and challenges at the local and regional level - capacity to deliver innovation-led growth is unevenly distributed across combined and local authorities. The fiscal pressures on local authorities mean that many economic growth departments in local authorities face resourcing limitations, limiting both local areas and the UK’s broader ability to achieve innovation-led productivity and growth objectives.
Without building innovation capability at the local level there is a danger that the gap between innovation rich and experienced regions, and those regions with untapped potential will grow. Yet scale and alignment is critical for successful innovation outcomes. Place-based interventions therefore play a pivotal role in the success of the innovation economy in which investments will deliver a weak return if the places in which they are based are not optimised.
If Local Growth Plans for example are to avoid unnecessary fragmentation, competition or duplication they need to not only describe how places will deliver sectoral improvements in support of the national growth mission, but also place-based transformations in the physical, digital and civic fabric of the place to support a flourishing innovation economy. This is critical if local leaders are to deliver excellent transport connections and digital infrastructure, increase access to affordable homes and other social infrastructure to support a growing population, and create a high-quality public realm which attracts and retains talent.
The Connected Places Catapult understands the challenges of working across organisational and geographic boundaries. That is why we have worked with the Royal Society of the Arts (RSA) and Core Cities in making the case for investment in local and regional leadership capability building. Through our own work with place leaders across the UK (e.g. the Innovation Places Leadership Academy, the UK Innovation Districts Group, the Freeport Innovation Network), we have provided practical support to those seeking to deliver innovation-led local growth.
Digital & data leadership
It is also important to recognise the role of government in removing the barriers to sharing data to improve business operations and decision making. Government plays a leading role in reusing public sector data by adopting the principle of “collect once, use many times,” treating data as essential infrastructure. It should incentivise data sharing to unlock regional and sectoral potential while aligning policies with global best practices and market standards. Public sector data sharing, including the proposed National Data Library, should be prioritised as a driver of innovation and growth.
Improving data literacy and capabilities within businesses will enhance their use of data across supply chains, foster collaboration, and strengthen competition in data-driven markets. These efforts will ensure the UK’s public and private sectors thrive in an increasingly data-driven economy. It is also important to adopt a standardised approach across government, industry, academia and Catapults. A decentralised approach to data sharing infrastructure is vital for unifying fragmented systems across transport, energy, and water, reducing costs and boosting productivity.
Connected Places Catapult and the Catapult Network have proposed to Government a UK Data Sharing Hub that will lead to a minimum necessary Data Sharing Infrastructure to enable data to flow securely across sectors.
This will:
Unlocking innovation in procurement
As the 2023 Procurement Act comes into force, the Connected Places Catapult is also playing a leading role in supporting local leaders from both the public and private sector to unlock more innovation in the way that the public sector buys its services. We are doing this via the Innovation Procurement Empowerment Centre (IPEC).
Much of the spend in product and services in transport, cities and the built environment is dominated by public bodies, and the public sector in the UK spends around £400bn per annum on public procurement. Despite this spend, the need to continuously deliver more for less given the fiscal pressures on local, regional and central government is paramount.
Through technological advances, we are seeing incredible examples of innovation in the UK through the creation of new suppliers from academic spin-outs, small and medium sized businesses (including start-ups), scale-ups, venture capitalists, accelerators, corporate innovation teams and many others. These diverse suppliers are helping to achieve better, cheaper and quicker outcomes and create more value from the £400bn spent per annum. If just 5% of public sector contracts were brought to market in this way, it would transform £19bn of existing spend into innovation fuel annually.
IPEC is helping local leaders to understand and use this approach, and in doing so reform how the public sector shapes markets by not only delivering public policy outcomes, but also creating new businesses that could be exporting services across the world. The Connected Places Catapult’s IPEC network is supporting public sector buyers and sellers in the market to unlock economic growth by:
Greater transparency of spending in the public sector, and early indications of the opportunities for innovation, are both vital. This will provide a signal to the market on where to invest R&D efforts at an early stage so that when the public sector is looking to procure it increases the chance of bringing in innovative solutions more readily. To do this it is important that the government supports investments in local and national capability building programmes, such as IPEC.
In supporting IPEC, government also has a role to play in promoting procurement as a powerful tool rather than a barrier to innovation. This includes supporting efforts by central government departments and their agencies to publish pipelines of forward spend which can inspire private sector R&D investments in anticipation of future contract opportunities, as well as requiring a growing share of departmental and devolved spend on goods and services to be brought to market using innovation-friendly mechanisms.
2. How does research and innovation in our regions drive growth and prosperity in those regions?
Regional innovation hubs and clusters
Catapults are strategically placed to bring the innovation ecosystem together and support business pathways from start-up through to scale-up. Whilst Catapults are national capabilities, the impact they produce is felt in all regions of the UK where they operate.
The Catapult model enables local leaders to create clusters of excellence by leveraging local strengths, place-based innovation capabilities and resources to stimulate co-innovation initiatives and agglomeration benefits that drive regional growth and prosperity. Recent research in 2023 confirms that SMEs grow up to 50% faster after engaging with Catapults. Support from Catapults leads to 16% higher growth in output (turnover and employment) for businesses within six years of receiving Catapult support.
Below are some examples of work that the Connected Places Catapult is delivering as part of the West Midlands Innovation Accelerator programme, as well as supporting the work of the UK Innovation Districts Group.
Example - West Midlands Innovation Accelerator
DIATOMIC and Clean Futures have enabled the region to access circa £10m (need to verify exact amount) of new innovation support funding and apply it in a bespoke way to support the realisation of strategic objectives such as cleantech, decarbonisation and net zero ambitions, as well as public sector reform.
DIATOMIC has supported 43 SMEs and created 6 new jobs. Two international MoUs have been signed between regional cluster bodies and South Korean counterparts with two international showcases held. £0.5m has been generated by SMEs through a UK accelerator initiative with 80% of those SMEs now confident in regional expansion. Six conditional offers have also been made for international clean tech SMEs to invest in the region. In addition, 20 academics have been involved in university exchange programmes between the UK and South Korea, a digital twin has been created as an asset for the region and beyond, plus an inclusive innovation protocol has been developed to guide and educate the ecosystem around equitable fairness to the regions people, places and sectors.
Clean Futures has seen 20 SMEs accelerated through 20 trials completed, 16 of the 20 SMEs progressing TRL levels. This has resulted in £29.1m secured co-investment and £14.3m private investment, plus £48.7m aggregated pending contract values. 38 jobs have been created and 10 patents are in progress.
Example - Regional Logistics & Distribution
In the West Midlands we are also playing a leadership role as the cluster body for Logistics & Distribution in the region. In partnership with the West Midlands Combined Authority (WMCA) we established the West Midlands Logistics & Distribution Cluster, designed to drive innovation and growth in the region’s logistics and distribution sectors. The aims of this cluster are in line with the vision set out in the West Midlands’ economic strategy – through the existing Plan for Growth and emerging Local Growth Plan. The cluster is supporting efforts to leverage investment, create more high paying jobs, upskill the existing workforce, reduce unemployment, and foster an innovate approach to tackling issues faced across the wider industry and ecosystem development.
Innovation districts
Innovation districts act as localised engines of growth that stimulate investment, create jobs, propel productivity gain and provide essential support to emerging and frontier sectors. By fostering localised ecosystems that bring together industry, academia, and government, these districts drive forward Government’s mission of strengthening key sectors such as AI, green technology, and life sciences, while addressing regional inequalities and promoting inclusive, place-based economic development. They are essentially hotspots (e.g. science parks, research campuses etc) for operating at a tighter scale with intense density, connectivity, activity and heightened trust thereby super charging innovation outputs and outcomes. They represent a proven delivery model for place-based, cross-sector innovation.
The Connected Places Catapult works closely with the UK Innovation Districts Group UK which encourages more focus of the role that innovation districts play within wider regional clusters. This also includes exploring how these locations can be better connected with and between different regional clusters as part of scaling innovation and developing more productive and inclusive growth within (and between) sectors.
Boosting regional cluster growth
Cluster growth in the UK requires a more standardised framework approach which recognises the importance of place. As local clusters are identified through Local Growth Plans, these may not align to evidence-based policymaking from Whitehall on current capability. Local leadership will identify clusters that look to future potential and opportunity. There will be a need to curate the top-down and bottom-up approach. A top-down approach risks centring clusters in established places while a bottom-up approach risks fragmentation or duplication.
Catapults can play a key role on the curation of a middle path by working closely with local partners to align cluster approaches across the UK. This work should look to provide a neutral convener to provide scale and critical mass. Alongside this, it is important to establish common frameworks for cluster delivery. This will allow clusters in different parts of the UK to use aligned methodologies to create scale.
Successful frameworks for measuring, mapping and monitoring clusters include:
3. How is research and innovation diffused or supported to drive productivity and growth in the regions, wherever it may come from?
To ensure innovation investments drive productivity and growth across the UK, targeted, place-based strategies are essential. Local Growth Plans for example need to not only describe how places will deliver sectoral improvements in support of the national growth mission, but also place-based transformations in the physical, digital and civic fabric of the place to support a flourishing innovation economy. This includes strengthening partnerships between universities, businesses, and councils to ensure ideas translate to market-ready solutions, as well as place-based assessment frameworks that can track productivity metrics, commercialisation rates, export performance, and growth in high-value sectors.
Catapults provide a unique combination of cutting-edge research and development facilities and world-class technical expertise to support UK business innovation. The Catapult Network, which encompasses nine sector-based technology and innovation centres and operates from more than 65 locations across the UK. Catapults have grown to become a critical element of Innovate UK’s portfolio of products and services, where the application of research is accelerated, and where new technologies are further developed, scaled up and realised. We provide businesses with access to their expertise and facilities, enabling them to test, demonstrate and improve their ideas, de-risking research & development and driving commercial opportunities.
The Catapult model specifically supports technology diffusion and drives both national and regional growth by fostering business-led innovation, enhancing supply chains, and building regional capabilities. Robust econometric evaluation has shown that the small and micro businesses that have received support from a Catapult gained up to 40% additional employment growth and more than 50% additional turnover.
Since 2013, Catapults have delivered over 18,000 industry and 5,500 academic collaborations, working as key partners across the UK innovation ecosystem. A £1.6 billion Innovate UK investment in Catapults is projected to return an additional gross value add of £7.7 billion to the economy by 2028.
As mentioned in the answer to question 1, the Connected Places Catapult is a national resource and neutral convenor in the marketplace for applying a placed-based, challenge-led lens to local and regional interventions.
24 January 2025