Mind the gap: levelling up through innovation

Greater Manchester, with its outstanding research and innovation base, is ideally placed to lead a northern research and development (R&D) revolution, explains Professor Richard Jones.

The UK is a divided nation. In terms of economic productivity, London and the south-east are prosperous, but other parts of the UK – including much of northern England – are more comparable to eastern Germany, southern Italy or Portugal. If levelling up is to mean anything, those productivity gaps need to be closed.

This won’t just improve the prosperity and quality of life of people in those so-called ‘left-behind places’, like the industrial towns of the north-west that never recovered from the deindustrialisation of the 1980s and 90s.

It will help raise the whole country from the anaemic economic growth we’ve seen since the global financial crisis. The country as a whole can’t prosper when so many parts of it aren’t fulfilling their potential.

Economists agree that innovation – in its broadest sense – is the key to sustainable economic growth. R&D isn’t the only kind of innovation that matters, but it’s conspicuous that in those parts of the country that have the strongest economies – in London and the greater south-east – R&D spending is proportionately the highest. London, Oxford and Cambridge and their sub-regions account for 46% of all public sector R&D spending in the UK. In places like Cambridge, substantial state investment in research over the decades has been matched by even higher levels of business R&D, producing very successful knowledge-based economies.

Such imbalances reinforce existing economic divides. But now is the moment to change this. 

The government has committed to increasing the overall R&D intensity of the UK economy from the current value of 1.7% of GDP, which puts us between the Czech Republic and Italy in the global league table, up to the Organisation for Economic Co-operation and Development average of 2.4%. We must take this opportunity to ‘level up’ R&D spending, not by compromising existing centres of R&D excellence like Cambridge and Oxford – which are national assets – but by creating additional new centres to drive the knowledge economy elsewhere in the country.

In regions like north-west England, business spending on R&D is relatively high, but this isn’t supported by those public investments – in basic and translational R&D, and in creating trained people – that could build on existing private sector strengths and specialisations to create internationally competitive knowledge economies. We need to do things differently, using local knowledge to build on existing strengths in both the science base and the business environment.

As well as basic research, we’ll need to build up translational research, the diffusion of existing technologies into businesses, and skills development at all levels. The goal needs to be not just to create economic activity in city centres, but to help businesses grow and innovate across our metro regions, including in our economically struggling towns.

Greater Manchester – with its outstanding university research base, an evidence-based local industrial strategy, translational research centres like the University’s Graphene Engineering Innovation Centre, and a strong start-up/spin-out ecosystem – is ideally placed to lead on this kind of innovation-driven levelling-up, fulfilling its potential as a driver for the economy of the whole of the north.