Funding geography - changes ahead?
For those of us in the innovation space, conversations tend to focus around new ideas, the latest startup to have a successful round of fundraising or new technologies and platforms that have died a death. The current discourse, however, is moving in a slightly different direction.
At Birmingham Tech Week 2020, I mentioned the UK’s stark regional differences of research and development (R&D) funding leveraged by innovators across industry and academia. Whilst this is not a knockout punch of brand new information, it does highlight a much wider conversation running through the UK Government at the moment – the importance of ‘place’ in innovation.
UK strategic vision
At present, the Government has four main objectives:
1) Economic recovery from Covid-19
2) Achieving Net Zero emissions
3) Levelling up regions across the UK
4) Becoming an economic superpower
The Government is heavily reliant on innovation to achieve this, with the hope that new technologies, world-beating businesses and associated improvements can drive the nation forward. ‘Levelling up’, a major Conservative ambition that has failed to-date, is especially interesting because it asks deeper questions about whether innovation is the right tool to achieve it.
Regional innovation in a nutshell
As a blog post, the aim is to avoid going into granular detail on the theory of regional innovation systems. The highlights are as follows:
- Increasing innovation everywhere could create a more productive nation and increase growth.
- Regions in economic and social distress could benefit from more jobs, could upskill and gain economic security.
- Promoting higher levels of entrepreneurship.
- Creating successful regional clusters between industry, academia and local government.
- Not every region has the capacity to absorb innovation (e.g. large levels of R&D funding).
- Competition between regions may not occur, creating inward-looking regions.
- May lead to over-focus on certain businesses.
What is the impact likely to be?
The UK Government has listened to various calls for a place based approach in R&D funding in order to generate more innovation across regions. Though affected by the Covid-19 pandemic, we should expect more focus on regional/local impacts of R&D on innovation, particularly as part of HM Treasury’s roadmap to economic recovery.
Not yet published, the Government’s R&D Place Strategy will centre on delivering social benefit and regional growth, with R&D as the main driver. But how that affects grant funding remains to be seen.
Will it affect R&D funding?
For Innovate UK grant applications, we can speculate that assessors may be looking at certain questions for well-evidenced knowledge surrounding the social benefits and regional impacts of innovations. At Grant Starter, we often see applicants struggle on questions that describe ‘wider impacts’ of their innovation, which would lead to them losing marks in their grant proposals. Often, the reasons for trying to avoid describing wider impacts are:
1) Applicants feel that they cannot claim any regional or social impacts from their innovation as it risks overstating an innovation’s potential.
2) There might be negative impacts from their innovation, which they do not wish to highlight.
However, we actively encourage anyone considering applying for R&D grant funding (especially Innovate UK) to think very carefully about both regional impacts and social benefits. Do your absolutely best to try and quantify and/or evidence your assertions. You might, for example, think ahead of time and consider how you will connect with business incubators, Local Enterprise Partnerships etc., building relationships with regional actors prior to submission.
Importantly, demonstrating awareness of negative impacts but framing them in a positive way tells assessors that you are giving an honest account of your innovation. Let’s face it – if it all looks rosy, people might get suspicious. A good example of a negative impact could be explaining that a new innovation might displace some jobs in a sector but will create a new market that will require resourcing as your innovation goes fully commercial.
We might yet see a change in the way R&D funding is distributed. This could be funding pots aimed at specific regions of the UK, competitions with geography-focused scope or requirements to interact with certain partners. This could be, for example, an extension of/similar to UK Research and Innovation’s Strength in Places fund but a full review of the competition’s impact won’t be conducted for some time.
For now, don’t expect wholesale changes until the R&D Place Strategy is finalised.