A common refrain across the western world is that economies are suffering from the agglomeration effect, whereby talent and resources tend to coalesce around major metropolises, leaving smaller towns and rural communities bereft of jobs, innovation and much in the way of hope for the future.
It’s a problem a new report from the Confederation of British Industry (CBI) believes can be overcome by greater investment in research and development facilities around the country. The report reveals that while the UK could benefit greatly from improving the amount invested in R&D, it could benefit even more from spreading that investment around the country, with much of the investment to date concentrated in the South East of the country.
Indeed 52% of all R&D investment is in London, the South East and the East of England, and the CBI believe that if this were spread around the country, it would boost British R&D investment by over £7bn. It’s a goal that can be achieved by the creation of a regional network of what the CBI refer to as ‘Catapult Quarters’, which the authors believe would be anchored around notable institutions and attempt to build on local strengths to incentivize both co-location and collaborative activity in each area.
“By running with this agenda, business and Government can in partnership unleash the innovative potential of towns and cities throughout the UK,” the CBI say. “From St. Austell to St. Andrews, there are already a wealth of successful stories of companies coming together in their regions to the benefit of society and the economy.”
Such initiatives are not neccessarily that new, and the UK have attempted to foster regional innovation via programs such as the Local Enterprise Partnerships (LEPs) and the existing Catapult network, which both ostensibly strive to support innovation at a local level and develop the strengths already present in local universities and industry.
The LEP network itself was formed out of the previous Regional Development Agencies, which were a largely failed initiative to encourage innovation around the UK. To date, there are nearly 40 LEPs in operation, and while there remains considerable concern regarding their effectiveness, there is surely concern that the CBIs Catapult network will be simply reinventing an already dysfunctional wheel.
Indeed, recent research highlights some of the failings with the LEP network, with boards criticized for being unreprsentative of the local economy and little to no representation from trade unions. This led to an over-representation for finance and consulting, with more labor-intensive sectors under-represented.
There is little doubt that economies would be better served by becoming more diversified, especially in terms of the distribution of innovation talent and resources, but there’s little to believe that the CBIs plans will succeed where the LEPs and other initiatives have tried in the past.
