30 September 2014 - European Commission€¦ · 30 September 2014 Regional Innovation Monitor Plus...

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30 September 2014

Regional Innovation Monitor Plus

Regional Innovation Report North West of England (UK)

To the European Commission

Enterprise and Industry Directorate-General

Directorate B – Sustainable Growth and EU 2020

Regional Innovation Monitor Plus

Regional Innovation Report North West of England

technopolis |group| in cooperation with

George Christopoulos, Nordine Es-Sadki and René Wintjes, UNU-MERIT

Regional Innovation Monitor Plus i

Table of Contents 1. Main Trends and Challenges in the Regional Innovation System 4

1.1 Recent Trends in Economic Performance of the North West 4 1.2 Recent Trends in the Regional Innovation Performance of North West UK 5 1.3 Identified Challenges 9

2. Innovation Policy Governance in the North West 11 3. Innovation Policy Instruments and Orientations 19

3.1 The Regional Innovation Policy Mix 19 3.2 Regional Policies and Initiatives in Support of Advanced Manufacturing 26 3.3 Appraisal of Regional Innovation Policies in the North West 29 3.4 Good Practice Case: the Greater Manchester Business Growth Hub 31 3.5 Possible Future Orientations and Opportunities 32

Appendix A Bibliography 35 Appendix B Stakeholders Consulted 35 Appendix C Statistical Data 36

Table of Figures Figure 1 Economic Performance Indicators ..................................................................... 5 Figure 2 Innovation Performance Indicators .................................................................. 6 Figure 3 R&D Expenditure per Sector of Performance in North West UK ..................... 7 Figure 4 Share of R&D Expenditure per Sector of Performance ..................................... 8 Figure 5 GERD and GDP Trends ...................................................................................... 8 Figure 6 Technological and Non-technological Innovators ............................................ 9 Figure 7 Governance Itinerary to the Liverpool City Region Innovation Plan 2013: Participation and Ownership .......................................................................................... 23 Figure 8 Sci-Tech Daresbury .......................................................................................... 30 Figure 9 Liverpool City Region Innovation Plan 2013 – a working example of identifying emerging directions: connected and related potential ................................ 33

ii Regional Innovation Monitor Plus

Tables Table 1 Innovation Policy Governance ........................................................................... 16 Table 2 Innovation Policy Institutional Set-Up and Available Human Resources ....... 18 Table 3 Existing Regional Innovation Support Measures ............................................. 24

Regional Innovation Monitor Plus 1

PREFACE

Launched in 2010, the Regional Innovation Monitor1 continues to be one of the flagship initiatives of DG Enterprise and Industry of the European Commission. From the outset, it aimed at supporting sharing of intelligence on innovation policies in some 200 regions across EU20 Member States.

RIM Plus aims to help regions to improve their innovation policies based on better and harmonised policy intelligence. The new contract aims to contribute to the development of more effective regional innovation policies and promote policy learning. Building upon the experience gained and results obtained during the implementation of the RIM in the period 2010-2012, the RIM Plus service evolves towards providing practical guidance to regions on how to use the collected information, establishing a network of regional experts with thematic specialisation, and organising specialised workshops taking into account the relevance and potential interest among the regional innovation policy makers.

RIM Plus covers EU-20 Member States: Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, the Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United Kingdom.

This means that RIM will not concentrate on Member States where the Nomenclature of territorial units for statistics NUTS 1 and 2 levels are identical with the entire country (Estonia, Latvia, and Lithuania), Malta which only has NUTS 3 regions, Slovenia which has a national innovation policy or Cyprus and Luxembourg which are countries without NUTS regions.

The main aim of 30 regional reports is to provide a description and analysis of contemporary developments of regional innovation policy, taking into account the specific context of the region as well as general trends. All regional innovation reports are produced in a standardised way using a common methodological and conceptual framework, in order to allow for horizontal analysis, with a view to preparing the Annual EU Regional Innovation Monitor Plus report.

European Commission official responsible for the project is Alberto Licciardello ([email protected]).

The present report was prepared by George Christopoulos, Nordine Es-Sadki and René Wintjes ([email protected]). The contents and views expressed in this report do not necessarily reflect the opinions or policies of the Regions, Member States or the European Commission.

The Regional Innovation Access Point and Knowledge Hub presenting further details of the regional innovation measures, policy documents and regional organisations in North West of England is accessible through the RIM Plus online inventory of policy measures here: http://ec.europa.eu/enterprise/policies/innovation/policy/regional-innovation/monitor/region/select

Copyright of the document belongs to the European Commission. Neither the European Commission, nor any person acting on its behalf, may be held responsible for the use to which information contained in this document may be put, or for any errors which, despite careful preparation and checking, may appear.

1 http://ec.europa.eu/enterprise/policies/innovation/policy/regional-innovation/monitor/

2 Regional Innovation Monitor Plus

Executive Summary 1. Main Trends and Challenges in the Regional Innovation System

The analysis in the first section points to strengths in terms of business R&D, medium/high-tech manufacturing and higher education. Three key challenges facing innovation in the North West of England can be expressed as follows:

Challenge 1: Align skills to industry needs

A major challenge companies in the North West face concerns the recruitment of skilled people. As stakeholders have noted in the ‘Advanced Manufacturing and Nuclear’ report for North West Regional Leaders’ Board (2013), employers are often forced to recruit workers from different parts of the supply chain, since they face difficulties in finding candidates with the skill sets they seek.

Challenge 2: Cluster building, embedding through R&D and innovation linkages

The level of employment in 2 or 3 star clusters is very low in the North West. The importance of cluster building in increasing productivity, innovation capacity and new business has been underlined by the region’s Local Enterprise Partnerships (LEPs) in their Strategic Plans, especially in Greater Manchester and the Liverpool City Region.

Challenge 3: Access to finance and business support to stimulate R&D and innovation in SMEs

Business support and access to finance have been acknowledged in the region’s LEPs’ Growth Plans as main priorities in the attempt to boost entrepreneurship and, consequently, growth in the North West. Lack of know-how and access to funding is one of the most important impediments SMEs face, and addressing this issue is crucial in order to increase the amount and turnover of in-house SME innovation, in which North West SMEs lag far behind the EU average. Providing the necessary business support is vital for firm growth, since as the ‘Innovation in the North of England: Drivers, Progress and Prospects’ report observes, the problem is not confined to the limited availability of risk capital in the region, but extends to the limited number and quality of ‘investment-ready’ firms (The SURF Centre, University of Salford, 2010). Growth Hubs can contribute towards this direction and should receive adequate funding in order to be effective. Universities have an important role to play in such initiatives, as demonstrated by the case of Boost Business Lancashire, an ERDF-backed, LEP-led growth hub which brings together a range of local actors including Lancaster University and UCLan and offers a single gateway for business support.

2. Innovation Policy Governance

In the North West Region of the UK, regional innovation policy was managed, up until 2012, by the North West Development Agency (NWDA). After the official abolishment of the RDAs many of their responsibilities connected to innovation policy were transferred back to the national government and namely the UK Government Department for Business, Innovation and Skills (BIS). The Technology Strategy Board, an executive non-departmental public body of the BIS, is the UK’s national innovation agency and aims to promote and support business-led innovation. The TSB’s policy initiatives focus on establishing networks, enhancing knowledge exchange and facilitating access to funding for SMEs. Today, at the sub-regional level, the Local Entrepreneurship Partnerships are key players regarding innovation policy design and implementation, although their focus is not strictly on innovation policy per se. One of the main aspects of the rationale underpinning the move from RDAs to LEPs concerns the increased capacity for cooperation between the private and public sector in smaller geographical areas, namely the functional economic areas, compared to the significantly larger regions.


There are currently five LEPs in the North West:

• Greater Manchester Local Enterprise Partnership; • Lancashire Enterprise Partnership; • Liverpool City Region Local Enterprise Partnership; • Cheshire and Warrington Enterprise Partnership; and • Cumbria Local Enterprise Partnership.

3. Innovation Policy Instruments

Examples of initiatives supporting advanced manufacturing in the North West and addressing some of the challenges identified in the Advanced Manufacturing Report include the ERDF Open Call for the Enhancing Manufacturing Advisory Service (MAS) Activities in the North West of England, the Advanced Manufacturing Supply Chain Initiative (AMSCI), the Advanced Manufacturing Initiative in Cumbria and Aerospace Supply Chain Excellence (ASCE) 2.

4. Conclusions: future actions and opportunities for innovation policy

Although it is too early to assess the results of the re-structured innovation policy landscape after abolishing the Regional Development Agencies, the analysis derived at the following recommendations:

Address the weaknesses in the business innovation performance of SMEs: The focus in many reports concerning innovation in the North West is on the aspects of the innovation system which already show a strong performance. The identified weakness concerning the business innovation performance of SMEs in particular is less often addressed in the strategies and studies. The good policy practise of the Greater Manchester Business Growth Hub is an example of a promising direction to address this weakness in the business innovation performance of SMEs in the North West.

Upgrade manufacturing value chains and skills involving SMEs and large firms: A possible future orientation which is linked to the former one, is to increase the policy attention to initiatives that involve both SMEs and large companies in manufacturing value chains in the region. Over the past decades many manufacturing value chains have fragmented internationally, but new advanced manufacturing and smart factory trends also provide new opportunities for new forms of cooperation between firms in value chains. Promoting such linkages between small regional firms and large international firms could also serve the up-grading of skills to a more advanced level.

Increase the regional embeddedness of local Science-Industry clusters: Cooperation in value co-creation at regional level would also be helpful in promoting the embeddedness of local Science-Industry clusters. The recent announcement of AstraZeneca to move its R&D activities to Cambridge does not only show the challenge in providing high quality local eco-systems for R&D and incubation of spin-off companies, but it also shows the relevance of embedding such R&D concentrations in a wider regional system of innovative activities.

Enhance coordination and cooperation between local partnerships concerning innovation support: LEPs compete with each other to attract private investment and gain access to a larger allocation of government funding such as the Regional Growth Fund. However, this has not substantially hindered attempts at collaboration between LEPs. The various local partnerships in the North West should remain open to collaboration with others. For some innovation activities and policy activities in the field, it is likely that potential benefits are to be gained from increasing the geographical scale of the partnership. For some activities collaboration with one neighbouring local partnership may be appropriate, while in some other specific cases collaborating at the level of the North West may be more appropriate, or there might even be interesting opportunities for more remote partnerships going beyond the region.


1. Main Trends and Challenges in the Regional Innovation System

1.1 Recent Trends in Economic Performance of the North West

The North West region of the United Kingdom consists of the counties of Cheshire, Cumbria, Greater Manchester, Lancashire and Merseyside. The North West had a population of 7m in 2011, is considered the birthplace of the industrial revolution. Innovation in textile manufacturing was the driving force behind the region’s rapid industrialization in the 18th and 19th centuries and state of the art infrastructure –including the world’s first inter-city rail link between Liverpool and Manchester – was built to complement the rapid expansion of economic activity.

Manufacturing has traditionally been the area of competitive advantage for the North West economy. However, increasing globalisation and rapid technological advancements greatly altered the landscape in recent decades, as large developing nations gained the capacity to be competitive at high-value manufacturing.

In this context, manufacturers in the UK had an incentive to move operations to distant geographical locations in order to reduce costs. In the case of the North West, this had an important impact on the regional economy.

As underlined in the ‘State of the North West Economy’ report by the Northwest Regional Development Agency Research Team (2010), the region’s economy has undergone significant restructuring in the last 35 years, shifting from manufacturing to lower-productivity jobs in services.

Regardless of the aforementioned developments, manufacturing remains at the centre of economic activity in the North West with large concentrations of employment in the sector. According to the ‘Regional Competitiveness Index 2013’ (Paola and Dijkstra, 2013), apart from Greater Manchester, which ranks 36th, the rest of the North West NUTS 2 regions rank 177th or below among 261 EU regions when it comes to business sophistication, indicating the need for the modernisation of the regional economy in order to enhance competitiveness.

Regarding the structure of the economy in the North West, very low levels of employment in agriculture can be observed (Figure 1:1), while employment in industry, although slightly higher compared to the rest of the UK, is 21.1% lower than the EU average. Employment in the business and science and technology sectors is higher relative to the EU but at a lower level when measured against UK performance. The high percentage of employment in the public sector can potentially leave the North West vulnerable to public spending cuts.

As Figure 1 below demonstrates, the North West has performed worse in terms of GDP per capita compared to the UK as a whole, as well as to the EU.

One of the key indicators is that of labour productivity growth, where the region lagged 13.6% behind the UK and 48.2% behind the EU. The long term unemployment rate in the region, was, at 2.9%, significantly lower compared to the 5.1% rate in the EU.

The presence of this productivity gap can arguably be connected to the low levels of specialisation and employment in 2 and 3 star clusters. These figures indicate a limited presence of agglomeration effects and a reduced capacity to exploit the region’s competitive advantages.


Figure 1 Economic Performance Indicators

Source: Eurostat, UNU-MERIT

1.2 Recent Trends in the Regional Innovation Performance of North West UK

Based on the indicators depicted in Figure 2, what stands out is the extremely low level of Government R&D investment compared to the rest of the EU and the UK. Traditionally for the North West this is counterbalanced to a certain extent by the high level of Business R&D investment, because of several large R&D units of multinationals located in the region (e.g.: Unilever, British Aerospace, AstraZenica and Pilkington). However, this strength is under pressure (see also Figure 1:4), with for instance the recent announcement that AstraZenica will relocate the significant majority of their R&D activities to a new global R&D centre in Cambridge, with approximately 1,600 roles re-locating from Alderley Park (a centre for cancer R&D whith about 2,900 employees). AstraZeneca will remain a key tenant at Alderley Park with around 700 staff in non-R&D roles.

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Figure 2 Innovation Performance Indicators

Source: Eurostat, UNU-MERIT

The North West lags behind the EU and the UK when it comes to EPO patent applications, an indicator often used as a proxy for R&D output.

The share of employment in medium-high and high-tech manufacturing is above the UK average, while the share of knowledge-intensive services is almost the same.

Regarding business innovation (Figure 2), the North West is far behind the rest of the EU in all indicators. Its performance is, however, on par with the rest of the UK, hence pointing to broader problems regarding innovation performance in the country.

Figure 3 shows that Business R&D has decreased slightly since 2008. Whereas the government R&D expenditures in the UK as a whole has declined (from just under 0.25% of GDP in 2000 to 0.15% in 2011), the share of government R&D expenditures in GDP has remained stable for the North West at a very low level.

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Figure 3 R&D Expenditure per Sector of Performance in North West UK

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the UK and EU. With the traditional strength in business R&D being under pressure, the importance of high profile universities in the region such as Lancaster University and the University of Manchester, have become even more important. For example, AstraZeneca has sold Alderley Park in March 2014 to Manchester Science Parks (MSP), a Greater Manchester based public-private partnership and science park operator. The level of higher education R&D in the North West is also encouraging regarding the region’s potential to further develop a highly skilled workforce. In order to translate this in to enhanced innovation capacity, however, the skills acquired must match those needed by industry (NWBLT, 2014).

Figure 4 Share of R&D Expenditure per Sector of Performance

Source: Eurostat

Figure 5 GERD and GDP Trends

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Figure 6 Technological and Non-technological Innovators

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1.3 Identified Challenges

The analysis in the former paragraphs point to strengths in terms of business R&D, medium/high-tech manufacturing and higher education. Three key challenges facing innovation in the North West of England can be expressed as follows:

Challenge 1: Align skills to industry needs

A major challenge companies in the North West face concerns the recruitment of skilled people. As stakeholders have noted in the ‘Advanced Manufacturing and Nuclear’ report for North West Regional Leaders’ Board (2013), employers are often forced to recruit workers from different parts of the supply chain, since they face difficulties in finding candidates with the skill sets they seek.

In order to align the skills of the workforce with the needs of the market, it is imperative to establish a connection between the education and business sectors in the region. Through increased dialogue between Higher Education and the private sector, the strengths of the North West can be better identified and more productively built upon through the relevant development of skills. The high-quality universities that exist in the region offer an important advantage in this respect.

Providing training that matches the needs of the firms in the region is key in order to increase labour productivity in the North West at a higher rate. A skilled workforce will also serve in adapting more effectively to new challenges emanating from the rapidly shifting landscape in sectors such as advanced manufacturing.

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Challenge 2: Cluster building, embedding through R&D and innovation linkages

As was mentioned in the previous section, the level of employment in 2 or 3 star clusters is very low in the North West. The importance of cluster building in increasing productivity, innovation capacity and new business has been underlined by the region’s LEPs in their Strategic Plans, especially in Greater Manchester and the Liverpool City Region. First attempts towards this direction have taken place through the establishment of incubators, science parks, growth hubs and links with large companies, however more extensive initiatives should be promoted in order to further enhance interactions between economic actors in the North West.

SMEs will especially benefit from the presence of clusters if they have the opportunity to interact with the international companies and universities that operate in the region and hence gain access to state-of-the-art know-how. The knowledge they gain will assist them in their attempts at the commercialization of innovation in which North West SMEs have been so far performing poorly.

Clusters can also have a positive effect on the interaction between the education and business sector in order to explore, utilize and develop the region’s competitive advantages.

Challenge 3: Access to finance and business support to stimulate R&D and innovation in SMEs

Business support and access to finance have been acknowledged in the region’s LEPs’ Growth Plans as main priorities in the attempt to boost entrepreneurship and, consequently, growth in the North West.

Lack of know-how and access to funding is one of the most important impediments SMEs face, and addressing this issue is crucial in order to increase the amount and turnover of in-house SME innovation, in which, as we have seen, North West SMEs lag far behind the EU average. Providing the necessary business support is vital for firm growth, since as the ‘Innovation in the North of England: Drivers, Progress and Prospects’ report (The SURF Centre, University of Salford, 2010) observes, the problem is not confined to the limited availability of risk capital in the region, but extends to the limited number and quality of ‘investment-ready’ firms.

Understanding the needs of business in the region is crucial in order to provide tailor-made support and consulting which will help SMEs and particularly startups gain access to private finance and resource-efficiency advice. As the Greater Manchester Growth Plan notes, such services mainly require coordination and usually not large amounts of money (Economic Advisory Panel, 2012).

Growth Hubs can contribute towards this direction and should receive adequate funding in order to be effective. Universities have an important role to play in such initiatives, as demonstrated by the case of Boost Business Lancashire, an ERDF-backed, LEP-led growth hub which brings together a range of local actors including Lancaster University and UCLan and offers a single gateway for business support.


2. Innovation Policy Governance in the North West

In the North West Region of the UK, regional innovation policy was managed, up until 2012, by the North West Development Agency (NWDA), one of the nine Regional Development Agencies (RDAs) which were established in England under the Regional Development Agencies Act (The Act) in 1998 and were accountable to parliament via the Secretary of State of the (national) Department of Business Innovation and Skills. The Act outlined five statutory purposes for each Agency:

1. To further economic development and regeneration;

2. To promote business efficiency, investment and competitiveness;

3. To promote employment;

4. To enhance development and application of skill relevant to employment; and

5. To contribute to sustainable development.

The creation of RDAs was considered the first major step regarding the implementation of regional innovation policy in the UK. The House of Commons Business and Enterprise Committee in its 2008-09 ‘Regional development agencies and the Local Democracy’ report (House of Commons Business and Enterprise Committee, 2009) expressed its satisfaction with the fact that the RDAs served a useful function by embodying a much needed level of governance between central government and the local authorities while noting its preference for these types of organisations to be business-led.

After the 2009 General Elections, the newly elected coalition government announced the abolishment of the RDAs and the creation of Local Enterprise Partnerships. The Coalition Programme for Government stated the following:

“We will support the creation of Local Enterprise Partnerships—joint local-authority-business bodies brought forward by local authorities themselves to promote local economic development—to replace Regional Development Agencies. These may take the form of the existing RDAs in areas where they are popular.”

After the official abolishment of the RDAs in March 2012, many of their responsibilities connected to innovation policy were transferred back to the national government and namely the UK Government Department for Business, Innovation and Skills (BIS). The Technology Strategy Board, an executive non-departmental public body of the BIS, is the UK’s national innovation agency and aims to promote and support business-led innovation. The TSB’s policy initiatives focus on establishing networks, enhancing knowledge exchange and facilitating access to funding for SMEs.

Despite the dissolution of the RDAs, the UK government’s stated aim remains the decentralization of innovation policy. Today, at the regional level, the Local Entrepreneurship Partnerships are key players regarding innovation policy design and implementation, although their focus is not strictly on innovation policy per se. One of the main aspects of the rationale underpinning the move from RDAs to LEPs concerns the increased capacity for cooperation between the private and public sector in smaller geographical areas, namely the functional economic areas, compared to the significantly larger regions.

There are currently five LEPs in the North West:

• Greater Manchester Local Enterprise Partnership: Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford, Wigan;

• Lancashire Enterprise Partnership: County of Lancashire, including Blackpool and Blackburn with Darwen;

• Liverpool City Region Local Enterprise Partnership: Halton, Sefton, Knowsley, Liverpool, St. Helens and Wirra;


• Cheshire and Warrington Enterprise Partnership: Cheshire East, Cheshire West & Chester, Warrington; and

• Cumbria Local Enterprise Partnership: Cumbria County (Copeland, Carlisle, Eden, Allerdale, South Lakeland and Barrow and the Lake District National Park).

According to the 2010 Local Growth White Paper (HM Government, 2010) the roles of the LEPs include:

• Working with Government to set out key investment priorities and supporting or coordinating project delivery;

• Coordinating proposals or bidding directly for the Regional Growth Fund;

• Supporting high growth businesses, for example through involvement in bringing together and supporting consortia to run new growth hubs;

• Providing representation on the development of national planning policy and ensuring business is involved in the development and consideration of strategic planning applications;

• Leading changes in how businesses are regulated locally;

• Coordinating approaches to leveraging funding from the private sector;

• Exploring opportunities for developing financial and non-financial incentives on renewable energy projects and Green Deal; and

• Becoming involved in delivery of other national priorities such as digital infrastructure.

The White Paper emphasised the need for these Partnerships to be founded on cooperation between the public and private sector and expressed the expectation that half the boards of the LEPs will consist of business representatives, with business leaders in the chair.

The LEPs work with the TSB, in search of ways to provide support to innovative SMEs with growth potential.

Following the recommendations in Lord Heseltine’s ‘No Stone Unturned: In Pursuit of Growth’ report (2012), the Government issued a response in 2013 in which it expressed its commitment to further empower LEPs in the broader context of an attempt to decentralize policy making in pursuit of increased local growth. This commitment consisted of a number of decisions including the assignment of a senior Whitehall sponsor to each LEP, support for the introduction of Combined Authorities, increased access to funding and the introduction of Local Growth Teams with the aim of working across different departments and contributing to coordinated support to the LEPs.

The 2014 ‘Innovation, Research and Growth’ report by the BIS re-affirmed the central government’s commitment to work with LEPs with the goal of strengthening local innovation systems.

In Manchester, the Greater Manchester Combined Authority was established in 2011 and has since worked with the Greater Manchester LEP to pursue the goals mapped out in the Greater Manchester Strategy. The Greater Manchester LEP has also commissioned a Science and Technology Review which will serve in identifying the region’s strengths and will contribute to the implementation of targeted innovation policy, in alignment with the Greater Manchester Smart Specialisation Strategy.

LEPs are required to submit Strategic Economic Plans, which serve as the basis for the negotiation of Growth Deals with government in order to define the level of flexibility and freedoms LEPs have regarding the design and delivery of policy initiatives. They also produce a Regional Growth Plan and European Structural and Investment Fund (EUSIF) strategy.


The Strategic Economic Plans serve as a guideline for the allocation of funds from the Single Growth Fund, as well as from other sources of government funding such as City Deals, the Regional Growth Fund, Enterprise Zones, the Growing Places Fund and the EU Structural & Investment Funds.

These Plans are expected to set out an agenda for growth for each Local Enterprise Partnership area by taking in to account the economic context at the local level, while also adhering to the relevant national policy for growth. The importance of tapping the region’s innovation potential is underlined in the Strategic Economic Plans of all the North West LEPs.

Regarding the use of EU funding in innovation policy implementation, the ‘Innovation and Research Strategy for Growth’, presented to Parliament by the Secretary of State for Business, Innovation and Skills in 2011, underlined the importance of cooperation between the TSB, the LEPs and local partners that are parts of the ‘innovation ecosystem’ in order to maximize the beneficial impact of EU funding on investments.

The ‘Smart Specialisation in England’ 2014 strategy outlined the responsibilities of the LEPs concerning European Structural and Investment Funds allocation. These consist of:

• Putting together a robust investment strategy for spending their funding allocation;

• Identifying activities and projects to deliver that strategy;

• Utilizing a combination of commissioning, bidding and co-financing as best meets local need;

• Cooperating with partners in order to match funding for those projects;

• Providing support to those projects to deliver their targets;

• Making sure their allocations are spent on time; and

• Monitoring how well they are delivering against their strategies and the programme priorities.

Greater Manchester and the Liverpool City Region opted to create specific strategies of Smart Specialisation.

The delivery of the programmes in the North West will involve a wide range of national and local organisations and the private sector including training providers, social enterprises, SMEs, large companies, investors, and developers, business support and innovation agencies, Chambers of Commerce, the Environment Agency, utility operators, trade unions, the community and voluntary sector, Sci-Tech Daresbury, the Liverpool Science Park, the NHS and Foundation Trusts, Big Society Capital, Social Investment Business, the EIB, the UKTI, the BIS etc.

The Liverpool City Region and Greater Manchester successfully negotiated City Deals. The Greater Manchester Deal included the assignment of new financial powers to the local level, allowing Greater Manchester to ‘earn back’ a share of additional tax revenue from growth generated by £1.2bn of local investment in infrastructure. It also made allowance for the creation of a Greater Manchester Investment Framework with the aim to create synergies between central government, European, and private sector funding in order to further drive economic growth. The Liverpool City Deal included the establishment of a new Enterprise Zone and the provision of a £75m mayoral investment fund.

LEPs compete with each other to attract private investment and gain access to a larger allocation of government funding such as the Regional Growth Fund. However, this has not substantially hindered attempts at collaboration between LEPs.

The Liverpool City Region, Greater Manchester and Cheshire & Warrington LEPs collaborate on the Atlantic Gateway Project with the goal of developing major projects


and enhancing economic growth on a corridor stretching from the Port of Liverpool along the Manchester Ship Canal to Salford Quays

These three LEPs have also agreed to cooperate on a range of activities which include:

• Big Science / Innovation;

• Connectivity / Infrastructure;

• Low Carbon; and

• Higher Level Skills.

The Liverpool EU Structural and Investment Funds Strategy (Liverpool City Region, Local Enterprise Partnership, 2013) underlined additional areas for potential collaboration between North West LEPs such as:

• The establishment of a Sciences / Bio cluster;

• The emerging North West Coast Academic Health Science Network; and

• The NW fund and the two JESSICA financial instruments in the North West (Chrysalis and Evergreen).

Cooperation between LEPs of different regions is also taking place. The Liverpool City Region LEP, for instance, collaborated with the LEPs of Greater Birmingham & Solihull, Coventry and Warwickshire and the Black Country in a successful bid for Regional Growth Funds for the Advanced Manufacturing Supply Chain Initiative.

In order to promote discussion and information sharing between the country’s 39 LEPs, the LEP Network was established in 2011. Its role has grown since its creation and now serves as an important platform for LEP coordination, know-how exchange and engagement with government. It is directed by a Management Board of Chairs which consists of a representative group of LEP Chairs.

Having LEPs divide separate plans can potentially lead to problems concerning sub-optimal duplication, and a lack of coordination and coherence in mapping out policy strategy. This was a challenge emphasised by Sir Andrew Witty in the Preliminary Findings of his Review of Universities and Growth (2013), as well as by a number of international experts and peers during the Peer Review of the Smart Specialisation in England [strategy] report organized by the Smart Specialisation Platform of the European Commission Joint Research Centre (Department for Business Innovation & Skills, 2014).

In order to address this issue, the Government has announced the creation of a Smart Specialisation Advisory Hub (S3AH) which will be designed and developed by the National Centre for Universities and Business. According to the initial proposition consultation paper of August 2014, the S3AH will aim to provide:

• An independent centre of expert advice to increase confidence at local, national and EU levels that a sensible and 'S3-compliant' approach to research and innovation-led growth is being formulated and delivered locally (especially in EUSIF co-funded programmes);

• An 'observatory' to strengthen R&I decision-makers' use of evidence for prioritisation and for improving intervention strategies; for sharing experience; building local capacity and capabilities; and disseminating 'good practice' more broadly; and

• An enabling facility to promote and support purposeful collaboration between major R&I role players - both within LEP areas, across LEPs, and between local, national and EU 'systems';

Apart from the NCUB, other organisations to be involved include the Technology Strategy Board, the LEP Network, the What Works Centre for Local Economic Growth, the Horizon 2020 National Contact Points and the Enterprise Europe Networks.


The BIS has established a network of six local teams whose goal is to work with the LEPs and other local authorities in order to adopt government policy to local needs.

The North West BIS team pursues this aim by:

• Supporting BIS Ministerial business including briefing and visits

• Leading BIS’ relationships with Local Enterprise Partnerships and local government to help them understand BIS national policy priorities, assist in coordination of economic development delivery, and help partnerships build their capacity and capability

• Providing hard and soft intelligence and ensuring effective coordination of government responses to economic shocks, including major company failures

• Maintaining strong links with selected large businesses, key sectors and local business bodies, to build local understanding and buy-in to BIS policies

• Providing BIS with the local intelligence needed to understand the impact of policies and contribute to the development of new policies.


Table 1 Innovation Policy Governance

Description Comment

Degree of general regional autonomy

North West England, consists of ten unitary authorities. They are responsible for almost all local government functions within such areas. North West England can therefore be characterized as a region with a very high level of general regional autonomy. After the abolition of the Greater Manchester and Merseyside County Councils in 1986, power was transferred to the Metropolitan Boroughs, effectively making them Unitary Authorities. In April 2011, Greater Manchester gained a top-tier administrative body in the form of the Greater Manchester Combined Authority, whose purpose is the strategic local governance of Greater Manchester.

In response to Lord Heseltine’s ‘No Stone Unturned: In Pursuit of Growth’ report, the Government committed itself to devolving “resource and responsibility to those places which can demonstrate credible and compelling economic leadership. Local areas will receive powers and budgets previously held nationally in order to pursue local priorities, and local leaders will take on accountability for economic outcomes. Funding and flexibility will reflect the quality of the strategic proposals put forward by LEPs, the commitment of local authorities to work more efficiently and effectively across the LEP area, as well as local need.” (Paragraph 2.5).

Degree of autonomy with regard to innovation policy

In the North West Region of the UK, regional innovation policy was managed, up until 2012, by the North West Development Agency (NWDA). Since the abolishment of the RDAs, many aspects of innovation policy design and delivery were transferred back to the Department of Business, Innovation and Skills (BIS) and the Technology Strategy Board. Significant moves have been made recently in order to increase autonomy at the local and regional level, including increased access to funding for the LEPs. Innovation policy is an important part of the Strategic Economic Plans drafted by the LEPs in cooperation with local partners but their proposals ultimately is subject to approval by the central government. The use of European funding requires a greater role of local authorities in policy design and delivery, however it remains to be seen to what degree policy can be extensively implemented at the regional and local level independently of the central government.

Greater Manchester and the Liverpool City Region opted to create specific strategies of Smart Specialisation.

Set-up of regional governance system (centralised/de-centralised/fragmented)

The UK Government Department for Business, Innovation and Skills (BIS) established a network of six small teams to drive economic growth at local level.

The North West BIS team supports the delivery of policy on the ground by: Supporting BIS Ministerial business including briefing and visits; Leading BIS’ relationships with Local Enterprise Partnerships and local government to help them understand BIS national policy priorities, assist in coordination of economic development delivery, and help partnerships build their capacity and capability; Providing hard and soft intelligence and ensure effective coordination of government responses to economic shocks, including major company failures; Maintaining strong links with selected large businesses, key sectors and local business bodies, to build local understanding and buy-in to BIS policies; Providing BIS with the local intelligence needed to understand the impact of policies and contribute to the development of new policies.


Description Comment

Nature of the process of strategy development (top-down/bottom-up/participatory

The top down Regional Spatial Strategy (RSS) to 2021 for North West England provided a framework for development and investment in the region over the next fifteen to twenty years. It was however abolished in March 2013. The current process is significantly more bottom-up, since LEPs, in cooperation with local partners are required to submit Strategic Economic Plans which serve as the basis for the negotiation of Growth Deals with government in order to define the level of flexibility and freedoms LEPs have regarding the design and delivery of policy initiatives. They also produce a Regional Growth Plan and European Structural and Investment Fund (EUSIF) strategy. The Strategic Economic Plans serve as a guideline for the allocation of funds from the Single Growth Fund, as well as from other sources of government funding such as City Deals, the Regional Growth Fund, Enterprise Zones, the Growing Places Fund and the EU Structural & Investment Funds. These Plans are expected to set out an agenda for growth for each Local Enterprise Partnership area by taking in to account the economic context at the local level, while also adhering to the relevant national policy for growth.

Local Government Secretary Eric Pickles said in March 2013: “This government is committed to localism and greater local decision-making in planning. The flawed top-down targets of regional planning, centrally imposing development upon communities, built nothing but resentment. They will hang over communities no more. We are committed to decentralising as much power as possible and these important and popular planning reforms will bring a significant shift in power to local people.”

Intra- and inter-regional co-operation

Intra-regional co-operation: The Liverpool City Region, Greater Manchester and Cheshire & Warrington LEPs collaborate on the Atlantic Gateway Project with the goal of developing major projects and enhancing economic growth on a corridor stretching from the Port of Liverpool along the Manchester Ship Canal to Salford Quays These three LEPs have also agreed to cooperate on a range of activities which include: • Big Science / Innovation

• Connectivity / Infrastructure

• Low Carbon

• Higher Level Skills

Inter-regional cooperation: In order to promote discussion and information sharing between the country’s 39 LEPs, the LEP Network was established in 2011. Its role has grown since its creation and now serves as an important platform for LEP coordination, know-how exchange and engagement with government. It is directed by a Management Board of Chairs which consists of a representative group of LEP Chairs. The Liverpool City Region LEP collaborated with the LEPs of Greater Birmingham & Solihull, Coventry and Warwickshire and the Black Country in a successful bid for Regional Growth Funds for the Advanced Manufacturing Supply Chain Initiative

The Liverpool EU SIF Strategy underlines additional areas for potential collaboration between North West LEPs such as: • The establishment of a Sciences / Bio cluster

• The emerging North West Coast Academic Health Science Network

• The NW fund and the two JESSICA financial instruments in the North West (Chrysalis and Evergreen)


In the written evidence submitted to the BIS Ninth Report of Session 2012–13 on LEPs by Professor David Bailey and Gill Bentley in conjunction with the Regional Studies Association the Greater Manchester LEP is mentioned as an example of good practice. Specifically, it is noted that:

“The possibilities for positive action have been illustrated in Manchester where one LEP covers the Greater Manchester area, where businesses are engaging with Local Authorities in a ‘creative tension’ and where the LEP has a clear plan of where it wants to go through the research and intelligence gathered for the Manchester Economic Strategy. But Manchester has influence, benign political borders and local authorities willing to work together in way that reflects functional economic space. This long-run track record of partnership working and an agreed strategy meant that the LEP could ‘hit the ground running’. That clearly is not the case everywhere, […].” (Business, Innovation and Skills Committee: Evidence, p.51-2)

Table 2 Innovation Policy Institutional Set-Up and Available Human Resources

Policy stage Primary organisation

Number of personnel directly in charge

Total number of employees

Change in the number of personnel directly in charge over the last five years

Summary assessment

Strategy development

LEPs develop strategies at city region level2; TSB develops national strategy

- - - Limited regional level strategy develop-ment

Programming No regional innovation programming

- - - -

Implementation Implementation is diffused to various partnerships; national instruments are implemented by TSB

- - - -

Monitoring and evaluation

As above - - - -

2 See: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/7524/Guide-to-City-Deals-wave-1.pdf


3. Innovation Policy Instruments and Orientations

This section provides information on the nature and content of both strategies and actual policy measures implemented in the North West of England.

Other than the governance section, its focus is less on persisting characteristics which can at best be adapted in the long term (e.g. regional autonomy), but mostly on decisions that can be taken, strategies that have been developed and support schemes that have been launched under the current framework conditions (e.g. regional and sub-regional innovation strategies, ERDF operation programming, individual programmes).

3.1 The Regional Innovation Policy Mix

The abolition of the RDAs resulted in a vacuum at the regional level of the North West in terms of governance and implementation. The structures and instruments have changed and are still changing. LEPs are responsible for the delivery of a significant part of the EU Structural and Investment Funds (ESIF) for 2014-2020. According to the 2014 BIS Innovation Report, at least £660m (€800m) of these funds will be directed towards supporting innovation, in ways outlined in the Strategic Economic Plans.

At the national level, LEPs compete for funds including city deals, the growing places fund and the regional growth fund.

The BIS Innovation Report notes that an attempt is being made to implement recommendations in the Witty Review (2013) regarding the ways in which universities can have positive impact on growth, including cooperating more closely with LEPs.

Reference is made to the concept of Smart Specialisation which is a pre-condition for EU Structural Funds, and a strategic approach as a means to develop and utilize regional and local competitive advantages. North West LEPs have incorporated aspects of this approach in their Strategic Economic Plans in order to align themselves with the smart specialisation principles adopted by the ESIF. Additionally, certain LEPs have put together separate RIS3 plans.

One of the ways in which LEPs provide support to innovative SMEs is through the establishment of Growth Hubs, which provide companies with access to a wide range of government and local services, as well as information and contacts. The Strategic Economic Plans submitted by cities in the North West underline the importance of these Hubs in strengthening local innovation systems by facilitating and promoting interaction and knowledge exchange.

The orientation of the UK government’s regional policy in general and innovation policy in particular points towards a mix of a top down and bottom-up approach, as underlined in the England RIS3 report, with attempts being made to shift towards a decentralized model with significant private sector participation. The government’s stated goal is for policy strategy to be devised based on a central government-supervised, collaborative process which will bring together a wide range of local actors from government, business and education. This rational is embodied in the process of Strategic Economic Plan drafting.

There is a broad mix of policy measures in place for innovation in the North West region. The focus of this section is on measures that are currently in place or a set up to start in the upcoming years targeted at specific cities (sub-regions) in the North West region. An overview of these measures is shown in Table 3-1. The policy measures address a range of different aspects of innovation, which will be described in this section.


The Greater Manchester Growth Deal3 sets out a multi-million pound investment programme that will support further economic growth. This Growth Deal has also brokered agreement, between Greater Manchester and Government, to trial a series of public service reform programmes that will provide more effective support to residents and drive down the cost of public services. Two of the key priority areas (see table 3.1) will be described here.

Greater Manchester has the potential to increase its long-term growth rate, access international networks, enjoy stronger connections with the rest of the world and contribute significantly to continued economic recovery. Despite the strength of Greater Manchester’s business support services the Growth Deal recognised that further work could be undertaken to better integrate local services with national business support. In addition, through the Growth Deal, Greater Manchester has also secured an extra £625,000 of funding to enhance business support service further in 2015/16.

As part of the planned work, Greater Manchester Local Enterprise Partnership will continue to provide a clear growth hub model that joins up national, local, public and private business support, which intends to make it easy for them to get the right support at the right time.

Greater Manchester Local Enterprise Partnership, Manchester City Council and Salford City Council will commit to continuing SME voucher take-up as part of the Superconnected Cities Programme, to support extension of superfast broadband coverage to 90% of UK premises by 2016, via existing broadband projects.

From the central government side, the Technology Strategy Board is committed to supporting Local Enterprise Partnerships in developing the emerging growth hubs and in exploring how Local Enterprise Partnerships can help drive up local business awareness and engagement in Technology Strategy Board programmes and initiatives. Furthermore, UK Trade and Investment will commit to effectively communicating its strategic priorities to Local Enterprise Partnerships and where possible help them access relevant opportunities. UK Trade and Investment will double the number of Partnership Managers to 16. This will ensure that UK Trade and Investment can work more closely with Local Enterprise Partnerships and help build their capability to secure more inward investment.

The investment secured by the Greater Manchester Growth Deal not only targets businesses but also secures Greater Manchester, Cheshire and Warrington and the North West’s place as a major centre for Life Science. The Life Science sector is hugely important to the UK economy, generating turnover of over £52bn and employing an estimated 176,000 people across nearly 5,000 companies. The industry is high-tech, innovative and diverse spanning: pharma; med tech and medical biotechnology. It has furthermore applications across many other sectors. The Life Science sector has a key role to play in the continued rebalancing of the UK economy according to the Cabinet Office.4 Greater Manchester and Cheshire and Warrington have large concentrations of highly skilled and entrepreneurial scientists.

Through this Growth Deal Greater Manchester and Government will establish a £40m Greater Manchester and Cheshire and Warrington Joint Life Sciences Fund. This fund will support the development of the life sciences sector in the North West. Investment will be made in companies in the Life Science sector (spanning pharma, biotech, diagnostics, CROs, healthcare technologies and medical devices) in the Greater Manchester and Cheshire Local Enterprise Partnership areas, supporting

3 Growth Deals provide funds to local enterprise partnerships or LEPs (partnerships between local authorities and businesses) for projects that benefit the local area and economy. The first wave of Growth Deals was announced on 7 July 2014.

4 The Cabinet Office has provided a document detailing the Greater Manchester Growth Deal, available at: https://www.gov.uk/government/publications/greater-manchester-growth-deal-2014


them to grow and expand through investment in R&D, product development, skilled staff, equipment, premises and accessing international markets. The fund will be available to businesses seeking finance to support a broad range of needs from pre-start up and early stage development through to expansion plans for trading businesses.

The European Structural and Investment Funds (ESIF) for Cheshire and Warrington aims to support the territory to become one of the strongest performing economies, driving forward economic growth and productivity in Cheshire and Warrington. The strategy set out by Cheshire and Warrington focuses on ten thematic objectives, three of them focussing on innovation will be discussed here. The thematic objective Strengthening Research, Technological Development and Innovation will support: (a.) smart specialisation collaborative research between enterprises, universities/research institutions and public institutions, (b.) support the commercialisation of new products and process and (c.) invest in new innovation space, facilities and equipment.

There is a need to innovate in systems, processes, products and services in order to gain and maintain competitive advantage. Cheshire and Warrington is home to a number of innovation-intensive clusters making this requirement particularly important. Broadband can play an important role in supporting improved business performance, raising economic output and supporting job creation. Ensuring businesses have access to new and emerging ICTs is therefore important to support economic growth. The thematic objective on ICT will help businesses to benefit from ICT, by increasing awareness and exploring opportunities for new product and service development. It will furthermore invest in ICT infrastructure where the market will not. Cheshire and Warrington has a strong SME base but there is a need to support businesses to respond to challenges and exploit opportunities for growth, enabling them to start up, grow and prosper in a competitive market place. The ESIF programme will offer key sector support packages by providing first class business support, ensuring awareness of funding opportunities and investment readiness.

The Cumbria LEP has identified four key economic assets that provide the rationale for the development of four strategic priorities. The first one is advance manufacturing growth. Manufacturing contributes £2.1b in Gross Value Added (GVA), 25% of the county of Cumbria GVA, yet the sector only employs 15% of the workforce. The aim of this priority is to address identified barriers and to maintain and grow the manufacturing base. Investments will be made in the several programmes amongst others also in an advanced manufacturing initiative which will be discussed in section 3.2. The second asset is the nuclear industry, which is also one of UK’s key assets, with a global

reputation for excellence and innovation. Sellafield employs around 10,000 people, over half the UK’s nuclear workforce. The challenge is to use the nuclear expertise and investments as a means of diversifying and growing the local economy. The third asset is the rural and visitor economy with 38m visitors in 2012 (8% from overseas) generating £2.1b of visitor expenditure for Cumbria’s economy and providing 31,200 FTE jobs. With forecasts for the tourism sector to grow nationally by 4% p.a. through to 2025. The fourth key asset in Cumbria is the connectivity of the M6 Corridor. North Cumbria is at the geographical centre for distribution and redistribution with ample land in key locations to increase storage and warehousing facilities. Logistics currently


only represents just over 4% of employment and GVA in the county, but forecasts show potential for 6% growth in employment by 2024 - more than double the projected rate of employment growth across all sectors.

The Lancashire Strategic Economic Plan SEP provides the framework to the Growth Deal with Government and will direct the resources within the agreed European Structural Investment Fund (ESIF) strategy. The Lancashire LEP’s key programmes and policy flexibilities are amongst others:

• A sector development programme seeking £11m in competitive Growth Deal funding to improve the capability and capacity of Lancashire's competitive strengths in advanced manufacturing - especially in aerospace, automotive and energy;

• A major research and innovation programme seeking £57.2m in competitive Growth Deal funding to enable Lancaster University and the University of Central Lancashire (UCLan) to expand and develop national centres of excellence linked to the delivery of local economic priorities;

• A skills for growth programme seeking £47m in competitive Growth Deal funding, underpinned by a capital investment strategy consistent with agreed economic priorities, including a new Apprenticeship Hub to drive-up SME engagement and the local take-up of apprenticeships as career pathways;

• An enhanced business growth hub requiring £12.8m in competitive Growth Deal funding to strengthen the support Boost can deliver to high growth SMEs.

Liverpool City Region’s Growth Plan takes a twin-track approach. First, where the City Region has genuine comparative strengths and competitive advantages investment will be prioritised and targeted to drive economic growth. Second, and across all aspects of the economy and in all sectors, the plan will ensure that an environment is created that supports growth and that will see all people and places benefit in a sustainable way. One of the investments will be targeted at establishing a globally connected City Region, driving the attainment of the SuperPORT5 concept and enhancing our internationally recognised visitor economy assets. The Liverpool City Region will exploit these opportunities to establish itself as a centre for trade and export led growth, as well as a leading location for inward investment. Furthermore an £18bn investment is taking place in off-shore wind energy in the Irish Sea and with the River Mersey the geographical location of Liverpool is unique. The aim of this investment it capitalise on this natural asset base. The City Region will in addition aim to exploit the science and innovation strengths including the nationally important Daresbury Science & Innovation Campus (SIC), and major companies and internationally known universities, in addition to the latent talent of people in sectors such as advanced manufacturing and digital technology.

5 See: http://www.liverpoollep.org/priorities/superport.aspx


Figure 7 Governance Itinerary to the Liverpool City Region Innovation Plan 2013: Participation and Ownership

Source: http://s3platform.jrc.ec.europa.eu/documents/10157/226062/LCR%20Innovation%20Plan%20and%20RIS%203%20OCT%2013.pdf

With this broad policy mix targeting specific sectors and setting out a variety of strategies, the North West region is targeting amongst others the challenges of the region identified in section 2.3, especially increasing access to finance and business support. The different strategies have also stressed the importance of established sectors and the need to keep investing in these, including initiatives that enhance interactions with other actors in the North West region such as stressed in the Liverpool and Greater Manchester Growth deals.


Table 3 Existing Regional Innovation Support Measures

Title Duration Policy priorities Budget Organisation responsible More information / Link Greater Manchester’s Growth Deal

2015-2021 Securing Greater Manchester and the North West’s place as a major centre for Life Sciences. Enhancing further education facilities, creating more apprenticeships and maximising skills investment. Major Investment in public transport and highways. Reforming public services so that they reduce duplication and are designed around the needs of residents. Providing effective business support services.

£556.7m The Greater Manchester LEP Growth Deal Greater Manchester

Cheshire and Warrington -European Structural and Investment Funds

2014-2020 Strengthening Research, Technological Development and Innovation. Enhancing Access to, and use and quality of, ICT. Enhancing the Competitiveness of Small and Medium Enterprises

£19.8m, £5.2m and £21.3m respectively

Cheshire and Warrington LEP ESIF Cheshire and Warrington

Cheshire and Warrington Growth Deal

2015-2021 Transport improvements in the Warrington area. These critical improvements will enable better access to existing business parks and to the development of new sites for housing and employment. Supporting the expansion of science & innovation in the North West through a new joint Life Science Investment Fund with Greater Manchester which will support new science start-up businesses.

£192.7m Cheshire and Warrington LEP Growth Deal Cheshire and Warrington

Cumbria Strategic Economic Plan

2014-2024 Advance manufacturing growth Nuclear and energy excellence Vibrant rural and visitor economy Strategic connectivity of the M6 Corridor

£12b, £24m for 2015/2016

Cumbria LEP Cumbria SEP

Lancashire Strategic Economic Plan

2015-2025 Establishing Lancashire as a the natural home for high growth companies, with a clear focus on maximising our competitive economic strengths Reclaiming Lancashire's role as a national centre for advanced manufacturing Maximising the economic value of Lancashire's centres of research and innovation excellence

£233.9m Lancashire LEP Lancashire LEP


Title Duration Policy priorities Budget Organisation responsible More information / Link The Liverpool City Region Growth Plan and Strategic Economic Plan (SEP)

2014-2020 Investment will be targeted at establishing a globally connected City Region. Maximise the economic growth opportunity from being a centre for energy led and low carbon growth To build on its status as a hub for innovation, science and creativity.

£242.5m Liverpool LEP Liverpool SEP

Knowledge Action Network

n/a The Knowledge Action Network is a programme in the North West, designed to help businesses, from sole traders to those medium-sized, to uncover and address their business challenges. The programme is fully-funded by the European Regional Development Fund.

Organised by University of Chester, the University of Cumbria, and Manchester Metropolitan University

Knowledge Action Network

Centre for Global Eco-Innovation

2012-2015 The Centre for Global co-innovation has been formed with the following objectives: Increase the innovation performance of the regions SMEs. Increase the level of collaboration between SMEs and universities. Capitalise on the use of graduate talent to overcome low levels of absorptive capacity in SMEs. Increase the export performance of the regions SMEs in markets for low carbon and environmental goods and services. To increase the economic performance of the region. To deliver significant savings in greenhouse gas emissions, water, waste and material use.

£9.8m The £9.8m Centre for Global Eco-innovation (CGE) is part financed by Lancaster University, the University of Liverpool and Inventya Ltd and via £4.9m of funds from the North West operational programme for European regional development funds.

Centre for Global Eco-innovation

Smart - 2014-15 - Round 3

2014-2015 The scheme supports SMEs carrying out R&D which offers potentially significant rewards and that could stimulate UK economic growth. Three types of grant are available: Proof of market; Proof of concept; Development of prototype.

n/a The Technology Strategy Board Smart 2014-15 scheme

Source: RIM Plus repository (North West of England/ UK).


3.2 Regional Policies and Initiatives in Support of Advanced Manufacturing

Manufacturing was central to the UK’s recovery from recession according to the Chancellor of the Exchequer in his March 2011 budget statement6. The BIS and Government Office for Science report, ‘The future of manufacturing’ (2013), provides an overview of pressures on the sector and suggests policies to prepare for these challenges. The four key characteristics of manufacturing over the next 20 years are identified by this report as: more responsiveness to consumers and customers; exposure to new markets; more sustainable processes and products; increasing dependence on high skilled workers.

The North West has the second largest advanced manufacturing and nuclear sector in the UK, with 314,000 jobs in the first quarter of 2014, the highest figure for any UK region (House of Commons, 2014). The report ‘Advanced manufacturing and nuclear in the North West’ underlines the diversity of the advanced manufacturing production base in the region as a key strength (see New Economy Manchester, 2013). As a whole, manufacturing is a major generator of wealth for the North West, generating gross value added per employee of approximately £51,000 per employee per annum in 2011. This was higher than the national average of £35,000 per employee across all sectors. Between 2000 and 2012 there was a 35% reduction in manufacturing employment in the North West. Significantly, the rapid decline in manufacturing employment has not translated into declines in manufacturing output. Labour productivity in the sector has grown rapidly over the same period, having experienced a rapid increase in worker productivity.

Specific sectors in which the North West holds a competitive advantage include:

• Aerospace (Lancashire's aerospace industry is the largest single concentration of aerospace activity in the UK);

• Automotive (e.g. Jaguar Land Rover in the Liverpool City Region);

• Building of ships & floating structures;

• Pharmaceuticals / bio-manufacturing;

• Nuclear;

• Chemicals (the North West is home to the biggest concentration of chemicals manufacturing in the UK); and

• Food & drink.

The Advanced Manufacturing Report for North West Regional Leaders’ Board (2013) emphasised a number of challenges the advanced manufacturing sector faces in its quest to contribute to the future of industry in the North West region. These include:

• Better access to a skilled workforce;

• Promotion of the sector to a wider audience;

• Enhanced collaboration between industry and academia;

• Upgrade of premises to correspond to the changing need of advanced manufacturing; and

• Realization by the government that sectors such as advanced manufacturing have longer investment pipelines than other industries.

6 HC Deb 23 March 2011 c966 "We want the words: “Made in Britain”, “Created in Britain”, “Designed in Britain” and “Invented in Britain” to drive our nation forward—a Britain carried aloft by the march of the makers. That is how we will create jobs and support families. "


Examples of initiatives supporting advanced manufacturing in the North West and addressing some of the challenges identified in the Advanced Manufacturing Report include the ERDF Open Call for the Enhancing Manufacturing Advisory Service (MAS) Activities in the North West of England, the Advanced Manufacturing Supply Chain Initiative (AMSCI), the Advanced Manufacturing Initiative in Cumbria and Aerospace Supply Chain Excellence (ASCE) 2.

Enhancing Manufacturing Advisory Service (MAS): The Manufacturing Advisory Service (MAS) was first established in 2002 and expanded in 2004 (BERR, 2008). Its purpose is to help manufacturing companies improve their productivity and competitiveness by offering them professional advice and expert support. The MAS has in the past been funded by the nine Regional Development Agencies (RDAs) in England and by the Devolved Administrations in Scotland and Wales and has operated through Regional Centres. Although RDAs have now been abolished by the Government, the MAS, however, has been retained and re-launched as a national service. In December 2010 BIS announced funding of £50m for the service over the period 2011-12 to 2013-14.

On 14 October 2011 the Government announced that the MAS would become be nationally rather than regionally provided, and that it would specifically focus on SME growth:

The Manufacturing Advisory Service will continue to deliver a national service to all manufacturing businesses in England and Wales but the new consortium now means that there will be a specific focus on:

• driving business growth through strategic and technical support for SMEs developing advanced manufacturing capabilities and creating high value jobs;

• enabling business improvement with manufacturers operating in global supply chains; and

• linking SMEs with the apprenticeship programme delivering a minimum of 1,250 engineering and manufacturing apprenticeships nationally.

The new national Manufacturing Advisory Service was launched on 3 January 2012.

MAS is delivered locally by regional offices, also in the North West region. The team is co-located with the Greater Manchester Business Growth Hub and also works closely with other local growth hubs and partners across the North West (MGC, 2013). Working as a core of four main advisors, the team has provided assistance to over 1000 businesses in 2012/13 and with new advisors now aims to build on that record of success. The MAS services are open to any company provided they are engaged in manufacturing regardless of size. The service is mainly provided to SMEs. The grants for SMEs range between £300 and £3,000. A standard MAS project will deliver a return of at least 66:1 against the initial investment.7

Advanced Manufacturing Supply Chain Initiative (AMSCI): Vince Cable, the Secretary of State for Business, Innovation and Skills since 2010 and Member of Parliament has cited problems with supply chains as “a classic example of the sort of market failure that a proper industrial policy should address.” (House of Commons, 2014).

Often supply chains in the UK involve firms that are geographically dispersed. This means that the companies that design, commission and produce the finished product (the ‘prime’ or ‘first tier’ producers) do not have quality control they require over the supply chain, they are vulnerable to potential supply disruption and often have to pay a premium in periods when exchange rates are competitive. The Government has argued that these factors discourage manufacturers from operating in the UK8. In

7 DG Enterprise and Industry, MAS-North West, RIM Plus repository. 8 Vince Cable Speech to CBI launching Advanced Manufacturing Supply Chain Initiative, 11 December 2011.


order to overcome this problem, the Government wants to encourage the “co-location” of supply chains and prime producers. This involves stimulating the growth of suppliers in the UK. The key mechanism through which the Government hopes to achieve this is the Advanced Manufacturing Supply Chain Initiative.

The Government Fund of £100m was based on an existing £25m Regional Growth Fund (RGF) bid by a group of Local Enterprise Partnerships (featuring Liverpool City Region, Black Country, Coventry and Warwickshire and Greater Birmingham and Solihull), which focused on supporting automotive and aerospace supply chains in those geographical areas. After initial success of the first two rounds, additional funding of £120m for two further AMSCI rounds was announced in the 2012 Autumn Statement. This will support research and development, skills training, and capital investment to help UK supply chains achieve world-class standards and encourage major new suppliers to locate in the UK.The primary purpose of the Liverpool City Region Programme and West Midlands is to help support the development of productive capacity in the automotive and aerospace supply chains in the four LEP areas of Black Country, Coventry and Warwickshire, Greater Birmingham and Solihull and Liverpool City Region.

Advanced Manufacturing Initiative in Cumbria: The Cumbria LEP strategy provides for a major Advanced Manufacturing Initiative to ensure the skills and supply chain growth is provided to fuel the developing manufacturing sector. This will include a Cumbria Business Growth Hub offering specialist advice and support. Providing amongst other access to finance for innovative products and process improvement, R & D, capital investment and strengthening the supplier links. The Growth Hub will collaborate with other LEPs, the Manufacturing Advisory Service and UK Trade & Investment to exploit opportunities for international trade and to secure new mobile inward investment and reinvestment. Furthermore an Advanced Technology Training Centre will be developed at Furness Colle and engineering facility at Kendal College to assist in skills development. The LEP’s strategy intends to unlock private sector investment to support the already buoyant manufacturing base in Cumbria, which has a particular concentration around Ulverston and the Furness peninsula.

The Aerospace Supply Chain Excellence (ASCE) 2 Programme is a £11.4m programme created by the Northwest Aerospace Alliance (NWAA) to improve the performance of the Northwest Aerospace sector. The NWAA was formed in 1994 to represent and support the Aerospace Industry across the North West of England. NWAA represents approximately 25% of the UK aerospace industry with over 220 member companies and a combined turnover in excess of £7bn. It receives £6.4m public sector funding from the European Regional Development Fund (ERDF) and BIS - formerly the Northwest Regional Development Agency (NWDA). It also receives close to £5m in contribution in kind from the Northwest aerospace companies and the three main aerospace work providers in the region the Northwest Primes (BAE SYSTEMS, Airbus UK & Rolls-Royce plc.).

The ASCE 2 Programme builds on the successful foundations created by the £8m Aerospace Supply Chain Excellence (ASCE) 1 programme, with both programmes strongly supported by the Northwest Primes9. The objective of the ASCE2 Programme is to secure a competitive base of world-class aerospace supply chain companies in the North West of England. The Northwest Aerospace Alliance will focus on assisting a minimum of 45 Aerospace Companies to work as a collective; forging close coupled links between industry, academia and associated support organisations through the continued development of the “Super Cluster” concept. The ASCE 2 programme focuses on delivering 5 key work streams, notably Commodity Groups, Skills and Image, Innovation, Shared Services and Extended Enterprise, each encouraging collaborative behaviour and close coupled thinking.

9 See: http://www.aerospace.co.uk/projects/asce2


3.3 Appraisal of Regional Innovation Policies in the North West

A main innovation policy challenge in the North West Region, as in other UK regions was related to the institutional restructuring after the removal of the Regional Development Agencies and the emergence of sub-regional partnerships. Although it is too early to evaluate and assess the recent changes, the dynamism of the many partnerships, and the leadership which is evidenced by the many involved local actors is very promising. However, the public resources of the new local institutions are limited, which makes it difficult to develop and implement innovation support which is not provided by private parties. For these public policy interventions the region is largely reliant on ERDF funding and on competing for funding from national programmes.

The strengthening of local level governance in the North West also has a positive side, since LEPs, working together with a wide range of local actors in the private, public and education sector can more accurately identify strengths and weaknesses at the local level and provide tailor made, coherent place-specific solutions in order to tap into under-utilized innovation and growth capacities in the region.

Regarding the three challenges identified in the first section of this report we will assess to what extent the policy responses seem appropriate to address these challenges.

Concerning cluster building, there have been in recent years encouraging signs regarding Science-Industry cluster formation in the North West.

Manchester Science Parks has committed to developing the large-scale life sciences park in Alderley. The first step has been taken with the establishment of BioHub, a bioscience park which was established in 2013 and has attracted a number of SMEs engaged in innovative drug discovery and development. The announcement in 2014 that AstraZeneca will move its R&D activities (with 1,600 roles relocating) to Cambridge and that it has sold Alderley Park to Manchester Science Parks (MSP), tells that it is not an easy challenge, but the BioHub has 38 high calibre companies employing more than 200 people.

Sci-Tech Daresbury is also a good cluster example. By bringing together the private, public and higher education sectors in an open innovation model, it demonstrates how a cluster can serve in driving innovation, enabling SMEs to interact with researchers and international companies and providing business support. Sci-Tech Daresbury is internationally recognised through the reputation of the STFC Daresbury Laboratory and Cockcroft Institute. Currently there are over 400 scientists working in a variety of scientific fields including accelerator science, high performance computing, and sensors and detectors. It operates large-scale facilities used by many UK universities as well as an increasing number of industrial companies (e.g: IBM, Intel, BAe Systems). It is home to over 100 high-tech companies employing nearly 500 people in areas such as advanced engineering, digital/ICT, biomedical and energy and environmental technologies. These vary from start-up companies to more mature SMEs to international corporates such as IBM and Perkin Elmer. About one in six companies have their headquarters outside the UK. A major new £30m government investment was announced in 2013. The investment is designed to establish a leading position in energy efficient supercomputer software development to meet big data challenges.


Figure 8 Sci-Tech Daresbury

As assessed by the Rt Hon David Cameron MP, Prime Minister (August 2011): “You have got a brilliant collaboration here of government-sponsored science, university-sponsored science, defence-industry science, health science, but also a thriving private sector… Here is a successful model, here is great collaboration between scientists and businesses, here is something to build on and an Enterprise Zone can make Daresbury even more successful in the future than it has been today.”

It remains to be seen if science-industry clusters can expand and become internationally competitive, and can increase its success in competing for national funding for innovation, e.g. in the form of a Catapult centre which is lacking in the North West.

Regarding access to finance and business support to promote innovation in SMEs, growth Hubs have been designed by the LEPs in collaboration with local actors, central government and the private sector. By providing tailor made business support and networking opportunities their design is aimed at the right direction in an attempt to help SMEs to gain know-how, increase their innovation capacity and enhance their growth potential. Furthermore, apart from simply facilitating access to finance, the consulting they offer is geared towards making SMEs ‘investment ready’, hence addressing a fundamental problem firms in the region face. The ‘Research on Understanding Localised Policy Interventions in Business Support and Skills’ report (2013) offered a positive assessment of the Greater Manchester Business Growth Hub and described it as a good example for the other Growth Hubs in the North West to follow.

The problem of the lack of correspondence between skills acquired in Higher Education and competencies actually required by the labour market needs to be more extensively addressed. There have been some positive steps in building links between universities and business, and Higher Education organisations have played an important role in the design of policy initiatives such as growth hubs, and the emergence of new clusters will further encourage cooperation with the private sector.

Regarding the connection of universities to the labour market in particular, the Greater Manchester Business Growth Hub has put together referral agreements with the University of Manchester, MMU and Bolton with the aim of linking client businesses to graduate placement opportunities. Furthermore, it is working alongside the Skills Funding Agency (SFA) in order to provide clients with access to services such as apprenticeship schemes. More such initiatives should take place and Growth Hubs have an important role to play in that respect.

The awareness in the region concerning the importance of advanced manufacturing is high and there are several good practice policy initiatives in this respect. Although


many strategic reports are very persuasive in identifying cases of technological excellence (see for instance NWBLT, 2014), most reports and strategies are less persuasive in addressing the identified weakness in business innovation performance of a large part of the SMEs in the region.

There is a current lack of (ex-ante and ex-post) evaluation evidence to assess the impact of current and planned innovation support measures. Since high quality policy evaluations require budget and expertise, there is a danger that the evaluations will mostly be limited to self-monitored provision of descriptions of activities and numbers of beneficiaries.

3.4 Good Practice Case: the Greater Manchester Business Growth Hub

The Greater Manchester Business Growth Hub was launched in November 2011. It was designed as part of a network of five ‘Growth Hubs’ that would take over the responsibility of providing business support services in the North West from the Northwest Development Agency (NWDA).

The NWDA cooperated with the region’s then emerging Local Entrepreneurship Partnerships in designing the policy initiative, in a process overseen by a Regional Leaders Board. A wide range of local, regional, national public and private sector actors contributed to the design process, including Higher Education organisations, business networks, high-growth specialists, the Greater Manchester Chamber of Commerce, North West Business Angels and the UKTI.

The goals of the organisation include:

• Providing local businesses with tailor-made solutions to the problems that hinder their growth potential;

• Becoming a key partner of businesses with a strong focus on growth and the businesses that will have a role to play in increasing employment/ GVA growth;

• Developing a community of companies and growth support providers;

• Offering a business growth support service for Greater Manchester that integrates the best public and private growth services;

• Establishing a cross-referral process with publically funded programmes to ensure the maximum number of Greater Manchester businesses benefit from them; and

• Addressing LEP, European and national growth priorities.

Given the low levels of productivity, innovation and entrepreneurial activity in the North West as a whole, the creation and development of the Greater Manchester Business Growth Hub signifies an important initiative in an attempt to tackle fundamental weaknesses of the local and regional economy. It also helps businesses adapt to the challenges emanating from the rapid changes in the field of digital technology.

The Growth Hub, in collaboration with its partners, provides a range of services in support of innovation:

• Open Innovation for SMEs: Helps businesses drive innovation and develop new products by collaborating with individuals from universities or other companies using the Innovation Cells methodology. Participants work on developing the technical and commercial feasibility of a new product, or service, while also learning new problem-solving techniques;

• European Collaborative R & D: Bid writing and bid management support for UK and EU collaborative research and development funding programmes, innovation strategy consulting;

• Excellence in Innovation: A workshop that helps firms evaluate and enhance their innovation capacity;


• Managing Innovation: A service that helps companies identify and pursue priorities in order to achieve sustainable innovation; and

• Leading Innovation, Inspiring Creativity: Provides businesses with ideas regarding ways to maximize the utilization of their creative resources

In the early stages of its development, the Business Growth Hub has succeeded in establishing partnerships with more than 100 public and private organisations at the local, regional and national level, such as Creative England, C-Tech Innovation, Enterprise Europe Network, Ernst & Young, the Greater Manchester Chamber of Commerce, the Greater Manchester Local Enterprise Partnership, Innovate UK, HSBC.

A Public Provider Engagement Strategy has been put in place in order to integrate other types of national and local business support services within the Growth Hub model.

Furthermore, focus has been placed on the expansion of the Hub Referral Network, which has grown to over 125 organisations and attracted 2,400 enquiries against a target of 2,000 during its first year of operation.

The ‘Research on Understanding Localised Policy Interventions in Business Support and Skills’ report, published in December 2013, interviewed a number of partnering organisations and stakeholders and concluded that the Growth Hub had succeeded, in a short period, in providing benefits which include:

• Improved co-ordination with national support programmes;

• Helping drive demand and deal flow;

• Provision of a more locally tailored offer;

• Leveraging additional funding.

The Business Growth Hub reports to the Strategic Board for Business Growth, which is accountable to the Greater Manchester LEP Board and the non-profit Economic Solutions is in charge of performance management and the monitoring procedures. The final evaluation of the project, which will be implemented in accordance with the relevant European and national guidelines, is expected in mid-2015.

In January 2014, the Business Growth Hub secured £4.8m from the European Regional Development Fund and £4.4m from the Government’s Regional Growth Fund through the Greater Manchester Combined Authority. The Greater Manchester Growth Deal, published in July 2014, allocated £625,000 for 2015/16 to support core Growth Hub activities. It also contained a commitment by the central government that the Technology Strategy Board will support the Local Enterprise Partnerships and the Growth Hub in their attempts to enhance business awareness and engagement in TSB programmes and initiatives.

3.5 Possible Future Orientations and Opportunities

From the previous sections it is clear that because of the many recent changes it is difficult to give an accurate assessment of both the current situation as well as the possible future directions. The re-structuring of the innovation policy landscape is a learning process with many uncertainties about the outcome. With the abolishment of the Regional Development Agencies the former policy making and implementing routines and capabilities have changed, and it is too early to assess in which way the situation has improved or not. Evaluations concerning the recent changes do not exist yet. It is therefore difficult to conclude with evidence-based recommendations, so the below mentioned possible future orientations and opportunities for innovation policy in the North West should therefore be seen as indicative suggestions and considerations on possible future directions. The following recommendations can be made:


Address the weaknesses in the business innovation performance of SMEs

The focus in many reports concerning innovation in the North West is on the aspects of the innovation system, which already show a strong performance. The identified weakness in section 1 concerning the business innovation performance of SMEs in particular is less often addressed in the strategies and studies. For instance, the recent report ‘Exploiting the excellence; England’s North West: where world-class science underpins wealth-creating innovation’ (The North West Business Leadership Team, March 2014) has this focus on supply-driven wealth-creation. This approach should someway be connected to more demand-oriented innovation policies which aim to up-grade existing SMEs in the region which might not excel in R&D, but still might have innovative and growth ambitions and potential. The practise of the Greater Manchester Business Growth Hub, described in the former section 3.4 is an example of a promising future direction to address this weakness in the business innovation performance of SMEs in the North West.

Upgrade manufacturing value chains and skills involving SMEs and large firms

A possible future orientation which is linked to the former one, is to increase the policy attention to initiatives that involve both SMEs and large companies in manufacturing value chains in the region. Over the past decades many manufacturing value chains have fragmented internationally, but new advanced manufacturing and smart factory trends also provide new opportunities for new forms of cooperation between firms in value chains. Promoting such linkages between small regional firms and large international firms could also serve the up-grading of skills to a more advanced level.

Increase the embeddedness of local Science-Industry clusters

Figure 9 Liverpool City Region Innovation Plan 2013 – a working example of identifying emerging directions: connected and related potential

Source: Liverpool City Region Innovation Plan 2013

Cooperation in value co-creation at regional level would also be helpful in promoting the embeddedness of local Science-Industry clusters. The graph above from the Liverpool City Region shows how it prepared for the development of its innovation Plan 2013 (see Figure 9). It is a good example approach for identifying emerging directions with connected and related potential.


The recent announcement of AstraZeneca to move its R&D activities to Cambridge does not only show the challenge in providing high quality local eco-systems for R&D and incubation of spin-off companies, but it also shows the relevance of embedding such R&D concentrations in a wider regional system of innovative activities.

Enhance coordination and cooperation between local partnerships concerning innovation support

The various local partnerships in the North West should be open to collaboration with others. For some innovation activities and innovation policy activities there are likely to be potential benefits to gain from increasing the geographical scale of partnership. For some activities collaboration with one neighbouring local partnership may be appropriate, while for other aspects collaborating at the level of the North West may be more appropriate, and for other aspects there might even be interesting opportunities for more remote partnerships, e.g. with foreign city regions.

One of the possible advantages of cooperation at regional level could concern developing more competitive proposals in applying for national funding. In this respect the 2014 report of the North West Business Leadership Team contains promising directions. First of all because after jointly studying the issues involved, the team now calls for joint collective commitments by business, academia and the LEPs so as to enable the North West to make the most of the current outstanding potential. Secondly because the team managed to identify a focussed selection of four of such fields of outstanding potential: advanced materials, energy research, cancer research and high performance computing.


Appendix A Bibliography

1. Annoni, P. and Dijkstra, L. (2013); “EU Regional Competitiveness Index – RCI 2013”, European Commission.

2. BIS, (2013): Research on Understanding Localised Policy Interventions in Business Support and Skills, December 2013, https://www.gov.uk/government/publications/understanding-localised-policy-interventions-in-business-support-and-skills

3. BIS, (2013): “No Stone Unturned: in Pursuit of Growth – Lord Heseltine Review”, independent report by Lord Heseltine, March 2013. https://www.gov.uk/government/publications/no-stone-unturned-in-pursuit-of-growth

4. The Government Office for Science, (2013): “Foresight (2013). The Future of Manufacturing: A new era of opportunity and challenge for the UK.” Project Report for the the Government Office for Science, London and BIS, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/255922/13-809-future-manufacturing-project-report.pdf

5. NWBLT (2014) ‘Exploiting the excellence’; England’s North West: where world-class science underpins wealth-creating innovation (The North West Business Leadership Team, March 2014) Available at: http://www.nwblt.com/download-archive/science-technology-and-innovation/

6. Witty Review (2013), Encouraging a British invention revolution: Sir Andrew Witty's review of universities and growth, Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/249720/bis-13-1241-encouraging-a-british-invention-revolution-andrew-witty-review-R1.pdf

7. The North West Business Leadership Team, (2014): ‘Exploiting the excellence; England’s North West: where world-class science underpins wealth-creating innovation’, March 2014, http://www.britainsenergycoast.co.uk/LiteratureRetrieve.aspx?ID=127565.

8. New Economy Manchester, (2013): ‘Advanced manufacturing and nuclear in the North West”, a report for The North West Regional Leaders Board, August 2013, http://neweconomymanchester.com/downloads/2496-NW-Advanced-Manufacturing-Report-August-2013-pdf.

Appendix B Stakeholders Consulted

1. David Bigham, BIS North West, Department for Business, Innovation & Skills (June 2014).

2. Alan Welby, Executive Director, Key Sectors. Liverpool City Region Local Enterprise Partnership (September 2014).

3. Pernille Kousgaard, Core Team, Liverpool City region Local Enterprise Partnership (September 2014).

4. Allan Sparrow, Greater Manchester Local Enterprise Partnership (September 2014)


Appendix C Statistical Data

UKD North West (UK) Country EU27 Year Source Performance relative to

Performance relative to

UKD UK EU27 EU27 UK ECONOMIC INDICATORS GDP per capita (Euros) 23800 28200 25200 2011 Eurostat 94.4 84.4 Long term unemployment rate 2.90 2.70 5.10 2013 Eurostat 175.9 93.1

Labour productivity growth (%) 1.14 1.32 2.19 2001-2011 Eurostat 51.8 86.4

RCI 2013 1.68 0.00 2013 JRC 100.0 100.0 Share of employment in agriculture 0.01 0.01 0.05 2011 Eurostat 16.4 66.8 Share of employment in industry (including construction) 0.20 0.19 0.25 2011 Eurostat 78.9 103.6 Share of employment in business 0.32 0.32 0.30 2011 Eurostat 106.3 99.1 Share of employment in public sector 0.31 0.30 0.25 2011 Eurostat 126.4 104.3 Share of employment in S&T 0.10 0.11 0.09 2011 Eurostat 111.7 91.7

Specialisation in number of local units by NACE 0.26 0.29 0.36 2012 ISI-Eurostat 74.1 91.6

Employment in 2 and 3 star clusters (strong clusters) 15.74 22.31 31.39 2010 MERIT-CO 50.2 70.6 WIDER FRAMEWORK CONDITIONS Institutions 61.00 61.00 43.55 2010 RCI 140.1 100.0 Macroeconomic stability 43.00 43.00 58.20 2010 RCI 73.9 100.0 Infrastructure 90.20 83.00 74.64 2010 RCI 120.9 108.7 Higher education/ Training and Lifelong Learning 76.40 81.13 70.07 2010 RCI 109.0 94.2 Labour market efficiency 68.20 70.87 55.03 2010 RCI 123.9 96.2 Market size 61.80 63.39 50.27 2010 RCI 122.9 97.5 Business sophistication 47.40 54.39 43.16 2010 RCI 109.8 87.1

It is important to think new ideas and being creative 0.54 0.53 0.54 2010 MERIT-ESS 101.1 101.3


UKD North West (UK) Country EU27 Year Source Performance relative to

Performance relative to

RESEARCH & TECHNOLOGY INDICATORS Employees with ISCED 5-8 (% all employees, ISCED 2011) 40.0 43.5 33.5 2013 Eurostat 119.2 91.8 Business R&D (% GDP) 1.56 1.13 1.29 2011 Eurostat 120.9 138.1 Government R&D (% GDP) 0.06 0.15 0.25 2011 Eurostat 24.0 40.0 Higher Education R&D (% GDP) 0.39 0.46 0.48 2011 Eurostat 81.3 84.8 EPO patent applications (per mln population) 53.68 85.00 110.48 2009 Eurostat 48.6 63.2 Employment in medium-high & high-tech manufacturing (% total employment) 4.50 3.80 5.60 2012 Eurostat 80.4 118.4 Employment in knowledge-intensive services (% total employment) 46.40 48.70 39.00 2012 Eurostat 119.0 95.3 Total R&D personnel (% active population) - all sectors 1.44 1.79 1.66 2011 Eurostat 86.7 80.4

Structural funds on business innovations (Euros per mln population) 46.04 77.74 2007-2013 Eurostat 100.0 100.0

Structural funds on core RTDI (Euros per mln population) 24.88 63.01 2007-2013 Eurostat 100.0 100.0

Change in Employment in medium-high & high-tech manufacturing (%-point) -0.67 -0.67 -0.38 2008-2012 Eurostat 93.3 100.1

Share of innovators receiving public financial support (SMEs, CIS 2010) 9.95 2010 MERIT-CIS 100.0 100.0

BUSINESS INNOVATION INDICATORS

Technological (product or process) innovators (% of all SMEs) 32.25 32.39 37.85 2010 MERIT-CIS 85.2 99.6

Non-technological (marketing or organisational) innovators (% of all SMEs) 35.37 35.51 39.83 2010 MERIT-CIS 88.8 99.6

Innovative SMEs collaborating with others (% of all SMEs) 4.40 4.42 8.89 2010 MERIT-CIS 49.5 99.6

SMEs innovating in-house (% of all SMEs) 8.53 9.03 22.63 2010 MERIT-CIS 37.7 94.4

Share of turnover of newly introduced innovations new to the market 1.37 1.36 4.67 2010 MERIT-CIS 29.3 100.5

Share of turnover of newly introduced innovations new to the firm 3.67 3.81 8.71 2010 MERIT-CIS 42.1 96.2

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