Comment: 'UK recognises innovation excellence - but concentrates funding in Mayoral areas'

An Innovation Nation? Absolutely. But not if we leave some of our most promising innovation clusters behind.

Last week, at the Innovation Nation Summit in Manchester, Prime Minister Andy Burnham set out an ambitious vision for Britain to become the world's leading innovation nation, drawing on the ideas advanced by Gordon Brown.

It was an inspiring speech, recognising the extraordinary research, industrial and entrepreneurial assets distributed across the UK.

I was particularly pleased to hear Leicester's space research recognised alongside the UK's other great innovation clusters.

But there is a contradiction at the heart of our emerging national innovation policy which we urgently need to address.

We recognise innovation excellence across the country, but increasingly concentrate the funding to develop it within places that have established mayoral governance.

The latest announcement that Local Innovation Partnerships Funding will be devolved to established Mayors from 2028 follows the earlier allocation of substantial innovation funding to Mayoral Combined Authority regions.

This is good news for those places. I am a strong advocate of Devolution, local leadership and investment in regional innovation.

But what about the rest of us?

Innovation in Leicester

This is not a new concern. I raised it in articles for HEPI in 2023 and again in 2024, arguing that investment in innovation should be determined by economic opportunity, demonstrable capability and need - not simply the maturity of local governance arrangements.

Two years on, the fundamental problem remains.

Consider Space Park Leicester. Led by the University of Leicester, we have built a nationally significant space innovation ecosystem, bringing together more than 25 organisations, world-leading research, major industrial partners, entrepreneurs and investors.

We have supported the emergence of companies such as Perpetual Atomics, which has attracted approximately £6 million in external investment. We play host at Open Cosmos who have raised £260M in their latest fund raising round.

We deliver a European Space Agency Business Incubator where our most recent recruit Shield Space secured £2M in pre-seed funding.

We are creating the conditions in which research becomes commercial opportunity, new businesses emerge, scale and skilled, productive employment grows.

And we are doing this in a city with substantial economic challenges including (GVA is at 82% of the national average), where the benefits of innovation-led growth could and should be transformative.

Regional partnerships

Much of this progress has been achieved through institutional leadership, committed partnerships and, comparatively, modest innovation funding, which were we have won it we have done pioneering and innovative things including a national Space Innovation programme (SPRINT) and a Leicestershire bases IP partnership with local SMEs (VentureVersity).

Imagine what we could achieve with sustained, place-based investment.

We could develop innovation accelerators to help more companies emerge and scale. Open up specialist engineering, testing and prototyping equipment to SMEs. Build stronger pathways between research and industrial application. Improve access to investment finance. Attract more international businesses and develop the skilled workforce that emerging industries need.

These are practical interventions with the potential to generate new businesses, productive employment, private investment and long-term economic value.

They are precisely the interventions that place-based innovation funding should enable.

Funding places outside MSAs

To be clear, the Government's wider commitment of £1 billion to support high-potential industrial clusters offers an important potential opportunity.

But the details matter. We need an accessible, adequately funded route for places outside established Mayoral Strategic Authorities, not simply the possibility of competing for a limited residual allocation.

If the progress to Strategic Authority status is 2-3 years away, we need a bridging solution. We have been choking off the pipeline since 2022 and the end of ERDF.

The so-called devolution desert is not nurturing the flower of the productive future that could, in Gordon Brown’s analysis make every person in the UK £5,000 better off.

The principle should be straightforward: innovation investment must follow innovation potential and economic need, not administrative boundaries.

Britain cannot fulfil its ambition to become the world's leading innovation nation while leaving some of its most promising clusters without equivalent opportunities to develop.

We have the assets. We have the partnerships. We have the ambition. And in Leicester, we have demonstrated what can be achieved.

Now we need an innovation funding system that enables every place with the capability and determination to contribute.

If we are serious about becoming an Innovation Nation, we must invest in the whole nation.