Regional agencies provide a much-needed helping hand for SMEs in developing new products, support services and business practices. Mike Sharpe looks at the incentives and programmes available to give innovation a kick start in the UK's regions
Innovation, science and technology are critical to the prosperity of the UK?s regions. To exploit opportunities in the global knowledge economy, businesses ? especially small and medium-sized enterprises (SMEs) ? have to be competitive and highly productive, and for that they need to innovate. The days of directing business support only at ?high-growth? firms or ?early adopters? are gone. Companies of all shapes and sizes and in all sectors must recognise the innovation imperative and have access to relevant support services and advice.
The regional context is especially important here. For most SMEs, their world view is regional, or even local. Their customers and suppliers lie within a relatively confined geographical area. Even those that operate nationally and internationally tend to fall back on regional resources and support services when it comes to issues such as research and development, training, and finding finance.
This is where regional agencies come in. The regional development agencies (RDAs, in England) and devolved administrations (elsewhere in the UK) provide the first tier of support services for small businesses in their innovation efforts. All emphasise innovation, business growth and entrepreneurship as part of their economic development strategies, and this is generally backed up by separate regional support services for innovation and science.
Information, guidance and advice offered by regional agency support services provide a much-needed helping hand for SMEs in developing new products, services and business practices. Since 2008, the nine English RDAs have had a key role in administering government-funded innovation programmes, now consolidated under the ?Solutions for Business? brand. Most of these are delivered through regional and local Business Links. In certain cases they are supplemented by the RDAs? own initiatives and programmes.
Solutions for Business offers a wide range of support services for companies looking to grow and expand. Not all support services are available in every region: this is down to each RDA to decide, together with its partners, on the basis of regional needs. In terms of innovation, the main support services offered ? which are available in most or a majority of regions ? include:
A number of RDAs also act as gateways to the Small Business Research Initiative (SBRI), a programme (run by the Technology Strategy Board) that aims to use government procurement to drive innovation in SMEs.
The world of regional government is a quagmire of acronyms and abbreviations that are difficult to avoid in any discussion of innovation support. Here is a list to make reading this article easier:
There are many regional variants and flavours in how these support services are delivered and, in some cases, RDAs supplement the general offerings with their own programmes aimed at specific niches.
In the Northwest, for example, it has support services including the High Growth Programme is a three-year business coaching initiative aimed at ?high growth? businesses and entrepreneurs. It supports budding entrepreneurs with ideas that can achieve a turnover of £500,000 within three years, and established SMEs with capacity to expand by at least 20% a year. Over three years, it is expected to generate around 2,000 jobs and provide a £250m boost to the region?s economy.
NWDA also funds Knowledge to Innovate (K2i), an integrated programme designed to help SMEs that recognise the importance of innovation, but require practical assistance to successfully take their knowledge and experience to the next level. K2i encourages companies to look beyond product innovation to consider other ways in which they should innovate. Business processes and models, organisational structures, markets and supply chains, and leadership for innovation are just some of the areas covered. The website includes a 10-minute self-assessment which small business managers can use as a ?health check? on their readiness for innovation.
The South West RDA support services are currently working with partners to develop the first two pilot Business Technology Centres (BTCs). Operating on a commercial basis, BTCs provide businesses with access to technical expertise and facilities to help them develop and commercialise new technology. This gives technology-based businesses an alternative route to business support services under the Solutions for Business portfolio.
In the South East, business support services related to innovation and technology are delivered under the South East Business Innovation and Growth brand. This provides focused support services for companies with the potential to innovate and grow significantly. Locally based Innovation and Growth Teams (IGTs), staffed with experienced business professionals, coaches and mentors, provide connections to the knowledge base and other specialist support services. Unusually, their remit includes help for large corporations (those with a turnover of £100m plus), as well as SMEs.
The London economy has boomed over recent years and, as one of the leading global cities, it might look as if companies here have no need of support services. But outside the Square Mile the problems faced by small businesses are much the same as elsewhere in the UK. The London Development Agency?s Innovation Programme aims to embed innovation and design practices as key drivers for growth across the business community. The London Innovation Network ? part of the Enterprise Europe Network ? provides practical, hands-on support services and information for businesses seeking funding to help expand their business into Europe, or wishing to develop technology partnerships. Knowledge Connect is a regional brand, based on the Innovation Vouchers scheme, providing grants of up to £10,000 to SMEs to undertake collaborative projects with the wider knowledge base.
The East Midlands has one of the strongest regional innovation brands. East Midlands Innovation (EMI) embraces a portfolio of support services and resources, both online and offline. A series of business-led innovation networks, known as iNets, provide support services to help businesses and individuals in the region?s key sectors become more innovative. At present, there are iNets for Transport, Food and Drink, Sustainable Construction, and Healthcare and Bioscience. EMI?s FP7 Service encourages increased regional participation in the EU programme, helping to lever European funding into the East Midlands to support research and development. iExchange is an open forum that lets people share ideas and offer opportunities to work in partnership with businesses or research organisations.
All of these elements come together in the regional iFestival, a six-week celebration of innovation ? which is held in the spring ? that includes an exhibition, roadshow, and awards dinner. EMI also has its own video channel on innovation, iChannel, and publishes its own regional innovation magazine, iLink.
One area where regional character comes to the fore is in support services for clusters, networks and ?centres of excellence?. Each region seeks to play to its own strengths here: in some cases this derives from the presence of key traditional industries; in others it is a result of rapid growth in new or emerging sectors, perhaps as the result of spin-outs from universities or large science-based companies. As might be expected, information and communication technologies, digital media and creative industries, bio and life sciences, nanotechnologies, and environmental and low-carbon technologies all feature strongly.
In the East of England, EEDA has set up a network of Enterprise Hubs to support the region?s key knowledge-based sectors. These aim to offer support services to enhance technology and knowledge transfer by encouraging networking in these regionally important sectors and clusters. A number of physical and virtual Enterprise Hubs have been established in fields such as life sciences and healthcare, low-carbon innovation, ICT and product innovation. EEDA is also developing a select number of incubators, innovation centres and science parks linking knowledge-based businesses with higher education, research and development centres and major companies.
Yorkshire Forward follows a rather different approach with its support services. It directly employs a team of ?strategic sector champions?, experienced industrialists who identify opportunities for innovation through collaboration, and broker relationships between businesses and the science base. There are currently five such champions covering the digital, health, advanced engineering and metals, food and drink, and environmental technologies sectors.
This approach is complemented by Virtual Enterprise Networks (VENs), jointly funded by Yorkshire Forward and the EU. These bring together SMEs with complementary expertise, allowing them to compete for major contracts as a single entity. VENs take the supply-chain process to a new level, by carefully selecting member companies and integrating them into a ready-made supply-chain network. Members are strictly assessed in terms of the nature and capacity of their core competencies, creditworthiness and capacity to collaborate with others. Each VEN consists of 200 plus companies, joined by universities and research institutes.
Nanomaterials have huge potential, offering opportunities to revitalise existing products and brands, open up entirely new markets to meet evolving needs, as well as considerable savings in energy and raw materials. Here, the North-East region has made the running. Its NanoCentral initiative has been set up to accelerate the commercialisation of value-adding nanomaterials. NanoCentral promotes the competitive advantages to be gained through nanomaterials, assists businesses in forming supply-chain collaborations, and provides access to targeted safety, health and environmental advice. It draws on technical expertise and broad business experience across the region and beyond for its support services.
With climate change high on the agenda, several RDAs have identified low-carbon innovation as a focus for regional support services. EEDA?s Low Carbon Innovation Programme (LCIP), for instance, is a five-year strategy, launched in 2009, that draws together various business support strands to assist companies developing innovative low-carbon technologies and processes. A broad range of projects is being supported ? low-carbon energy, buildings, vehicles, and consumer technologies and products ? aimed at reducing the carbon-intensity of the economy. This year, the Programme is being extended to SME supply chains, so as to ensure small businesses also benefit from innovation and support services in these areas.
Low carbon is also a focus in the West Midlands under the transport cluster. The region (represented by AWM and other regional partners) has recently been successful as part of a consortium for the Climate Change Knowledge Innovation Community (CC-KIC), a major pan-European project to stimulate research and innovation in low-carbon and energy-saving technologies.
A Welcome in the High-tech Valleys
In Wales, innovation support services are offered under the Technium brand, an initiative of the Welsh Assembly Government?s Department for the Economy and Transport. With the motto ?from big ideas to big business?, the initiative aims to help new and early stage science and technology businesses overcome obstacles to success and provide an environment where they can prosper. It also caters for international companies looking for a foothold in the UK market.
Technium?s services cover three main areas. First, accommodation: modern office space and state-of-art facilities are available in a choice of 10 locations across Wales. Some of these have a specific technology focus, such as Digital, Performance Engineering, and Sustainable Technologies, although they are all open to companies from any technology sector. Second, a range of specialist support services are on offer covering everything from finance and technology to HR and business expansion. In most cases these support services are provided by independent consultants and service providers, who give at least two hours free advice. Third, networking opportunities: Technium?s connections with leading national and international companies and academics help Welsh SMEs to build strong, mutually beneficial relationships. Specialist support services are also available for academics looking to spin-out a new technology-based business.
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Scientific developments and leading-edge technologies help companies improve efficiency, streamline production, develop new markets and increase exports. Regional science councils support these advancements by ensuring the regional science base addresses the needs of businesses and by improving the science infrastructure and incubation facilities. The councils are private-sector-led partnerships of business, academic and regional development organisations working towards a common vision for science development in their regions. In some regions they are known as ?science and industry? councils or ?science and innovation councils?.
The Northwest Science Council places a key emphasis on science infrastructure and incubation. For instance, NWDA has invested over £50m in the Daresbury Science and Innovation Campus, which has been named by the government as one of two strategic science sites in the UK. Manchester and Liverpool Science Parks each offer high-spec office space close to city centres for companies in the knowledge and high-tech industries, such as biotechnology and ICT. Westlakes Science Park in Cumbria is an important knowledge centre for the nuclear, healthcare informatics and environmental sciences sectors. Incubation and grow-on facilities for young, high-growth companies are available at each of these science parks as well as elsewhere in the region.
Yorkshire Science, the regional science and innovation council for Yorkshire & Humber, has recently been rebranded as Yorkshire Innovation (YI). The change signals a new phase in Yorkshire Forward?s Regional Innovation Strategy, marking a shift from strategy into implementation and focus on business outcomes. A network of high-profile innovation champions is being set up who will encourage innovative ways of working and promote an innovation culture. YI will also identify innovation hubs where support services will be available to businesses in areas such as creativity, design, leadership, financial management and regulation. And it will encourage organisations across the region to participate fully in the EU Framework programmes.
Catalyst, London?s Science and Industry Council, has made life sciences its key focus. Its BioLondon initiative strives to create an environment that delivers world-class biotechnology businesses. Incubation, clustering, skills development and early stage funding are the main activity areas. Science parks ? a product of the 1970s and 80s ? have proven to be an effective means of building bridges between science-based businesses and academic and corporate research. They continue to be a focus for regional investments. One of the newest is NETPark in Durham. The 250-acre technology park (33 acres in the first phase are already underway) offers very-high-speed broadband internet connectivity, facilities for conferences and meetings, and a dedicated Business Support Centre offering support services, and advice on everything from intellectual property law, to enterprise and entrepreneurship, languages and cultural issues. NETPark is also home to two of the University of Durham?s most advanced technology research activities.
In neighbouring Yorkshire, the flagship initiative is the Advanced Manufacturing Park (AMP). Situated just off the M1 at Rotherham, this is a world-class manufacturing technology park providing advanced solutions which ensure competitive advantage for industry. The AMP focuses on materials and structures, covering metallic and composite materials typically used in precision industries including aerospace, automotive, sport, environmental and energy, oil and gas, defence, and construction. At the heart of the park, AMP?s Technology Centre offers 27,000 sq ft of flexible office/workshop space for innovative and forward-thinking entrepreneurs and companies in advanced engineering, manufacturing and materials. The focal point for Yorkshire?s Advanced Engineering and Metals cluster, AMP is also home to the National Metals Technology Centre (NaMTeC), expected to benefit more than 500 businesses across Yorkshire & Humber and a further 5,000 nationwide.
Another major development is underway in the South West, where £300m is being invested in the Science Park for Bristol and Bath. Known as SPark, the park will occupy 40 hectares and provide employment for over 6,000 highly skilled people. One of the first developments will be the Innovation Centre, uniting the three world-class universities of Bristol, Bath and the West of England. It will also foster a close working relationship with leading South West industry. This builds on the RDA?s earlier investments in incubation in the two cities, for example the highly successful SET2 incubators.
The Science City initiative was launched in 2005 to help focus science-based economic development within the regions. A competition was held as a result of which six cities were awarded Science City status on the basis of three criteria: world-class universities; successful companies with a science and technology focus; and potential to use science and innovation to boost the region?s economy. The successful cities were Birmingham, Bristol, Manchester, Newcastle, Nottingham and York. The definition of ?science? is very broad: it covers technology, social sciences, engineering and digital media, as well as physical, chemical and biological sciences. Each science city has unique strengths and challenges but all are working to use their science city status to drive economic development through science and technology and to improve support services and linkages within the scientific community. Many of their activities also focus on public understanding of and engagement with science. In the West Midlands, for example, the Universities of Birmingham and Warwick are receiving £10m from AWM for the Science City Advanced Materials programme, to reinforce the region?s position as a world leader in the development and application of advanced materials. The two centres will work collaboratively with industry on projects in areas such as biomedical/healthcare, energy, aerospace, automotive, and advanced manufacturing.
Venture funding receives rather less attention from regional agencies than other aspects, perhaps reflecting the centralisation of capital markets. NStar, an early stage venture company, was created by One North East to invest £33m of funding in innovative technologies. This has been superseded by six new funds, launched in January 2010, managed by five different fund management companies. The funds are targeted at start-ups and growing companies across sectors and stages of development and will invest from £5,000 to £1.2 m in hundreds of deals from 2010 to 2014. They are part of a new £125m holding fund established with investments from the European Investment Bank, European Regional Development Fund and One North East.
Similar mechanisms are available in the West Midlands through the Advantage Early Stage Fund and the Advantage Growth Fund. These and other finance opportunities are accessible via the West Midlands Finance portal.
Everybody likes prizes, so it is no surprise that awards also feature in regions? innovation strategies. Awards and competitions are a good way of recognising the success of innovators and entrepreneurs, as well as encouraging others. They can also provide valuable publicity for the RDAs themselves, especially where participants have benefited from regional schemes and support services.
The West Midlands has led the way here. Its Lord Stafford Awards, launched in 1997, recognise and encourage the development of collaborative relationships between businesses and universities. They celebrate the achievements of academics and industrialists and are a chance to be recognised as one of the region?s innovators. Other regions have now adopted the scheme, with the East Midlands making its first awards in 2008, followed by the East of England in 2009. Yorkshire Forward launched a similar scheme in March 2008. Known as Innovator/10, the awards celebrate and reward the innovation and creativity in the region?s businesses and universities. Winners receive a cash prize of £3,000 to invest in development or research that will enable their businesses to further enhance their innovative progress.
Open innovation is a process gathering pace at many large organisations, which realise they can bring new products and services to market more quickly by partnering with other companies. In the South East, SEEDA has recently announced a major commitment to open innovation so as to ensure SMEs benefit too. Specifically, it aims to bring innovative ideas from small businesses to the attention of larger corporations. To do this, SEEDA is partnering with Inngot, an independent IP-brokering service. Inngot?s system allows client businesses to describe their IP clearly and concisely without giving away their trade secrets. SEEDA?s staff will use the information collected to broker connections and collaborations between large and small businesses, helping both groups to realise their growth aspirations.
The Yorkshire Science & Technology Network (YSTN) is an ongoing series of networking and showcase events which bring new research and technology closer to businesses in Yorkshire & Humber. Sponsored by Yorkshire Forward, the events are designed to increase collaboration between innovative companies and the outstanding science and technology research base within the region?s universities.
Past speakers include Sir Tim Berners Lee (inventor of the world wide web), Doug Richards (of Dragons? Den), Andy Stanford Clark (master inventor for IBM), and Charles Leadbeater (top management thinker).
Announcements made late last year confirm the Regional Development Agencies? central role in providing support services to small businesses as they fight their way back from recession. New industries, such as bio-sciences, digital, low-carbon technologies and advanced manufacturing, will receive increased investment with an Innovation Investment Fund worth £325m.
In addition, the existing Strategic Investment Fund, part of the Enterprise Finance Guarantee Scheme, is to receive an increase of £200m that will include £150m to support low-carbon investment. The Department for Business, Innovation and Skills (BIS) has also given RDAs? support services and local authorities new roles to back growing industries. Under the Partnerships for Growth plan, RDAs and local authorities across the country will collaborate more closely to build on their local strengths, while ensuring public investments are targeted at the projects where they can have most impact. Among other issues, the RDAs will set priorities for skills funding and will work with national and local partners to ?join up support for innovation, infrastructure and enterprise?.
Whereas to date the RDAs have tended to work within their own boundaries and solely for the benefit of their regional businesses, future activities are likely to rely much more on collaboration. Over the next 18 months RDAs are set to invest an estimated £1.1bn in support of the government?s New Industry, New Jobs strategy. This is on top of investments of £900m already made by RDAs in priority sectors.
Projects in the pipeline (with the relevant agencies) include:
With government, business organisations and higher education all emphasising the importance of closer collaboration within ?regional ecosystems?, the regional dimension of innovation looks set to become even more significant in future.
Scotland?s support services and spirit of innovation
Scotland has a proud history of innovation and discovery ? James Clerk Maxwell, Thomas Telford, John MacAdam and John Logie Baird, to name just a few. Today, actions to support Scotland?s innovators are led by Scottish Enterprise (SE), which labels itself as ?Scotland?s agency for innovation, investment and enterprise?. SE?s Innovation Support Services offers free and impartial advice to businesses on how to plan and implement an innovation project. Experienced innovation advisers work with managers to review the project?s business case and implementation plans so as to deliver the maximum return for the business. They are also able to suggest how to make the most of available resources and any other additional support services.
An additional strand caters for those looking to get a high-tech business off the ground. Scottish Enterprise?s High Growth Start-up team provides intensive support services to pre-start companies with high-tech ideas and high-growth potential, to ensure they have the best opportunity to maximise their growth potential. Enterprise Fellowships help researchers and recent graduates spin-out their business ideas. Fellows receive a year?s salary, business training to help take their idea forward, and access to networks of mentors, business experts and professional advisers. Finally, the Proof of Concept Programme helps researchers from Scotland?s universities, research institutes and NHS Boards export their ideas and inventions from the lab to the global marketplace.
Two separate Scottish government initiatives, the Innovators? Counselling and Advisory Service for Scotland and the Intellectual Assets Centre, provide advice and support services for individual innovators, inventors and businesses on protecting and exploiting intellectual property. Another initiative is the Scottish Seed Fund (SSF), which provides funding of between £20,000 and £100,000 for start-up and growing companies.
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Innovation in Northern Ireland
Innovation support services in Northern Ireland broadly reflect those available through the English RDAs. Schemes such as Grant for R&D, Innovation Vouchers, Design Advice Service, Knowledge Transfer Partnerships and European Enterprise Network are all on offer, delivered through the economic development agency Invest Northern Ireland. Venture capital funding for early stage businesses is also available through the Northern Ireland Spin-Out Fund (NISPO).
A new and distinctive feature of the Province?s innovation infrastructure is a network of Competence Centres. These are business-led initiatives that aim to deepen collaboration between industry and research institutions even further so as to fully exploit the opportunities offered by new technologies. They build on an existing network of Research Centres of Excellence, which have proven to yield significant commercial returns and additional research expertise. The move follows a recommendation from MATRIX: The Northern Ireland Science Industry Panel, which highlighted the need to create a new working environment for business, government and academia where they can combine their resources in a market-led approach to innovation.
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Mike Sharpe is a business consultant, analyst and writer. He has worked with both public and private sector clients on innovation issues and has been active in European research & innovation programmes since 1992. He was a co-founder of PIN-SME, a pan-European network of ICT SME associations.
Added the 26 April 2010 in category Innovation UK Vol6-1