Policy Mix
Governments have a significant role to play in helping businesses reimagine themselves.
The need for a holistic, place-based approach to solving societal challenges has been brought into sharp relief by the pandemic which has prompted fresh discussions about the need to build a more equitable, fair, and sustainable society.
It has also forced the revaluing of public services and public health, made visible the underpaid and insufficiently appreciated work that is performed to carry out frontline services, and led to widespread calls for a more active role for the public sector in building greater resilience to future shocks. In short, the pandemic is an opportunity to change the priorities of public investment to support a recovery that is more equitable, responsible, and green.
What is the role of innovation in solving societal challenges?
An important dimension to this public investment is innovation, but it is not just about having more innovation. We want and need better innovation, but what exactly does that look like and what innovation goals should we be pursuing?
Today we still tend to think of innovation in quite a narrow way, focusing mainly on radical and high-tech solutions and industries, but also on a narrow repertoire of public policy efforts to promote the supply side of scientific knowledge creation.
I think this is insufficient in terms of solving these pressing challenges. For example, public policy can play a huge role in supporting innovation through wielding its market power in areas such as public procurement. And this requires joined-up thinking in terms of who decides what goals and values are pursued, and what tools and instruments are used. Also key in this whole debate is how these policies are then specifically translated to the local and regional level, and how this range of tools are used to specifically empower places and businesses.
We want and need better innovation, but what exactly does that look like and what innovation goals should we be pursuing?
Is this linked to the levelling up agenda?
These questions around innovation strike to the heart of the levelling up debate, and the role innovation can play in improving living standards and economic growth.
In the recent Levelling Up white paper the UK government set out a dozen missions to be achieved by 2030 in areas such as education, skills, health and wellbeing. It stressed that achieving these missions would require a new model of economic growth, public and private investment, a business-friendly environment, and incentives for inward investment.
The paper also said the government would target £100m of investment in three new innovation accelerators, one of which will be centred on Greater Manchester. These private-public academic partnerships will aim to replicate the Stanford-Silicon Valley and MIT-Greater Boston models of clustering research excellence and its direct adoption by allied industries.
Leading and Implementing Innovation
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Can the UK learn from elsewhere in terms of its approach?
The UK should also look at what has happened in industrial regions of countries such as Germany or Spain. For instance, I have worked with academics from the Basque Country in Spain to understand how this old industrial region has been resilient to various crises since 1980 and the role that regional industrial structures, policy choices and institutional leadership have played.
Lessons can also be learnt from unusual places too. In a recent paper with my colleague Kieron Flanagan we documented how the Galician government in Spain acted as the lead user for technological solutions to public problems affecting not only Galicia but other locations. Our conclusion was that the state can play a much broader and more proactive role in industrial diversification than is typically considered.
What role can universities play?
Universities can play a key role in levelling up and these are questions that myself and colleagues are looking at as we speak. For instance, I am currently co-editing a special issue on how the knowledge exchange efforts of universities can be better understood and measured, while in another paper myself and colleagues investigated the contribution of universities to regional economies.
In particular we examined the extent to which university subject mix influences graduate retention rates across urban and non-urban areas, and found that subject specialisation does matter across diverse geographical contexts.
This is just one piece of research into one specific issue, but it does reaffirm the crucial role that local decision-making (whether by the public or private sector) has on specific regions. Because ultimately it is at the local level where the tensions around innovation strategy are played out.
