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John Dodds Director of Innovation Department for Business, Innovation and Skills

Developing Government policy: Innovation and Research Strategy for Growth and the Industrial Strategy. John Dodds Director of Innovation Department for Business, Innovation and Skills. Recessions and how they compare. Source: National Institute of Economic and Social Research, 2011.

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John Dodds Director of Innovation Department for Business, Innovation and Skills

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  1. Developing Government policy: Innovation and Research Strategy for Growth and the Industrial Strategy John Dodds Director of Innovation Department for Business, Innovation and Skills

  2. Recessions and how they compare Source: National Institute of Economic and Social Research, 2011

  3. “In the future we will not be able to compete on the world stage with low labour costs or by exploiting vast reserves of mineral resources. We will have to compete with our brains and with our science.” Sir Paul Nurse ‘The New Enlightenment’ Richard Dimbleby Lecture February 2012

  4. Six pillars of growth • ‘Hard’ infrastructure and long-term investment • Banking for the real economy • A new industrial strategy • The knowledge economy: ‘soft’ infrastructure • Being open for business • Supply side reform.

  5. The role of Government • Innovation and technological leadership • Public sector seed capital to leverage private investment • Skills • Supply chains • Public procurement

  6. Innovation The Government's growth strategy is central to the UK's economic recovery and its competitiveness. The commercial exploitation of innovation is a key element of this strategy.

  7. Innovation and Research Strategy for Growth • Launched 8th December 2011 • Supported by BIS Economics Paper – provides analysis to underpin the policy document

  8. Seven key lessons from the Innovation and Research Strategy Economics Paper Lesson 1: Innovation is pervasive. UK data shows high levels of innovation and low variance across industries. Highly innovative firms are found in all industries and regions. Proportion of innovation active enterprises in the UK, by sector (2006 – 2008)

  9. Seven key lessons from the Innovation and Research Strategy Economics Paper Lesson 2: UK R&D performance is uneven. In terms of R&D, the UK performs relatively strongly in small high tech sectors, and relatively poorly in large low tech sectors. R&D expenditure in businesses as % of gross value added, annual average (2003 – 2006)

  10. Seven key lessons from the Innovation and Research Strategy Economics Paper Lesson 3: Non-R&D inputs are large, growing and central to innovation. Non-R&D inputs are larger than R&D across all industries. More than half of innovating firms do no R&D at all. Innovation expenditure in 2008 (proportions of total expenditure)

  11. Seven key lessons from the Innovation and Research Strategy Economics Paper Lesson 4: Universities and the innovation infrastructure interact well with industry. Evidence suggests close and productive links between the knowledge infrastructure, as a whole, and business. Take-up issues may be more on the side of business. Degree of academic-business engagement across types of interaction in the UK

  12. Seven key lessons from the Innovation and Research Strategy Economics Paper Lesson 5: Cross-border value chains are increasingly important. Many products derive from cross-border collaborations. Shocks to production have major trade impacts. Innovation capability seems important to participation in global value chains. Location of cooperation partners (% of UK innovative enterprises with cooperation agreements)

  13. Seven key lessons from the Innovation and Research Strategy Economics Paper Lesson 6: UK’s science performance is strong. UK research quality is growing and the UK research base achieves the best value for money among the large economies, leading on all counts of papers, citations and highly cited papers per pound spent on R&D. Scienitific publication pattern

  14. Seven key lessons from the Innovation and Research Strategy Economics Paper Lesson 7: The public sector has a significant role in innovation performance. The public sector shapes the environment, generates technologies, innovates in services and procures products on a large scale. A strategic approach to procurement could target whole market areas that are important for the economy and ripe for innovation. Government as a purchaser, by sector

  15. Innovation and Research Strategy for Growth From this analysis four priority areas for policy emerged: • Driving research and innovation in all sectors of the economy: low- and medium-tech as well as high-tech • Creating a more coherent and integrated research and innovation system • Improving innovation performance by intensifying the roles of the science, research and information infrastructures • Ensuring that the public sector is a major driver of innovation

  16. Innovation and Research Strategy for Growth Discovery and Development • Recognises UK technology strengths and announces Catapult Brand for technology innovation centres. • Identifies synthetic biology, energy efficient computing, energy harvesting and Graphene as emerging technology areas. • Innovative Businesses • Details of £75m additional funding for Innovative SMEs including relaunch of Smart (grant for R&D), expansion of Small Business Research Initiative and Innovation Vouchers. • Details of expansion of R&D Tax Credit for SMEs and introduction of an ‘above the line’ Credit to encourage large company research and development. • £25m for large scale demonstrators by the TSB.

  17. Innovation and Research Strategy for Growth Knowledge and Innovation • New measures to support Clusters including TSB Launchpad and enabling multi-institutional bids to apply for research funding. • Confirmation of Chancellor’s announcement on EU VAT cost-sharing exemption to be extended to Universities and charities. • Details of £145m e-infrastructure funding and additional £13m for ARCHER phase II.

  18. Innovation and Research Strategy for Growth Global Collaboration • Strengthen EU engagement including access to EU funding. • Joint RCUK and Chinese MOST funding to undertake bilateral research projects • New Innovation challenges • Open Data Institute with Tim Berners-Lee and Nigel Shadbolt • New Research Councils ‘ Gateway to Research’ • NESTA UK Prize Centre and Prize Fund • More focussed work on public procurement including Centres of expertise and Public Private Procurement Compacts

  19. Focus on growth £100mfor Research & Innovation Campuses (2011 Budget) £50m to commercialise graphene ▪ £145m for high performance computing (October 2011) £200m of new science capital funding (Autumn Statement, 2011) Innovation and Research Strategy for Growth (December 2011) Wilson Review of University– Business Collaboration (February 2012) £300m UK Research Partnership Investment Fund (2012 Budget & October 2012)

  20. Industrial Strategy: Economics Paper • Why sectors matter • Describing sector performance • How to maximise long-term sectoral growth • How Government support can play a part

  21. Industrial Strategy: Key sectors Advanced Manufacturing • Aerospace • Automotive • Life Sciences Knowledge-intensive traded services • Professional / business services • The information economy • Further and Higher Education Enabling Industries • Energy • Construction

  22. Industrial Strategy: Horizontal strands Technologies: • Support emerging technologies, systematically identifying those with the most potential (working with TSB, Research Councils and Foresight). • Support longer term investment in research and innovation. Procurement: • Develop a coordinated approach to strategic procurement across the whole of government. Skills: • Deliver STEM and related skills pipelines to meet the needs of tomorrow’s economy. Access to Finance: • Proposing the set up of a government-backed institution to increase diversity in the supply of finance and institutions which provide a coherent relationship banking service to viable growing businesses.

  23. Thank you john.dodds@bis.gsi.gov.uk http://www.centreforum.org/assets/pubs/moving-from-the-financial-crisis.pdf http://www.bis.gov.uk/news/speeches/vince-cable-industrial-strategy http://www.bis.gov.uk/news/speeches/vince-cable-industrial-strategy-september-2012 http://www.bis.gov.uk/assets/biscore/economics-and-statistics/docs/i/12-1140-industrial-strategy-uk-sector-analysis http://www.bis.gov.uk/policies/innovation/innovating-for-growth

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