A New Innovation Agenda for Wales10 March 2021
This has been a busy time for UK innovation policy with the latest announcement confirming plans for the creation of the Advanced Research and Invention Agency (ARIA). The new £800 million scientific research agency draws its inspiration from the US Defense Advanced Research Projects Agency (DARPA). It is designed to be unbureaucratic, to “embrace failure” and to invest in “high-risk, high-reward” projects, operating at arms-length from government but focusing on ‘missions’ that align with UK government departments.
This is the latest element in the research and innovation (R&I) agenda which has seen some real pace and intensity being applied to the goal of achieving the 2.4% target (of UK spend) on R&I by 2027. The emergent R&D Place Strategy derived from the R&D Roadmap is another sure sign that making R&D investment work for the whole of the UK is a key ‘levelling-up’ priority with the likes of Nesta/Richard Jones providing a framework for place-sensitive deployment of funds in ways which enable the ‘crowding in’ of private and HEI investment into R&D.
This focus on higher-risk R&D and the economic and societal benefits of innovation-led growth has been reinforced through the Covid-19 pandemic – from mapping the genomic sequences of Covid-19, to SME diversification to PPE provision and, not least, three vaccines developed in quick order. While Wales and its Higher Education Institutions have played a part in the response to Covid, the real innovation policy discussion is taking place in Whitehall and Westminster. What might these developments imply for Wales and how can we respond to the opportunities that might present themselves as part of this place-based, levelling up approach to R&I?
We strongly support the view articulated in the NCUB Task Force Report Research to Recovery (2020) that, ‘Delivering the Roadmap’s vision will require a collective response from universities and businesses as critical drivers of research and innovation. A research-intensive, innovation-led economy will be characterised by flows of ideas and collaboration between industry and academia’.
This should not mean a business-as-usual approach. In our view existing approaches are inadequate and in important respects Wales’ key institutions are not fit for the purpose of delivering to this new agenda. But there are important developments underway and our intention in this short piece is to flag both areas and activities of promise and to suggest possible ways in which the future might be more progressively shaped in order that Wales is better placed to capitalise on opportunities that may emerge.
We need to begin by putting our own house in order. Our focus is therefore on institutional change that will produce cultural change in the ways in which universities and the public sector engage in innovation activity. We focus on two such institutional developments: (a) the creation of a national Innovation Council Body and (b) the creation of the Bevan School of Government, supplemented by two system-wide initiatives that have the potential to benefit the whole of Wales – Innovation Collaboration Zones and Wales Challenges.
1. National Innovation Body. It was notable that the Science & Technology Committee Report which considered the approach that should be taken to establishing what is now called ARIA concluded by saying that there should be a role for ‘a body that sits outside and operates in a different way to the established UK research funding mechanisms, with a different culture and which is able to operate free of some of the structures that are necessary for the dominant research funding institution’. Our thinking is similar in advocating the creation of a new National Innovation Body for Wales. This would work closely with Welsh Government, but act independently to mobilise activity across Wales in order that the nation can successfully secure funding opportunities in R&I, particularly innovation funding. To do so, it would be more than a host of ‘useful conversations’. It would have the power and resources to convene or even lead on the development of all-Wales bids for funding, bringing in academic expertise from universities as needed (perhaps on secondment). It should also have the resources necessary to engage contributors from the private, public and third sectors. These resources would be used to build the capability and capacity to lead on bid writing and the relationships and social capital necessary to involve the private sector in developing these bids as true partners.
In addition, it would build upon previous work developed on a National Innovation Body for Wales in recognising the significant policy shift towards a more place-based approach. The NIB would provide policy-makers and economic actors with a resource to help them develop policies and initiatives that catalyse innovation and entrepreneurship. This would have a more applied and translational impact focusing on the interface of the research base with high-tech/high-growth companies that help form distinctive Welsh clusters (Insuretech, Compound Semiconductors, Medical Devices, Creative, Cyber, Net Zero, etc) that can foster and embed innovation eco-systems. In turn this will help cultivate the jobs of tomorrow and bring about capacity to solve complex problems that see government open to new ideas that challenge the status quo and help stimulate innovation locally, in order to compete globally.
2. The Bevan School of Government. This is an idea that has already been discussed but not progressed to any meaningful end. Our vision of an independent NIB does not preclude the need for a transformation in the capacity of civil servants in Welsh Government to contribute to new success in the innovation space. The Bevan School would develop a new generation of civil servants for Wales, and work with the existing cadre through exec-ed style capability development. The School would need to have one or more physical homes and straddle the four development regions of Wales, but many of the tutors would be part-time contributors drawn from universities, the professions, business and the civil service who would constitute a ‘virtual fellowship’. Along with capacity development, the fellowship would act as a consulting arm to address specific funded projects, extending the contribution currently made by the Wales Centre for Public Policy and others.
The focus on high-level exec-ed style development could see (a) a dedicated real-time learning network established focused on real-world industrial and societal problems; (b) an ‘adapt and adopt’ programme to spread and scale good practice, knowledge transfer and working together to adopt new opportunities; (c) leadership summits to expose participants to world-leading thinking, disseminate knowledge and co-develop ideas to raise productivity in the public sector; and (d) development of a dedicated data and research unit to provide evidence and insights and building a national database of good practice, partnerships and intelligence to grow the capacity for challenge-led and mission-driven thinking.
3. Innovation Collaboration Zones. One of the recommendations of the NCUB Report is the creation of ICZs: ‘The purpose of the Innovation Collaboration Zones would be to leverage all R&D and innovation drivers, from fiscal and tax levers and incentives and deregulation of land use, through to co-location of expertise and research facilities, to deliver the commercial missions from research through to development and innovation’. How best to utilize this approach to the benefit of Wales needs further consideration in light of other policy priorities, but this would be a way of addressing the ERC ‘Arc of Innovation’ research which not only points to the endemically low levels of public investment in R&D in Wales, but the need for a different range and mix of policy tools to influence distribution. Introducing ICZs across Wales could make a major contribution to the circulation of innovation in Wales with stronger local company growth prospects being critical to wider impact in the local community. The principles of these zones would include that they are focused on ‘problem sets’ rather than particular technologies or industry sectors; they are place-specific and embrace a full range of research, innovation and education and training activity; they deliver all of the strands needed to nurture ‘practical innovation’ to address specific commercial issues and/or societal challenges.
The potential for ICZs to further link to the idea of a national Positive Innovation Endowment (PIE) that is distinctive in its approach to impact and responsible investing. This will build on the growing ESG ‘mood’ and ensure Wales not only grows a bigger pie/PIE but a better one. As well as investing in solutions to the local and global challenges upon us, the PIE could invest in new renewable energy infrastructure projects, local affordable housing or retro-fitting public buildings here in Wales. Not only would this be a symbolic step it would genuinely set the course for sustainable investment practices in line with the goals of our Well-being of Future Generations Act, particularly those that backed Wales’ inherent assets and opportunities, grounding spin-off benefits and embedding an impact investment mindset in the country’s wider institutions and functions.
4. Wales Challenges – making Wales the ‘go to’ place for mission-driven thinking. The public sector has a unique role to play in driving innovation. Conventional thinking often sees the sector as a ‘laggard’; with the ‘inflated’ and ‘slow’ Welsh public sector seen as crowding out the private sector. It is time to invert this perspective by turning the challenge of a large public sector into an opportunity – and building upon the evidence of positive action throughout the Covid-crisis. The public sector is not just there to ‘fund’, ‘de-risk’ or trouble-shoot. It is there to convene purposeful conversations and collective action around the big challenges of the day and to make co-investments that align with different risk-reward profiles and play an active role in how we shape the future.
Wales has the highest adoption rates of SBRI in the whole of the UK and has an opportunity to not just influence the rate, but the direction, pace and inclusive nature of innovation. Challenge-driven approaches can help make the distribution of R&I more sustainable and equitable, on account of the shape and structure given to investments and interventions. Wales is building up good capacity, expertise and capability in this area and this has important future implications as we simultaneously grapple with three crises with inter-linked characteristics – Covid, Climate and Low Productivity. Challenge-oriented policy is key to applying industrial strategy in an equitable and sustainable way and building upon InFuSe, CCR Challenge Fund, SBRI and successful Govtech programmes – could see Wales lead the way in tackling societal problems such as decarbonisation, diabetes and dementia.
These are exciting times for everyone who believes in the potential of innovation-led activity that addresses the pressing societal challenges of our time to produce solutions that generate both economic and public value. The UK innovation policy landscape is changing faster than ever and there is the promise of some serious resource if we have the collective capacity to address the opportunities in a timely and effective manner. Our fear is that Wales will continue to lag when it comes to securing these resources. In our view, radical institutional transformations that herald both structural and cultural change will be required if we are to raise our game in the innovation stakes.
Professor Rick Delbridge and Professor Kevin Morgan