Yesterday Nesta published a report arguing that some parts of the UK have missed out on £4 billion of public research and development (R&D) funding each year, plus a further £8 billion of private sector investment. Some of these regions never fully recovered from the 2008 Great Recession, and COVID-19 threatens to deepen these divisions.
The Government’s target – set before the pandemic – called for the UK to increase investment in R&D to 2.4% of GDP by 2027, and by 3% in the future. The importance of this target is now greater than before. To meet it means empowering those regions with the lowest R&D intensity and recognising and supporting the vital role of universities and other partners in these regions.
Proposals in the report include devolving a substantial portion (25%) of the promised uplift in the R&D budget to nations, cities and regions, delivered through ‘Innovation Deals’.
The report also recognises how historic policy decisions have led to path dependency for regions, entrenching a set of ‘winners’ and ‘losers’. (This factor is missing in some – otherwise reasonable – recent reports which instead advocate building on existing centres of excellence). As the Nesta authors put it:
The current situation is the result of a combination of deliberate policy decisions and a natural dynamic in which these small preferences combined with initial advantages are reinforced with time.
Decisions made by previous generations of policymakers and politicians also play an outsized role in the UK’s industrial policy.
This excellent piece on efficiency and redundancy in the UK, and how we need more of the latter at the expense of the former to ensure resilience, is taken forwards nicely by Andy Westwood in this discussion of building industrial capacity in the UK. Building in redundant capacity is seen as a signature trait of a ‘resilient’ city or region. Andy sets out the case for starting with ‘national self sufficiency’ in health and manufacturing but then rapidly broadening out to other sectors, with a focus on impact at the local level. Movement towards autarky is a balancing act needing careful trade-offs, but there is a strong case for securing – or at least diversifying – supply chains in key industries and sectors.
The pandemic has drastically curtailed trade and investment; a return to previous patterns of international cooperation (which differ across UK regions) following COVID-19, and when trade picks up, is unlikely. More emphasis will be given to secure and resilient supply chains within the UK and near neighbours. This means strengthening industrial capacity and domestic manufacturing in the UK, and ensuring the provision of critical goods and services across the country – with clear implications for spatially-aware policymaking and an opportunity for rebuilding local economies.
These discussions neatly fit with a few themes I have touched on in recent posts – on how discussions over the smart city have morphed into ones about self-sufficient cities, on the risks of poor policymaking for resilience, and why popular narratives around ‘resilient communities’ are dangerous. See also this piece by Yorkshire Universities on The Coronavirus Pandemic: Universities and the Economic Recovery of Place.