Innovation UK > News > Innovation UK Vol5-2 > Enhancing the economy

Innovation has always been at the heart of the British economy, helping to ensure our success internationally and building us a strong reputation in the global marketplace.

It has never been more important, however, than now in the current economic climate, as we look for ideas and strategies to ensure that our economy grows and emerges stronger.

For this to happen, we need to continue investing in new ideas and inventions. We need to keep educating and training people, both young and old, to increase our skilled workforce.

This is where our universities have a vital role to play. The skills and knowledge gained in a higher-education setting equip people for their long-term careers and ensure the UK?s competitiveness in the world economy.

There are now more people than ever before in higher education, taking advantage of the high-quality teaching and resources on offer, while working in a free-thinking learning environment: an environment that challenges while it educates.

What impresses me about these institutions is their ability to adapt to different conditions and to change quickly to help address emerging problems, such as the economic downturn. This innovation is absolutely invaluable.

In response to the recession, 80 institutions took advantage of the government?s £27m Economic Challenge Investment Fund, to provide swift help for individuals and businesses.

The Fund meant that 50,000 people and 12,000 businesses were able to benefit through short targeted courses, training vouchers for the unemployed, and work placements and internships for graduates. Universities are also in a unique position to enhance the UK economy because so many of the successful industries we have in this country are reliant on high levels of knowledge, skill and innovation.

These are sectors such as low carbon, digital communications, life science and the creative industries. If we are to continue to lead the way in these areas we will need to take advantage of the research taking place at UK universities.

Only by looking at these specialist areas and the part they play in an emerging economy can we make sure that we are putting in the necessary work to make them thrive.

Encouraging innovation

Outside of the courses and training they provide, individual universities are already doing a considerable amount of work to encourage innovation in their local areas. Many across the country, including Exeter and Bournemouth, have their own Innovation Centres, connecting students and individuals with local and national business.

These centres offer impressive facilities and support services to promote enterprise, as well as talks and events to provide direction to companies. Most importantly of all, they link our higher education sector ? and the critical thinking on government, education and economics that that entails ? with the industry that keeps this country in such a competitive position worldwide.

I was impressed to see this being taken to a more international footing earlier in the year by the Students in Free Enterprise (SIFE) team at the University of Southampton.

As well as looking at UK issues, SIFE provides an international network of university students working in collaboration with both business executives and academic leaders. These students have been developing sustainable projects, including rice growing in Sierra Leone and micro-lending to enterprising farmers in Madagascar.

The result is two-fold, meaning that while students gain valuable experience of economic work they also introduce tangible benefits to local communities throughout the world. This is innovation in its most valuable form. Linked to this is one of the fundamental strengths of the UK?s higher education sector: research. A huge amount of the science and innovation work that has been taking place in the 21st century has been within our universities.

We need to encourage this as much as possible, at the same time as making sure that universities are exploiting the intellectual property that they generate and are benefiting from it, both financially and reputationally.

This government recognised the importance of national research with the launch of the Innovation Investment Fund this summer, as part of the Building Britain?s Future initiative.

The Fund is intended to assist growing small businesses and spinouts ? which are likely to come in the first instance from universities. We hope that over the coming 10 years this Fund will grow to over £1bn and I?m extremely proud that we have been able to invest in such a worthy scheme.

There is still much more potential for industry to work with university researchers, as businesses often do not realise that this resource is open to them. In fact it is research that underpins the UK economy and enables us to compete abroad.

Responding to the challenges

World-class research and knowledge exchange from higher-education institutions are crucial for responding to the challenges and opportunities of globalisation, which is why the government has been working hard to drive up the economic impact of the research we fund in universities.

Every year through the Higher Education Innovation Fund, we invest over £100m in universities? capacity to engage with business and public services to help transfer knowledge and support innovation. We are also working with the Higher Education Funding Council for England to change the way that research in universities is assessed and funded.

The new Research Excellence Framework, which is the new mechanism used to allocate the £1.6bn research block grant, will for the first time explicitly assess and reward the impact of university research on the economy and society.

Innovation in all its forms is a central part of 21st century Britain and, backed by record investment and supported by universities, will continue to be a lynchpin of this country?s economic development.