Regional Development Conference stersund 2011

1. Regional Development Conference�stersund 2011 Knowledge Transfer in Northwest England RDC �stersund 2011

2. NW OF ENGLAND RDC �stersund 2011 �140 Bn Economy (2007 data) �35Bn is science dependent (2) UK�s largest University (3) Largest Regional Airport (4) Most diverse English Region Most densely populated region outside of London (480 per km2) Cumbria has third lowest population in England � more sheep than people Higher Education Institutions Combined turnover of �1.2bn Attracting > �125m research funding Highest graduate level skills outside London / SE �140 Bn Economy (2007 data) �35Bn is science dependent (2) UK�s largest University (3) Largest Regional Airport (4) Most diverse English Region Most densely populated region outside of London (480 per km2) Cumbria has third lowest population in England � more sheep than people Higher Education Institutions Combined turnover of �1.2bn Attracting > �125m research funding Highest graduate level skills outside London / SE

3. RDC �stersund 2011 The Northwest has 14% of England�s population. Area 14,000 Km2 Population of 6.8 million 2.5 million in Gtr manch & conurbation Over 230,000 businesses. �2.9Bn spend on R&D - Overall Northwest investment in R&D is 2.1% of GDP, 0.2% above the UK figure, but short of the target of 2.5%. Private Sector (14% of England total R&D) [�1.89Bn] University Sector (11% of England total) [�0.52Bn] Government spending (5% of England total) [�0.09Bn] A range of internationally competitive sectors Above average levels of business R&D The Northwest has 14% of England�s population. Area 14,000 Km2 Population of 6.8 million 2.5 million in Gtr manch & conurbation Over 230,000 businesses. �2.9Bn spend on R&D - Overall Northwest investment in R&D is 2.1% of GDP, 0.2% above the UK figure, but short of the target of 2.5%. Private Sector (14% of England total R&D) [�1.89Bn] University Sector (11% of England total) [�0.52Bn] Government spending (5% of England total) [�0.09Bn] A range of internationally competitive sectors Above average levels of business R&D

4. RDC �stersund 2011 GVA per person employed 10% below the UK average 90,000 fewer people working in the �knowledge economy� 37,000 fewer companies Resulting in An output gap of �23 Bn with the UK average. �16 Bn is due to lower productivity (GVA per employee). 40% of GVA gap is attributed to the business services sector. GVA per person employed is higher than the UK average in our manufacturing sector. Industrial mix is a factor. GVA per person employed 10% below the UK average 90,000 fewer people working in the �knowledge economy� 37,000 fewer companies Resulting in An output gap of �23 Bn with the UK average. �16 Bn is due to lower productivity (GVA per employee). 40% of GVA gap is attributed to the business services sector. GVA per person employed is higher than the UK average in our manufacturing sector. Industrial mix is a factor.

5. Economic Development Structure RDC �stersund 2011 Deficit reduction has been the primary focus of the coalition Govt in the UK DCLG � 42% reductions in budget BIS - 20% cut, Science protected (�4.6Bn pa) 28 Local Enterprise Partnerships approved Innovation to be led at national level (TSB) Regional Growth Fund - �1.4Bn over 3 years ERDF transfer to central control (DCLG) Regional development agencies abolished � All of this together is more central control and the effective removal of Regional Tier. Emphasis from Govt on deficit reduction/ minimal Govt intervention/ business led recovery/ growth & private sector job creation. RGF total of �1.4Bn over 3 years. Only a qtr of that invested by RDAs on a per annum basis. Two objectives: to stimulate enterprise; and support areas dependent on public sector. RGF round 1 � set at �250-300m � around 450 bids received, value in excess of �2Bn. R2 to close in July 2011. Seems to be focused on large company capital bids � (GBI/ RSA �) Business Link cut back to national call centre. Business support devolved to LAs and LEPs to coordinate/ fund as necessary. Deficit reduction has been the primary focus of the coalition Govt in the UK DCLG � 42% reductions in budget BIS - 20% cut, Science protected (�4.6Bn pa) 28 Local Enterprise Partnerships approved Innovation to be led at national level (TSB) Regional Growth Fund - �1.4Bn over 3 years ERDF transfer to central control (DCLG) Regional development agencies abolished � All of this together is more central control and the effective removal of Regional Tier. Emphasis from Govt on deficit reduction/ minimal Govt intervention/ business led recovery/ growth & private sector job creation. RGF total of �1.4Bn over 3 years. Only a qtr of that invested by RDAs on a per annum basis. Two objectives: to stimulate enterprise; and support areas dependent on public sector. RGF round 1 � set at �250-300m � around 450 bids received, value in excess of �2Bn. R2 to close in July 2011. Seems to be focused on large company capital bids � (GBI/ RSA �) Business Link cut back to national call centre. Business support devolved to LAs and LEPs to coordinate/ fund as necessary.

6. UK Climate Change Policy 50% reduction carbon emissions by 2025 �Green economy� - �230Bn of investment into UK's energy sector Green Investment Bank in pipeline Technology Innovation Centres Nuclear energy RDC �stersund 2011 2020 EU targets for UK � 15% energy generation from renewables and 34% reduction in carbon emissions � OK for second but first looking difficult. Carbon Trust estimate that, by 2050, UK could capture 12% of the global market in renewable generation � a �230Bn investment UK innovation investment fund - �360m [�165 Govt; �195 private] � to invest in innovative business, one of largest tech funds in europe. Almost 10% targeted for �clean tech� Plans to launch Green Investment Bank � mission to accelerate private investment in the green economy (offshore wind, non domestic energy, waste) Govt committed �3.3Bn by 2015 Technology innovation centres � the UK �Fraunhofer� model � �220m investment by govt (matched by same from industry and same from research bodies) - latest centre to be awarded is for offshore renewable energy. In order to achieve the renewable energy and carbon emission reductions whilst containing the costs means that the UK Govt has supported Nuclear energy - This would mean almost 40% energy generation from Nuclear and 40% from other renewable sources � not all parties agree. 2020 EU targets for UK � 15% energy generation from renewables and 34% reduction in carbon emissions � OK for second but first looking difficult. Carbon Trust estimate that, by 2050, UK could capture 12% of the global market in renewable generation � a �230Bn investment UK innovation investment fund - �360m [�165 Govt; �195 private] � to invest in innovative business, one of largest tech funds in europe. Almost 10% targeted for �clean tech� Plans to launch Green Investment Bank � mission to accelerate private investment in the green economy (offshore wind, non domestic energy, waste) Govt committed �3.3Bn by 2015 Technology innovation centres � the UK �Fraunhofer� model � �220m investment by govt (matched by same from industry and same from research bodies) - latest centre to be awarded is for offshore renewable energy. In order to achieve the renewable energy and carbon emission reductions whilst containing the costs means that the UK Govt has supported Nuclear energy - This would mean almost 40% energy generation from Nuclear and 40% from other renewable sources � not all parties agree.

7. On Target � ?? RDC �stersund 2011 2010, the UK slumped from being third in the world in terms of investment in green growth, to only 13th place, , according to a report by the respected US Pew Environment Group. This means the UK now ranks well behind developing countries such as Brazil, in sixth place, India in 10th place and China in first place. Investment in alternative energy and clean technology reached $11bn (�7bn) in the UK in 2009, but plummeted to only $3.3bn (�2bn) last year - a decline of 70%. This compares with $2.3bn (�1.45bn) investment in Mexico last year, $4bn (�2.5bn) in France and $14bn (�8.7bn) in Italy. Top of the league is China, with $54bn (�34bn), Germany with $41.2bn (�25.7bn) and the US, with $34bn (�21bn) of investment last year. The Pew report blamed the UK's fall down the ranking on "a sharp decline in offshore wind energy investments and uncertainty surrounding [government] policy". Phyllis Cuttino, director of Pew's clean energy programme, said: "National policy matters - investment follows policy. We've seen that again and again." Overall, global clean technology investment reached a record $243bn (�152bn) last year. Cuttino said it was a landmark, as this was the first year in which investment in renewable energy overtook nuclear power. "Allowing the use of trading mechanisms such as offsetting essentially means outsourcing our emission reduction responsibilities to other countries - thereby weakening the drive to achieve more green technologies and industries, with all the jobs those can bring, here in the UK." Not all parties agree with the UK government figures � division over Nuclear (Fukushima has not helped although EDF say they have resolved those issues �) Not enough space to build the required number of turbines on land. Still challenges over the offshore development 2010, the UK slumped from being third in the world in terms of investment in green growth, to only 13th place, , according to a report by the respected US Pew Environment Group. This means the UK now ranks well behind developing countries such as Brazil, in sixth place, India in 10th place and China in first place. Investment in alternative energy and clean technology reached $11bn (�7bn) in the UK in 2009, but plummeted to only $3.3bn (�2bn) last year - a decline of 70%. This compares with $2.3bn (�1.45bn) investment in Mexico last year, $4bn (�2.5bn) in France and $14bn (�8.7bn) in Italy. Top of the league is China, with $54bn (�34bn), Germany with $41.2bn (�25.7bn) and the US, with $34bn (�21bn) of investment last year. The Pew report blamed the UK's fall down the ranking on "a sharp decline in offshore wind energy investments and uncertainty surrounding [government] policy". Phyllis Cuttino, director of Pew's clean energy programme, said: "National policy matters - investment follows policy. We've seen that again and again." Overall, global clean technology investment reached a record $243bn (�152bn) last year. Cuttino said it was a landmark, as this was the first year in which investment in renewable energy overtook nuclear power. "Allowing the use of trading mechanisms such as offsetting essentially means outsourcing our emission reduction responsibilities to other countries - thereby weakening the drive to achieve more green technologies and industries, with all the jobs those can bring, here in the UK." Not all parties agree with the UK government figures � division over Nuclear (Fukushima has not helped although EDF say they have resolved those issues �) Not enough space to build the required number of turbines on land. Still challenges over the offshore development

8. Innovation Needed Invention but not innovation Commercialisation Growth Jobs Failure to exploit Access to finance Regulation / Government Policy Route to market RDC �stersund 2011 Innovation is essential to resolve these dilemmas The UK has world class research which often fails to develop into world class products/ processes and businesses - invention but not innovation. With this lack of commercialisation the UK is struggling to achieve the growth in the economy and therefore the growth in jobs. The �knowledge economy� in the UK is struggling to develop and hence graduate unemployment at a 10 year high (1 in 5 Uni leavers in 2010 failed to find a job). UK does not create enough Gorillas from the success in science/ innovation and technology � those companies who become global giants � Only 35% of businesses with t/o below �100K export, this grows to 60%+ as t/o exceeds �1m. The Northwest has the lowest percentage of SMEs �born global� (export some product from day 1) in the whole of UK. There seems to have been a �connection failure� and lots of invention does not get enough support Lots of reasons cited (primarily for small business) � finance, Govt policy, failing to identify the route to market � skills??Innovation is essential to resolve these dilemmas The UK has world class research which often fails to develop into world class products/ processes and businesses - invention but not innovation. With this lack of commercialisation the UK is struggling to achieve the growth in the economy and therefore the growth in jobs. The �knowledge economy� in the UK is struggling to develop and hence graduate unemployment at a 10 year high (1 in 5 Uni leavers in 2010 failed to find a job). UK does not create enough Gorillas from the success in science/ innovation and technology � those companies who become global giants � Only 35% of businesses with t/o below �100K export, this grows to 60%+ as t/o exceeds �1m. The Northwest has the lowest percentage of SMEs �born global� (export some product from day 1) in the whole of UK. There seems to have been a �connection failure� and lots of invention does not get enough support Lots of reasons cited (primarily for small business) � finance, Govt policy, failing to identify the route to market � skills??

9. New language � New interventionism Market Pull Stimulate demand Global markets Growing the economy RDC �stersund 2011 The challenge for innovation has not changed but with the changed government in the UK there is a �new language� � Rather than �what can the state do to assist business� it is more �what can business do to assist itself� More about �market pull� rather than �market failure� Policies aimed at a �hands off� approach but intended to stimulate demand These phrases are used to frame the shift in perspective that is traditional between conservative-labour thinking. There are differences this time and we have yet to see how these will translate into detailed activity and spend � It is apparent we have economists in senior posts within the UK Govt � all vying for attention! The challenge for innovation has not changed but with the changed government in the UK there is a �new language� � Rather than �what can the state do to assist business� it is more �what can business do to assist itself� More about �market pull� rather than �market failure� Policies aimed at a �hands off� approach but intended to stimulate demand These phrases are used to frame the shift in perspective that is traditional between conservative-labour thinking. There are differences this time and we have yet to see how these will translate into detailed activity and spend � It is apparent we have economists in senior posts within the UK Govt � all vying for attention!

10. Same debates � Business growth Job creation Picking winners Commercialisation Innovation RDC �stersund 2011 Public Sector interventions � Public procurement Re-inforce lead markets � energy, low carbon etc. Regulation Public Sector interventions � Public procurement Re-inforce lead markets � energy, low carbon etc. Regulation

11. Ingredients for innovation � RDC �stersund 2011 These are all elements which have been discussed today � The proportions of each these in the mix is important and will be different depending on your sector/ product/ business model � The challenge is determining those proportions � This is a diagram I first put together a couple of years ago � it is still valid in this �new landscape�. To address the challenges / seize opportunities Build on core strengths in industries with most potential Take advantage of ideas / invention Collaborate to exploit markets Access to knowledge / new ideas from anywhere Diffusion and exploitation Increasingly a collaborative activity Strengths of bonds within networks / partnerships may well determine overall economic performance But all to no avail if people are not aware of benefits and how to gain them Doing things differently is hard work / uncomfortable, so motivation is crucial too. And you must measure innovation not just to know if you are making progress, but also we know the measures you adopt will to some extent determine how people behave. These are all elements which have been discussed today � The proportions of each these in the mix is important and will be different depending on your sector/ product/ business model � The challenge is determining those proportions � This is a diagram I first put together a couple of years ago � it is still valid in this �new landscape�. To address the challenges / seize opportunities Build on core strengths in industries with most potential Take advantage of ideas / invention Collaborate to exploit markets Access to knowledge / new ideas from anywhere Diffusion and exploitation Increasingly a collaborative activity Strengths of bonds within networks / partnerships may well determine overall economic performance But all to no avail if people are not aware of benefits and how to gain them Doing things differently is hard work / uncomfortable, so motivation is crucial too. And you must measure innovation not just to know if you are making progress, but also we know the measures you adopt will to some extent determine how people behave.

12. Knowledge Exchange RDC �stersund 2011 We have plenty of expertise/ research � along with technology demonstrators and pilot schemes � Technology Strategy Board is the UK national lead for innovation and is responsible for the funding and coordination of the Technology Innovation Centres N8 is the group of the 8 most research intensive universities in the North of England The Lancaster Environment Centre and the NAREC are two of many �centres of excellence� these two dedicated to the environment and renewable energy. (National Advanced Renewable Energy Centre) We have plenty of expertise/ research � along with technology demonstrators and pilot schemes � Technology Strategy Board is the UK national lead for innovation and is responsible for the funding and coordination of the Technology Innovation Centres N8 is the group of the 8 most research intensive universities in the North of England The Lancaster Environment Centre and the NAREC are two of many �centres of excellence� these two dedicated to the environment and renewable energy. (National Advanced Renewable Energy Centre)

13. How to engage small business � Lack awareness � Role of intermediaries � Role of Universities � Role of Science Parks � Skills - Technical v Commercial � RDC �stersund 2011 It is universally recognised that it is difficult to fully engage with SMEs � The broader networks/ Knowledge of SMEs are not always strong � - University engagement is low priority for SMEs seeking help. - However, when they do connect to University they rate the engagement of high quality The role of �knowledge broker� is essential in many areas � The university as a knowledge provider needs to extend to become true �exchange� � The denisty and proximity of businesses and knwoledge within a science park should be exploited more fully � network of networks The SME business is often based on a technical expertise � needs to be expanded to include commercial skilla It is universally recognised that it is difficult to fully engage with SMEs � The broader networks/ Knowledge of SMEs are not always strong � - University engagement is low priority for SMEs seeking help. - However, when they do connect to University they rate the engagement of high quality The role of �knowledge broker� is essential in many areas � The university as a knowledge provider needs to extend to become true �exchange� � The denisty and proximity of businesses and knwoledge within a science park should be exploited more fully � network of networks The SME business is often based on a technical expertise � needs to be expanded to include commercial skilla

14. Business of Business Business Schools High growth support RDC �stersund 2011 IDEAS at Daresbury is an exciting new� partnership between the three leading Business/Management Schools of the North West � from the universities of Manchester, Liverpool and� Lancaster along with ImaginationLancaster, Lancaster University�s creative design research lab. This �770,000 initiative is further supported by the Science &Technology Facilities Council (STFC) and Daresbury Science & Innovation Campus (Daresbury SIC). ?The mission of IDEAS at Daresbury is to promote effective knowledge exchange at the interface of SMEs, large corporations, universities and strategic government funded science and will drive innovation into primarily high-tech micro businesses located within the Daresbury SIC network and related regional facilities.IDEAS at Daresbury is an exciting new� partnership between the three leading Business/Management Schools of the North West � from the universities of Manchester, Liverpool and� Lancaster along with ImaginationLancaster, Lancaster University�s creative design research lab. This �770,000 initiative is further supported by the Science &Technology Facilities Council (STFC) and Daresbury Science & Innovation Campus (Daresbury SIC). ?The mission of IDEAS at Daresbury is to promote effective knowledge exchange at the interface of SMEs, large corporations, universities and strategic government funded science and will drive innovation into primarily high-tech micro businesses located within the Daresbury SIC network and related regional facilities.

15. Pilot programme launched in 2008 Engaged 3 Business Schools interactively with SMEs Collaborative approach �Ideas into practice� RDC �stersund 2011 IDEAS was formally launched on the 9 October 2008 by Iain Gray, Executive Director of the Technology Strategy Board (TSB). The Partnership was formalised in December 2008 by representatives from the three universities namely. � In the initial development of IDEAS, there were high levels of collaboration IDEAS has the following overarching aims: to develop and put 'new ideas into practice' through research and knowledge transfer activity centred on innovation, competitive performance and economic development. to help establish and enhance the performance of firms and organisations at Daresbury SIC and those in the wider North West and UK business community. The programme comprises of three interactive workshop programmes plus additional bespoke support for high-tech SME�s; Customer Focused Value & Innovation May - June �09 Competitive Advantage through People and Processes Oct - Nov �09 Beyond Networking, Creativity Collaboration and Growth Jan � Feb �10 Each workshop programme consists of 4-6 sessions, cohorts of 15 -20 companies. IDEAS was formally launched on the 9 October 2008 by Iain Gray, Executive Director of the Technology Strategy Board (TSB). The Partnership was formalised in December 2008 by representatives from the three universities namely. � In the initial development of IDEAS, there were high levels of collaboration IDEAS has the following overarching aims: to develop and put 'new ideas into practice' through research and knowledge transfer activity centred on innovation, competitive performance and economic development. to help establish and enhance the performance of firms and organisations at Daresbury SIC and those in the wider North West and UK business community. The programme comprises of three interactive workshop programmes plus additional bespoke support for high-tech SME�s; Customer Focused Value & Innovation May - June �09 Competitive Advantage through People and Processes Oct - Nov �09 Beyond Networking, Creativity Collaboration and Growth Jan � Feb �10 Each workshop programme consists of 4-6 sessions, cohorts of 15 -20 companies.

16. Beyond Networking � Knowledge Exchange RDC �stersund 2011 Sharing experiences at the business to business; business to academia and learning within academia too! Sharing experiences IDEAS will operate between industry, Higher Education Institutions (HEIs), other public/private sector agencies (including Research Councils, Regional Development Agencies, innovation intermediaries) and within and between firms. Providing advice/support to firm-wide strategies to foster more effective generation, development and implementation of innovation IDEAS will ... develop genuinely new models to increase competiveness and economic growth. test/develop new approaches to knowledge exchange & management of innovation. support emergence of the �skilled innovator� in commercial & academic environments. Sharing experiences at the business to business; business to academia and learning within academia too! Sharing experiences IDEAS will operate between industry, Higher Education Institutions (HEIs), other public/private sector agencies (including Research Councils, Regional Development Agencies, innovation intermediaries) and within and between firms. Providing advice/support to firm-wide strategies to foster more effective generation, development and implementation of innovation IDEAS will ... develop genuinely new models to increase competiveness and economic growth. test/develop new approaches to knowledge exchange & management of innovation. support emergence of the �skilled innovator� in commercial & academic environments.

17. Network Analysis � RDC �stersund 2011 A network analysis model for SMEs which looks at their connections in a different way. * How to extract value from the SME network. * How to strengthen. Commenced with conventional network diagram � looking at proximity, connectedness, and the strength of the ties within the network. Examine the �Geographic distance and Level of interactions with contacts� Examine also the �Connectivity of contacts and Level of interactions with contacts� Identify the �CORE CONTACTS� - Local, mixed of strong ties, from mixed areas of business and loose. Firms use different contacts to solve problems. However, the presence of core contacts (local and strong ties) is still important. More than one core contact always appears in the process of problem solving. A network analysis model for SMEs which looks at their connections in a different way. * How to extract value from the SME network. * How to strengthen. Commenced with conventional network diagram � looking at proximity, connectedness, and the strength of the ties within the network. Examine the �Geographic distance and Level of interactions with contacts� Examine also the �Connectivity of contacts and Level of interactions with contacts� Identify the �CORE CONTACTS� - Local, mixed of strong ties, from mixed areas of business and loose. Firms use different contacts to solve problems. However, the presence of core contacts (local and strong ties) is still important. More than one core contact always appears in the process of problem solving.

18. Solutions from Business? RDC �stersund 2011 The targets are no doubt ambitious, the knowledge is available, However the collaborations required and the knowledge exchange processes are costly, Public perception is still uncertain (Italy rejected Nuclear energy) Small businesses are unlikely to invest until clear policy steers are provided by Government �The targets are no doubt ambitious, the knowledge is available, However the collaborations required and the knowledge exchange processes are costly, Public perception is still uncertain (Italy rejected Nuclear energy) Small businesses are unlikely to invest until clear policy steers are provided by Government �

19. RDC �stersund 2011