Economic growth is the number one mission of this government and its has been clear that investment in research and innovation is a key factor in driving growth. The majority of the UK’s publicly-funded research is carried out in universities, who now spend over £15bn annually delivering research.
Universities are the UK’s single best collective asset for economic and social prosperity: advancing social mobility, anchoring companies and partners to a place, and diffusing innovation into the economy. They are landlords, employers, enterprise incubators, cultural institutions, and guardians of huge amounts of public money. Their tangible assets include real-estate (often in the most expensive parts of town), research equipment and laboratories, vehicles, plants, and other machinery, and the people that stick this whole ecosystem together. Their intangible assets include IP, licenses, ideas, companies, and the social permission to carry out private sector orientated activities like form companies.
This is a success story. Yet, the UK’s economy is broken. Plagued by low productivity. Stymied by regional inequalities. Rendered less than the sum of its parts by disjointed policy, political change and low investment in critical infrastructure. And universities now face acute financial pressures. This suggests despite a wealth of assets, we are not fully leveraging their potential to drive prosperity. What can be done to ensure that policy frameworks harness the breadth of our university research and innovation to fulfil its potential?
Where have we come from?
It has been an unprecedented era of growth for universities by any reasonable measure. The total income of universities has grown by close to £18bn from 2015–16 to 2023–24, total IP income has grown by £60m in the same period, and the sector as of 2023–24 is in possession of 12,887 hectares of land (by HESA’s best estimates), compared to 6,908 hectares in 2015–16 (the data is less than complete but you see the point.) The present financial consolidation feels so painful partially because expansion of university assets has been so significant.
The key decision for universities in meeting their strategic objectives has not been about the more judicious use of resources but about deciding which assets to expand. An era of low-inflation combined with rising international demand has allowed universities to acquire even more assets. New facilities. New buildings at home and abroad. More research and the spin-outs that come with it. Increased student numbers.
But the times they are a-changin’. The period of expansion is at an end. UKRI is introducing a new, more purposeful strategy to focus its investment in R&D. We are entering a new era.
This is surely the time for a country which is globally leading in research to bring together its collective knowledge to strengthen the economy and ensure it delivers better outcomes for people across the UK.
Where should we be going?
In conjunction with University College London, Policy.Partners, a new collaboration between Counterculture and Wonkhe, is launching the commission on research for better economic growth.
Currently, policy instruments to drive research across the UK are too blunt, with funding mechanisms focused on inputs and mode of delivery, rather than outputs and outcomes tied to purpose. National research policy ignores regional distinctions and place-based assets. We are stuck in a zero-sum debate about whether to invest in the Golden Triangle, or distribute more funding across the rest of the UK. Success is framed narrowly in terms of pounds and pence, and overlooks the full breadth of social and economic benefits from research.
The purpose of the commission is to assess and develop the mechanisms needed to drive economic growth across the country through research, development, and innovation. We will focus on how connectivity between places amplifies research impact, how local research excellence can drive national economic growth, and what policy and funding frameworks enable better outcomes.
The big questions
Some of the key questions we are trying to answer include:
Connectivity and infrastructure
How does physical and institutional connectivity between UK innovation districts affect their ability to drive distributed economic growth?
What are the infrastructure prerequisites (physical, digital, institutional) for research assets in one region to drive economic growth in another? How do current UK connectivity patterns constrain or enable this?
What role do transport infrastructure, talent mobility, and capital flows play in enabling research spillovers?
Capabilities and assets
What research capabilities are needed across the UK (within and across regions) and how can these be strengthened within a national ecosystem?
How can place-based assets be leveraged through better inter-regional connectivity to support both regional development and national RD&I capacity?
How can innovation ecosystems drive local and national economic growth through research assets?
Outputs and outcomes
What are the effective mechanisms of funding and commissioning RD&I activity that support local and national economic growth?
What are the RD&I policy delivery mechanisms, including and beyond UKRI funding, to deliver better outcomes for people?
What is the ideal configuration of a research funding and support ecosystem that makes the most of place-based strengths and national assets?
Of course we are not the first to examine these questions. But in doing this work we are hoping to try and wrestle with some of the practical contradictions that go beyond saying growth is good, universities should be more business-like, and impact is important. We want to get into some of the messy questions which don’t necessarily have straightforward answers.
These include how regional policy making should consider the role of London, whether investment in infrastructure around knowledge assets has broad enough spillover benefits to justify the cost, whether funding is best spent on inter-city connectivity or regional research specialities, what counts as economic impact, and whether the UK’s brand position should focus on national, regional, or institutional specialities.
A new approach
These questions aren’t easy. If it were obvious how to grow the economy through research, the collection of the country’s greatest minds that work in policy, research and government would have worked out how to do it.
So now, we want to call on Wonkhe readers’ minds. We don’t want this to work as a standard commission which minimises the interesting bit – the debate on the trade-offs – to an appendix on notes from roundtables. Instead, we want to air debates around the difficult considerations and compromises that need making, and make them part of the final outcome.
To this end, we want to hear from readers on their views on the infrastructure, policy, and investment needs, to better enable research to be a driver of economic growth. We will work these pieces up for the site and continually share them to inform the debate. Our advice is to take one of the questions above and send a couple of sentences of ideas to shape into an article. As we carry out initial roundtables we will also share these to prompt further discussion.
The challenge of economic growth and universities’ contribution to it is a perennial issue. In opening up discussion around some of the options, trade-offs, and challenges at the precise moment funders and government are looking at their model, we hope to broaden the debate and chart a new path for universities and research institutions at the heart of the UK’s economic renewal.
This article is published as part of a project between Policy.Partners and UCL. To share your ideas get in touch with James.