Innovation support where next | EEF

Innovation support – where next?

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In the Autumn Statement last week the Chancellor announced additional funding for the HVM Catapult and a boost to the R&D tax credit – both of which are positive developments for innovation support – and we are looking to see these built upon in the Science and Innovation white paper when it is released shortly.

Specifically, we are calling for a long-term funding settlement for Innovate UK that enables it to maintain the breadth and scale of existing programmes, and grow the Catapult centres in line with the principles of the “one-third, one-third, one-third funding model”. This will include boosting the scale of schemes such as collaborative R&D, which support the competitive aspect of Catapult funding. This will be an important next step in building a stable, competitive innovation system.

We know existing support helps companies bring their new products and services to market, but – as the pace of innovation quickens – we cannot stand still. We must also ask what more can be done to help new technologies make it to market more quickly.

One key question is: how can the levers of government pull together so that new technologies discovered in the UK can be developed, commercialised and sold here as swiftly as possible.

One possible answer, raised in the Foresight review of manufacturing, is a more systems based approach to policy. The report argued that:

“Success [in manufacturing innovation] will require a ‘systems based’ approach that takes full account of the linkage between science, technology, innovation and industrial policies”.

In practice this means more integrated coordination by government across policy domains and government departments. A future policy system that ensures the most valuable new technologies are not missed – and not lost overseas – by working with researchers, industry experts and policy-makers so that government initiatives collectively support them.

The ideal outcome of such an approach would be to ensure that all of the necessary infrastructure, policy and regulation develops concurrently with new technologies so they can be delivered seamlessly to market; avoiding the kind of ‘systems failures’ that might affect the rapid emergence and uptake of new, cross-cutting technologies.

Systems based thinking: an example
A new technology (e.g. electric vehicles) might require new safety regulations and new infrastructure (e.g. electric charging points) in place if it is going to make it to market. A systems-based approach to innovation policy could ensure these are addressed concurrently.

So how do we get there? It’s worth noting that some of the mechanisms are already in place. The government’s current Industrial Policy approach represents a step towards more system-based thinking, for example, sector strategies identify the kind of new innovations sectors will be developing, and the support that might be necessary to bring them to market.

In addition, the High Value Manufacturing (HVM) Catapult Centre is – as the Foresight Review notes – a clear step towards a more systemic approach across research, innovation and industrial policy. Yet another reason why sustained funding for these centres is so important – you don’t bring a new system into being overnight.

However, a systems based approach can only work if all aspects of government pull together in the same direction. For example, while BIS is responsible for Industrial Strategy, it does not have responsibility for other all areas of government that are part of the system. Other departments must engage to ensure a coordinated approach to aspects of policy such as procurement and regulation.

Developing a more systems based approach to innovation support does not require revolution, but it will require thoughtful evolution. We’ll be developing our own thoughts on this further in the coming year.


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