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Understanding Cluster Growth Potential image

Understanding Cluster Growth Potential

The Innovation Caucus has just published its report exploring the future growth opportunities of place-based innovation clusters in the UK. This study was commissioned by Innovate UK. Download the full report here.

In support of Innovate UK’s continuing mission to enhance place-based innovation, the Innovation Caucus recently completed a report to understand the future growth opportunities of place-based innovation clusters in the UK, and developed a framework to explore what aspects of these clusters merit further investment to strengthen their contribution to GVA, and potentially also contribute to the levelling up agenda. 

Clusters are industry or sector specific. They comprise groups of firms and intermediary organisations involved in related activities, and the focus of inquiry is generally on understanding how the group benefits, and contributes to collective benefit, from positive feedback loops associated with collocation with each other. The inherently place-based nature and tendency to lead to increased innovation make clusters, and cluster strategies, attractive policy tools for both innovation and levelling up agendas. Our framework was developed based on a survey of the state of the art in identifying and measuring clusters. It also considered cluster evaluation as conditional on the state of evolution of a cluster and in light of previous and potential cluster growth trajectories. As innovation adoption sits alongside innovation output in successful clusters, the framework additionally proposes methods to evaluate the conditions that contribute to absorptive capacity.

The report surveyed three clusters selected in consultation with Innovate UK – East Midlands medical technologies, Solent marine and maritime, and Belfast cyber security. The cases were intentionally selected to be at different evolutionary stages, based on very different technologies and industries, and are located in different parts of the country. This enabled us to test and refine the framework across a diverse range of cases. 

Applying the framework demonstrated the importance of looking beyond the numbers to assess gaps and growth potential. Structurally, these clusters were very different with distinctive growth trajectories and emerging developmental opportunities. The marine and maritime sector in Solent is fragmented and contains what might be characterised as a number of subclusters (freight and logistics; naval defence; leisure craft and luxury vessel design, construction, and outfitting; cruise and marine hospitality; ferries and marine transportation; maritime engineering; marine ecology and biotechnology; and maritime law and regulation), rather than being a cluster itself. Many of these industries are looking to opportunities in net zero (around alternative fuels, production, and operations) and autonomous vessels as shaping their future markets and innovation strategies. By contrast, the medical technologies cluster in the East Midlands is a subcluster of the wider health and life sciences sector in the region. The cluster covers a range of activities (e.g. product development, contract manufacturing, contract research). Future market development will bring medical and digital technologies more closely together, with the potential for leveraging related digitals skills in surrounding regions. The cybersecurity industry in Belfast was regarded by most interviewed as a relatively nascent cluster. Looking to the future, there is both growing domestic and international demand for products and services with diversification opportunities in a variety of other technology specialisms such as fintech, machine learning and AI.

Given the differences in growth stages, core technologies, and cluster structures, it is no surprise that these clusters exhibited different strengths and weaknesses across the four domains surveyed (core assets, skills, knowledge exchange, and governance networks). However, there were some commonalities between them. For instance, each featured  relatively strong knowledge generation within local higher education and research labs, but these entities had lower than expected connections with the commercial R&D community. Skills and talent retention are an enduring challenge in all clusters. While each cluster had at least one industry or cluster association performing a convening and foresight role, all reported that these could be better resourced and supported to more effectively engage the cluster community.

While these insights were generated from a limited number of cases, they support an assessment approach that acknowledges and seeks to understand cluster- and place-specific gaps, challenges, and opportunities while also providing an evidence base to gauge national trends.

Next steps might include: 

  • Developing an evaluative framework for comparing different clusters based on the known information about their emergent characteristics and growth potential;
  • Developing a methodology to synthesise lessons across cluster case studies to inform national policy priorities and strategies. For instance, commonalities on skills pinch points seen across clusters could be aggregated to inform national skills and training policies.

 

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Innovation in Foundation Industries SMEs

Today the Innovation Caucus published their report exploring the innovation intentions of micro, small and medium sized enterprises (SMEs) in foundation industries (FI). Commissioned by Innovate UK. This study was commissioned by Innovate UK. Download the full report here.

Supplying core materials for use in manufacturing cement, paper, ceramics, metals, chemicals and glass, the foundation industries have a combined annual turnover of £67.5 billion, and with 250,000 workers, employ 10% of the UK’s manufacturing workforce. Playing a crucial role in the UK’s manufacturing supply chains, the foundation industries have potential for growth and innovation in the economic sector, and in considerations of the wider impact of their operations on the environment.

The Foundation Industries and Innovation
Despite their key role in the UK manufacturing economy, the foundation industries have seen a sharp drop in their share of UK GDP – declining by 43% between 1996 – 2016. Furthermore, innovation activity in the foundation industries is lower than in other nations. We have found that despite representing over 98% of the foundation industries, FI SMEs (firms with fewer than 249 employees) are less likely than larger FI firms to innovate, invest in research and development, or to adopt new technologies that benefit the environment.

We showed that medium sized FI SMEs report relatively high rates of innovation, while small and micro FI firms are less likely to have innovated over the past five years (a pattern replicated in spending on research and development, where fewer than 14.75% of small and micro FI firms reported spending over £100,000 p/a compared to over 50% of medium sized FI firms).

Our findings show that overly broad perceptions of innovation may be constraining growth and performance. Changes to FI firm products, processes, or practices tend to be driven by customer demand. In this context, ‘innovation’ is understood as adopting a new technology or process that already has a proven track record in the industry, rather than world-leading or transformative initiatives.

The Foundation Industries and the Environment
The foundation industries are currently very energy intensive in producing materials, and also have the potential to contribute to creating greener products, such as to reduce building heat loss. However, our findings show that very few FI firms are currently innovating in response to environmental concerns, suggesting that the Net Zero agenda has not yet stimulated widespread change to production technologies or processes in these industries. There may be opportunities to increase energy efficiencies within the foundation industries and to encourage their contribution to reducing emissions in downstream applications.

Our Conclusions
In our report, we explore FI firms’ innovation in relation to willingness (openness to change and growth), capability (access to resources) and capacity (ability to commit resources to drive change). Foundation industry SMEs demonstrate strong willingness to innovate frequently, and most have plans for future innovation. However, their tendency to define innovation broadly to include all changes and improvements to products, processes, or practices may mean that they are enthusiastic about incremental innovation, but may be less open to more industry-leading activities in the absence of external incentives.

The innovation capability of foundation industry SMEs is strongly influenced by their suppliers and customers, who can provide valuable incentives to innovate, suggesting that interventions to encourage innovation across the supply chain could potentially enhance performance upstream and downstream. It has been interesting to see that there is relatively low engagement of these firms with other potential innovation partners, such as universities, further education colleges, research organisations, knowledge transfer networks, industry associations, and other government agencies. The question of how to encourage this dialogue is an interesting and important one.
The innovation capacity of micro and small foundation industry enterprises is negatively influenced by instability or unpredictability in customer orders and revenue streams. Cost considerations most often influence hesitancy to innovate: a reluctance to divert resources from existing business streams to research and development or other innovation activity and external grants were not widely seen as suitable for the types of incremental R&D and innovation that firms were undertaking. However, significantly, whether they could allocate time was often a deciding factor in whether these micro and small FI firms took steps to implement innovation in their day-to-day activities. Time was identified as a hidden and valuable resource.

The report identified broad trends. However, it should be noted that FI firms also reported challenges at different stages of the innovation process. Our report delivers a strategy and tool for Innovate UK and their stakeholders to assess FI SME innovation readiness to better target interventions and signpost resources.

Please get in touch with the Innovate UK team if you would like to learn more about using the tool Transforming Foundation Industries Challenge – UKRI.

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Future of Innovation Funding Call

‘This is a really exciting opportunity to explore themes that have emerged from other Caucus projects, which have the potential to create thought leadership for Innovate UK’
Debbie Johnson, Innovate UK

‘This is a great opportunity for innovation and social science researchers to influence the priorities of Innovate UK’
Tim Vorley, Innovation Caucus

We’re excited to be able to work with Innovate UK to fund up to 4 state of the art thought leadership projects that draw on academic insights (and primary research, if applicable) to provide new insights in one of three broad areas:  design, social capital and green growth.  The Innovation Caucus is offering funding of up to £10,000 for a suitable project led by a Caucus member.  Deadline for applications is Monday 11 April, 5pm.  

There will be an online Q&A session to cover any questions that you may have about the Future of Innovation Funding Call on 31 March at 2pm.  (Join Zoom Meeting)

Future of Innovation Funding Call:

Innovate UK is looking for thought leadership projects that will provide insights for business and policy making in these three key areas:

  1. Design – We invite projects exploring the benefits of design tools and processes in realizing stronger innovation outcomes for businesses, and potential implications for future innovation policy and programmes.
  2. Social Capital – We invite projects exploring the relationships between social capital and innovation, and the implications for policy and programmes to support innovators and innovative businesses.
  3. Green Growth – We are inviting projects to explore the future of green innovation collaborations and implications for the circular economy, identifying new future pathways for greening and the role of different policies in relation to the UK innovation system.

Intended outputs: These should include a c.10 slide presentation to ESRC/Innovate UK, a report (c.25 pages), and an executive summary (5 pages). 

Submission Process:  

Please complete and send to info@innovationcaucus.co.uk the proposal form: IC Funding Call Application Form March 2022

Completed proposal forms should be emailed to info@innovationcaucus.co.uk using the subject heading ‘Funding proposal – Future of Innovation’. The deadline for submissions is 5pm on Monday 11th April 2022

Eligible Costs

  • Project costs (cost of travel, accommodation and subsistence)
  • Networking/event costs
  • Teaching or research buy-out 
  • Research assistance
  • Consumables 

Any other costs including but not limited to the below are ineligible costs (please email Laura at ldegenhardt@brookes.ac.uk to check if unsure):

  • Institutional overheads/work space
  • Additional salary payment to the researchers or personal maintenance
  • Equipment (inc but not limited to computing, recording equipment etc.)

Selection Process:

A selection panel, which will include the Principal Investigator for the Innovation Caucus and the project lead(s) for Innovate UK and/or ESRC, will meet to agree the preferred proposal, based on the following criteria:

  • Relevant expertise of lead applicants and other researchers
  • How well proposals meet the project brief
  • Value for money
  • Feasibility of project plans.

A final specification for the project will be agreed with the successful applicant(s).  We will aim to let you know the outcome of the selection by the end of April.

If you have any questions please contact info@innovationcaucus.co.uk or ldegenhardt@brookes.ac.uk

 

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The Innovators’ Breakfast Club – Series 4 image

The Innovators’ Breakfast Club – Series 4

The Innovation Caucus was delighted to host a fourth series of the ‘Innovators’ Breakfast Club’, bringing together leading social scientists and Innovate UK/UKRI staff to discuss prominent issues in the UK innovation landscape. 

It was great to see a lot of new faces from across UKRI join us for another set of engaging discussions. This series, we had a record turnout of over 100 attendees at a session where CEO of Innovate UK, Indro Mukerjee, was present.  Each session begins with an Innovate UK staff member setting out the context on the week’s topic, followed by 2 or 3 short ‘provocations’ from Innovation Caucus members or special guests, invited for their social science expertise. Speakers’ short inputs are designed to stimulate thinking and actionable insights drawn from social science research. The focal point of each event is always the lively audience discussion and Q & A with panellists.

We would like to thank all of our speakers (listed below) for their work in preparing and delivering insightful talks, Debbie Johnson and Dr Geeta Nathan (Innovate UK)  for their work in bringing this latest series together, and also Dr Vicki Belt (Enterprise Research Centre) for valuable expert speaker recommendations. Thanks also to participants for filling in the series evaluation form and providing plenty of ideas for future consideration – watch this space!

Innovator’s Breakfast Club: Series 4 – Thanks to all of our speakers!

Networks (7.01.22)

This session discussed the importance of networks and networking in supporting innovation and business growth: how to strengthen innovation networks in the UK, and furthering understanding of how, in a post-covid world, to support networks and capacity building. 

  • Dr Alicia Greated (Knowledge Transfer Network/KTN) 
  • Dr Ben Spigel, Innovation Caucus (University of Edinburgh Business School)
  • Dr Sarah Otner, Innovation Caucus (Kingston University London)

 

Infrastructure (14.01.22)

This session advanced the discussion about the importance of the innovation infrastructure in the UK to support the future growth and competitiveness of firms. With key assets, such as Catapults, and facilities such as those at Harwell and Daresbury, there remains a focus by Innovate UK on future needs in terms of developing innovation assets and their role in the innovation ecosystem. 

  • Dr Dave Wilkes (Innovate UK, Director of Place, Centres and Networks)
  • Professor Jill MacBryde (University of Strathclyde)
  • Dr Muthu De Silva (Birkbeck, University of London)


Early Stage Investment (21.01.22)

This session sought insight from academics about how to support deep tech to improve Innovate UK’s role as an advocate of early stage investment in the UK.

  • Esra Kasapoglu (Innovate UK, Responsible Innovation, Inclusive Society, and Sustainable Economy for building the Digital UK)
  • Professor Stephen Roper (Warwick Business School)
  • Professor Ramana Nanda  (Imperial College London)

 

Sustainable Investment (28.01.22)

This session discussed ways of ensuring innovation investment and reflected on its impact on sustainability. Innovate UK were interested to hear insights from academics to inform how better to support UK businesses presenting their contribution in this area. 

  • Ian Meikle (Innovate UK, Director of Clean Growth and Infrastructure)
  • Dr Anna Valero (London School of Economics)
  • Professor Ian Docherty, Innovation Caucus (University of Stirling)

 

Levelling Up and Place (4.02.22)

Session highlighting the importance of considering place in the levelling up agenda

  • Dean Cook  (Innovate UK, Head of Regional Engagement) 
  • Professor Elvira Uyarra, Innovation Caucus (University of Manchester)
  • Robert Huggins, Innovation Caucus (Cardiff University)

 

Reflections (11.02.22)

Session looking at next steps to Innovate UK’s innovation strategy and agenda

  • Geeta Nathan (Innovate UK, Head of Economics and Insights) 
  • Rob Shaw (UKRI, Innovate UK Chief of Staff) 
  • Shahid Omer (UKRI, Deputy Director-Innovation Strategy at BEIS) 
  • Pippa Sharma (UKRI, Deputy Director for Technology Transfer at BEIS)
  • Professor Tim Vorley, Innovation Caucus (Oxford Brookes University)
  • Professor Stephen Roper (Warwick Business School

 

Featured image adapted from a photo by Syed Hussaini on Unsplash

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NEW REPORT: Social Investment Partnerships

The Innovation Caucus has been conducting research into the field of social investment in partnership with ESRC and Innovate UK. The research explored the current social investment market and potential avenues for expansion in the market. 19 qualitative interviews were conducted with a range of social investment stakeholders including representatives from social investors, ‘traditional’ investors, recipients of social investment and universities involved in social investment.

The report was prepared by Dr Lauren Tuckerman and Professor Tim Vorley at the Innovation Caucus.

The full report can be downloaded here.

Key Findings

Different stakeholders interviewed interpreted the central concept of social investment differently. For example, social investors were very clear about the definitions of social investment whereas traditional investors and those in support organisations for traditional business were less able to succinctly define social investment.

It is important that any new social investment funds are flexible in their approach both towards types of organisations eligible to apply, and using broad social missions to attract investors and investees. Often the UN’s Sustainable Development Goals (SDGs) were discussed as a key framework on which to base broad social missions.

Alignment of values and social mission was discussed as a means to counter challenges of language and culture when working across sectors. Although some interviewees acknowledged that there were cultural and language barriers between recipients of social investment, and traditional investors, they were positive about the ability to overcome this challenge with alignment of values and social mission.

Opportunities for future development included in the report are identified as:

  • In supporting Social Investment Partnerships, there is merit in the ESRC and Innovate UK (as well as UKRI more widely) identifying the high-level priorities in order to give a focus to prospective applicants.
  • Any support for future Social Investment Partnerships programmes needs to have a clear social, societal and or environmental challenge or need.
  • There are opportunities to promote equality, diversity and inclusion through Social Investment Partnerships programmes. There is scope to engage a broader range of prospective investee groups which are likely to go beyond those attracting investment from traditional sources.
  • Any future plans for Social Investment Partnerships that seek to support social enterprise or social ventures need to ensure direct consultation with a cohort of social entrepreneurs and social investors, and have them represented on a steering/ advisory group.
  • There is an opportunity as a part of any future Social Investment Partnerships to promote partnership and collaboration with existing infrastructures and stakeholders to maximise the value added though projects (i.e. social entrepreneurs, universities, local authorities, trusts, charities and social investment management firms).
  • The focus on realising economic return, financial instruments and exit strategies need to be flexible in investment accelerators to allow impact businesses to gain the most from investment.
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NEW REPORT: Rethinking the Role of Further Education Colleges in Innovation Ecosystems

As we focus efforts to increase the UK’s innovation activity, what is the role of further education colleges (FECs) in increasing business innovation? To explore this, Innovate UK commissioned the Innovation Caucus in partnership with:

  • Gatsby Foundation
  • Department for Education
  • BEIS.

The ‘rethinking the role of FECs in innovation’ report  was published this month. It explores the ways in which FECs are developing their offer to support businesses to innovate alongside their established role as education providers.

For a brief overview of the reports findings and next steps, see the new Innovate UK blog by Debbie Johnson (Lead Specialist for Research, Innovate UK) Tim Vorley (Convenor of the Innovation Caucus).

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The Innovators’ Breakfast Club – Series 3 image

The Innovators’ Breakfast Club – Series 3

The Innovation Caucus was delighted to host a third series of the ‘Innovators’ Breakfast Club’, bringing together leading social scientists and Innovate UK/UKRI staff to discuss prominent issues in the UK innovation landscape.

It was great to see a lot of new faces from across UKRI join us for another set of engaging discussions. Each session begins with an Innovate UK staff member setting out the context on the week’s topic, followed by 2 or 3 short ‘provocations’ from Innovation Caucus members or special guests, invited for their social science expertise. Speakers’ short inputs are designed to stimulate thinking and actionable insights drawn from social science research. The focal point of each event is always the lively audience discussion and Q & A with panellists.

We would like to thank all of our speakers (listed below) for their work in preparing and delivering insightful talks,  Debbie Johnson and Dr Geeta Nathan (Innovate UK)  for their work in bringing this latest series together, and also Dr Vicki Belt (Enterprise Research Centre) for valuable expert speaker recommendations. Thanks also to participants for filling in the series evaluation form and providing plenty of ideas for future consideration – watch this space!

Innovator’s Breakfast Club: Series 3 – Thanks to all of our speakers!

Disruptive Innovation (21.04.21)

  • Simone Boekelaar (Innovate UK)
  • Professor Jonathan Sapsed (Newcastle University)
  • Professor Irene Ng (University of Warwick)

Business Model Innovation (28.04.21)

  • Nigel Walker (Innovate UK)
  • Dr Panos Desyllas (University of Bath)
  • Dr Yang Zhao (Loughborough University London)

Agility & Experimentations (05.05.21)

  • Simon Edmonds (Innovate UK)
  • Dr Eszter Czibor (Nesta)
  • Professor Bruce Tether (University of Manchester)

Connecting Innovation Ecosystems (12.05.21)

  • Dan Hodges (Innovate UK)
  • Professor Kiran Fernandes (Durham University)
  • Dr Karen Bonner (University of Ulster)
  • Professor Rick Delbridge (Cardiff University)

Missions (19.05.21)

  • Mike Biddle (Innovate UK)
  • Dr Kieron Flanagan (University of Manchester)
  • Professor Kevin Morgan (Cardiff University)

Featured image adapted from a photo by Syed Hussaini on Unsplash

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New Video: Rethinking the Role of Further Education Colleges in Innovation Ecosystems image

New Video: Rethinking the Role of Further Education Colleges in Innovation Ecosystems

Professor Tim Vorley (Academic Lead of the Innovation Caucus) was pleased to join a recent Association of Colleges webinar, supported by the Gatsby Charitable Foundation and the Productivity Institute, to share some of our ongoing work looking at the role of FECs in the the Innovation Ecosystem.

What can colleges, as anchor institutions in their respective places,  do as part of the innovation ecosystem? Our work with Innovate UK and Gatsby looks at the important role of FECs and goes above and beyond skills development.

About the Innovation Caucus:

The Innovation Caucus supports sustainable innovation-led growth by promoting engagement between the social sciences and the innovation ecosystem. Our members are leading academics from across the social science community, who are engaged in different aspects of innovation research. We connect the social sciences, Innovate UK and the ESRC, by providing research insights to inform innovation policy and practice. We champion the role of social science in innovation and enhance its impact. Professor Tim Vorley is the Academic Lead. The initiative is funded and co-developed by the ESRC and Innovate UK. The views expressed in this piece are those of the author and do not necessarily represent those of the funders

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New report: Assessing the Impact of Covid-19 on Innovate UK Award Holders – February 2021 image

New report: Assessing the Impact of Covid-19 on Innovate UK Award Holders – February 2021

Today the Innovation Caucus and the Enterprise Research Centre published their third in a series of benchmark reports on the impact of the Covid-19 crisis on Innovate UK award holders.

Analysis was based on an on-line survey of 274 IUK award holders conducted between 1st February and 25th February 2021 and 21 in-depth interviews which were undertaken over the same period. The report was commissioned by Innovate UK.

This Insights Paper was prepared by Stephen Roper (Enterprise Research Centre and University of Warwick), Tim Vorley (Innovation Caucus and Oxford Brookes University) and Jen Nelles (Innovation Caucus and University of Sheffield).

Download the Wave 3 report here.

Headline Summary

In February 2021 firms were marginally more optimistic about the outlook than in October 2020. However, firms are still experiencing significant challenges constraining their abilities to engage in innovation and complete projects on time, potentially with longer term implications for the innovative capacity of the economy.

Firms are experiencing continued disruption through the lockdown particularly to cash flow, business development and the ability to network with other companies. Cash flow remains critical for about 1:5 companies. This is a slight worsening of the situation from the previous period when around 1:6 companies reported cash flow being critical. Most firms were aiming to reduce costs in order to cope.

R&D investment patterns vary significantly between firms with some firms rebounding, some in a holding pattern with stable levels of investment and some firms continuing to pull back from investing in R&D and innovation. 62.7% still classify their R&D capacity as “disrupted”, indicating that despite these upticks many firms are still not back to normal capacity.

You can also read the Wave 2 report here (October – November 2020) and the Wave 1 report here (June – July 2020).

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Future Flight Research Director  – Town Hall Event image

Future Flight Research Director – Town Hall Event

ISCF Future Flight Research Director Call –Now open

UK Research and Innovation (UKRI), via the Economic and Social Research Council (ESRC), is pleased to announce that the Industrial Strategy Challenge Fund (ISCF) Future Flight Research Director call is now open.

The Research Director will help the Future Flight Challenge and wider aviation sector to identify areas where economic and social science research can make a significant contribution. A key aim of the role will be to support the creation of a multidisciplinary community, linking stakeholders, researchers and businesses to identify and tackle challenges associated with Future Flight. You can watch a video below from an online briefing event for potential applicants which was hosted by the Innovation Caucus on 17th March.

The call will provide £190,000 (100% fEC) of funding for 12 months.

Proposals must be submitted by 16:00 22 April 2021. All proposals to this opportunity must be from a researcher based at an eligible UK research organisation.

For further details please visit: https://www.ukri.org/opportunity/iscf-future-flight-research-director-2021/

Featured image adapted from photo by Sam Schooler on Unsplash.

 

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