Opening the Innovation Economy: The case for inclusive innovation in the UK

In February 2022, the UK Government’s Levelling Up White Paper set out a mission to increase expenditure on public research and development outside the Greater South East by at least 40% by 2030. It also outlined plans for new Innovation Accelerators in Glasgow, the West Midlands, and Greater Manchester.

To understand how, as part of the levelling-up agenda, places right across the UK can deliver truly inclusive innovation, the UK Innovation Districts Group and Connected Places Catapult initiated a Research Commission on Inclusive Innovation. A team, led by Metro Dynamics and Professor Neil Lee, explored the dynamics of innovation in local economies through interviews with people leading and working in innovation districts across the UK. The conversations covered how districts are delivering inclusive innovation on the ground, from involving local communities in setting their strategies to creating broad-ranging employment and training opportunities.

From this research, the report:

• Identifies ten levers that leaders in the private and public sectors can pull to make the process and outputs of innovation more inclusive
• Highlights a number of successful projects and programmes demonstrating elements of successful inclusive innovation up and down the country
• Provides recommendations for key delivery partners including innovation districts, national Government, and local governments.

Emma Frost, Chair of the UK Innovation Districts Group, said: “Against a backdrop of environmental crisis, post-COVID uncertainty and a rising cost of living and inequality, it is more important than ever to widen the funnel of who participates in innovation economies in the UK. This is the only way that we will achieve the additionality and value generation that UK communities and economies need.

“This research, jointly commissioned by the UK Innovation Districts Group and the Connected Places Catapult, has examined where places are starting to do just that. It is critical that we, as innovation district leaders and policymakers, understand the building blocks that create thriving, inclusive, and sustainable local innovation economies and how these can be delivered at scale.”

Sam Markey, Ecosystem Director for Place Leadership at Connected Places Catapult, said: “Innovation does not happen in a vacuum; it happens in places and is shaped by people. Inclusive innovation is about making sure that the innovation economy creates opportunities for people and communities from all corners of the country – not just in London and the South East.

“We know that innovation currently represents just a fraction of the UK’s economic activity but it has a profound influence on increasing prosperity and future-proofing economic structures. For too many people the prospect of working in innovation is remote, and the benefits of new discoveries are disconnected from their own lives. We need a more inclusive innovation economy to activate the UK’s latent potential.”

Practising Inclusive Innovation

Two schemes from the North East of England are included in the report.

Creating environments suitable for investment requires active curation, at the same time increasing opportunities for investors to access and engage with local opportunities. An example of active curation is the partnership that has formed between Newcastle University, Newcastle City Council and Legal & General. The partnership has established the Newcastle Helix innovation district. The 24 acre development is home to the National Innovation Centre for Ageing, the National Innovation Centre for Data and wide range of SMEs and corporates working in life sciences, data, tech and law.

A new £75m early stage ‘Society Tech’ fund has been proposed by a collaboration between venture capital (VC) firm Northstar Ventures and the Universities of Durham, Newcastle, Northumbria, Sunderland, and Teesside. The scheme would support spin out companies from the North East’s universities - Durham, Teesside, Sunderland, Northumbria and Newcastle - as well as regional institutes and the local entrepreneurial ecosystem. The proposed fund is set apart by its explicit aim to address a gap in the local finance market, recognising that venture capital has failed to prioritise social investments, and in so doing has both missed out on new markets and limited its positive effect on society.