I’m just back from a couple of days at Labour conference where industrial strategy has been playing a starring role in the fringe line up, including a roundtable we hosted with the other National Academies – the Academy of Medical Sciences, British Academy and the Royal Academy of Engineering.
Labour published their industrial strategy earlier this year. It is focused around two missions, heavily influenced by Marianna Mazacuto’s thinking, the first that 60% of the UK’s energy will come from low carbon or renewable sources by 2030 and the second to create an innovation nation with the greatest proportion of high-skilled jobs in the OECD and 3% of our GDP on Research and Development by 2030.
The Society has been calling for the government to signal the UK’s ambition to compete internationally by setting a target of 3% of GDP for combined public and private R&D spending and there is now a consensus across the major political parties to increase investment in R&D with the Lib Dems committed to double investment in R&D and the Conservative government committing at the election to deliver 2.4% of R&D within ten years, with a longer term goal of 3%.
Two strong themes came up in discussion over how to achieve this shared goal:
There was a consensus that people are central to achieving increased investment in R&D, and in several different ways:
The people to do it – Labour’s industrial strategy recognizes the importance of boosting highly skilled jobs and increasing the opportunities for people to get the skills to fill them. They propose a National Education Service. In addition to giving every UK citizen the opportunity to join this workforce, there was also discussion about the value of attracting skilled people from around the world, and supporting mobility between institutions and sectors.
Engaging everybody in doing and supporting scientific research and innovation – There was also a strong recognition of the importance of breaking down barriers between the ‘boffins’ and everybody else, recognizing that we are all at heart scientists as we interact with the world day to day, and that scientific research and innovation can benefit us all. This was drawn out in a number of ways, firstly the role of universities as civic institutions that should engage with their local community and the role of researchers in engaging with the users of their research – Arthritis Research UK gave a great example of their Patient Insight Partners who work alongside researchers and health care professionals to inform their work.
And secondly the need to recognise research and innovation that is happening outside what we might traditionally think of as ‘science’ settings – encompassing innovation in the service sector including hospitality and care (this draws heavily on some Nesta proposals from 2016). The Labour industrial strategy includes proposals for a new retail catapult.
Making it ‘good business’ to invest in R&D
Part of boosting investment in R&D will be encouraging research intensive, innovative businesses to start up and scale in the UK.
A number of SMEs and entrepreneurs highlighted the diversity of funding streams that they have accessed – including both UK and EU funds – but also the challenges of doing so. Grant funding can be time consuming to apply for and patient venture capital hard to access. A Board looking for returns on investment needs persuading that it is worth expending time and energy to do more ‘risky’ R&D which means that financial instruments and infrastructure that create a rationale for a growing business to invest in R&D can often be more helpful than direct money. The government is currently consulting on how to better finance growth in innovative firms – so called ‘patient capital’. (the Society has responded to highlight the issues for investment in science and technology based companies, in particular those spun out from UK universities and how access to patient capital can affect their growth and ability to innovate). Approaching the challenge through a different lens, the Labour party has just published a report into Alternative Models of Ownership which looks at how different business structures could incentivise longer-term investments.