30 May 2016
Regional Innovation Monitor Plus 2016
Regional Innovation Report Wales (Advanced materials and nanotechnology)
To the European Commission Internal Market, Industry, Entrepreneurship and SMEs Directorate-General Directorate F – Innovation and Advanced Manufacturing
www.technopolis-group.com
Regional Innovation Monitor Plus 2016
Regional Innovation Report Wales (Advanced materials and nanotechnology) technopolis |group| in cooperation with
Meirion Thomas, CM International Dr Dylan Henderson, CM International
Table of Contents
Executive Summary 2! 1. Advanced Manufacturing: Advanced Materials and Nanotechnology 5! 1.1 Overview of performance and trends 5! 1.2 Business sector perspective 6! 1.3 Scientific research potential 8! 1.4 Role of intermediary institutions 10! 1.5 Developing skills for the future 12! 1.6 Major investment projects 13! 1.7 International cooperation 15! 1.8 Policy support and delivery mechanisms 17! 1.9 Good practice case 19! 1.10 Leveraging the existing potential 23! 2. Regional Innovation Performance Trends, Governance and Instruments 26! 2.1 Recent trends in innovation performance and identified challenges 26! 2.2 Institutional framework and set-up 28! 2.3 Regional innovation policy mix 31! 2.4 Appraisal of regional innovation policies 36! 2.5 Policy good practice 37! 2.6 Possible future orientations and opportunities 38! Appendix A Bibliography 41! Appendix B Stakeholders 42!
Table of Figures
Figure 1 The Compound Semiconductor Centre: strategic vision ...... 14! Figure 2 Innovation performance indicators for Wales relative to EU28 average (2011) ...... 26! Figure 3 Engagement in innovation activity relative to UK regions (2011) ...... 27!
List of Tables
Table 1 Existing regional innovation support measures ...... 34!
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PREFACE In the context of the growth and investment package set out in the Investment Plan of the European Commission, the Regional Innovation Monitor Plus (RIM Plus) provides a unique platform for sharing knowledge and know-how on major innovation and industrial policy trends in some 200 regions across EU20 Member States. Launched in 2010, the Regional Innovation Monitor aimed at supporting sharing of intelligence on innovation policies across EU regions. Building upon the experience gained and results obtained during the period 2010-2012, the RIM Plus 2013-2014 provided practical guidance to regions on how to use the collected information, via a network of regional experts. Since 2014, the RIM Plus has introduced a thematic focus on advanced manufacturing. The RIM Plus 2015-2016 evolved from a general monitoring of innovation policies towards establishing a more thematic focus in selected areas in order to contribute to improving the competitiveness of European regions. Particularly, the RIM Plus aims through its activities and in close cooperation with the regional stakeholders and other relevant initiatives to: •! Contribute to the development of new and open spaces of collaboration and exchange on advanced manufacturing, each with a clearly defined thematic focus. •! Play an enabling role in providing evidence-based information on specific themes and bring in outside perspective from other regions. •! Map out regional practices in support of advanced manufacturing and relevant pilot/demo projects and work towards involving the relevant stakeholders. •! Provide an easy access and comparative overview of regional innovation policies and relevant actions in the field of advanced manufacturing. •! Share the lessons learned with the European Commission services to feed into the preparation of future programmes.
The main aim of 30 regional reports is to provide a description and analysis of developments in the area of advanced manufacturing with a clearly defined thematic focus and regional innovation policy, taking into account the specific context of the region as well as general trends. All regional innovation reports are produced in a standardised way using a common methodological and conceptual framework, in order to allow for horizontal analysis, with a view to preparing the Final EU Regional Innovation Monitor Plus report. European Commission official responsible for the project is Alberto Licciardello ([email protected]). The present report was prepared by Meirion Thomas and Dr Dylan Henderson ([email protected] / [email protected]). The contents and views expressed in this report do not necessarily reflect the opinions or policies of the regions, Member States or the European Commission. Copyright of the document belongs to the European Commission. Neither the European Commission, nor any person acting on its behalf, may be held responsible for the use to which information contained in this document may be put, or for any errors which, despite careful preparation and checking, may appear. Further information: https://ec.europa.eu/growth/tools-databases/regional-innovation-monitor
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Executive Summary
1.Advanced Manufacturing: Advanced materials and nanotechnology •! Challenge 1: The global value chain makes the sector in Wales potentially vulnerable Most of the companies active in the Advanced Materials and Manufacturing (AM&M) sector in Wales operate within global supply chains. The larger companies are, most typically Tier 1 suppliers, while SMEs, which form the major part of the sector in Wales, are usually Tiers 2 and 3. The global value chain position of the sector reduces the innovation activity of a large number of firms. They have little incentive to innovate outside of the needs of those companies occupying the Tiers above them in the supply chain. As a region and country with open borders to a much larger national and EU economy, companies in the advanced materials sector in Wales risk the leakage of skills and technologies to other external parts of the value chain. This inevitably increases, further, their vulnerability and the risks associated with investments in their technology base, innovation and skills. •! Challenge 2: Weakness in capacity of SMEs to invest in leading edge technologies, advanced skills and access to the global marketplace The SME base in Wales, particularly in the AM&M sector, demonstrate a long standing weakness in its capacity and capability to make the scale and type of investments necessary to effectively acquire and apply leading edge technologies, and to invest in new or upgraded advanced skills. Welsh Government policies and investment programmes including the EU Structural Fund programmes have been targeted at this challenge area to a significant extent for many years with only limited impact. •! Challenge 3: Skills shortages in high level technical skills in the materials and nanotechnology sub sector With increasing employment in the advanced manufacturing sector generally, demand outstrips supply in Wales. This is particularly the case with regard to the development and application of high level technical skills in the materials and nanotechnology sub sector. The same appears to be the case in respect of relevant R&D skills. 2.Regional Innovation Performance Trends, Governance and Instruments •! Challenge 1: Solving the long-term macro-level structural deficiency in the economy For over 30 years the Welsh economy has underperformed and has continued to fall back against both UK and EU measures of regional prosperity such as Gross Domestic Product (GDP) per capita. Although manufacturing productivity improved because of foreign direct investment, a period of significant retrenchment by the foreign investors began around 2000. As a result Welsh SMEs lost the leadership of large multinationals in supply chain practices, investments in technology and innovation. This weak overall economic performance is indicative of serious structural deficiencies in the Welsh economy with too few innovative and R&D performing companies. However, a few sectors of potential strength do stand out, including Life Sciences and Health, Low Carbon Energy and Environment, advanced Engineering and Materials, ICT and the Digital Economy. These areas point the way to a potentially more ‘smart’ economic and innovation policy.
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•! Challenge 1: Achieving greater balance in the R&D performance of the region Out of the three components of R&D expenditure commonly used as a measure of innovation performance, Wales matches the EU28 average in only one, expenditure on R&D by its higher education sector. This is particularly important because of the lack of one of the alternative drivers of R&D expenditure, namely government research institutions. Wales has no such institutions and therefore misses out on spin-offs and knowledge based cluster developments that typically arise as a result of government R&D activity. Welsh SMEs appear strong at interacting with other SMEs and universities and are incremental innovators rather than radical innovators. There is the potential opportunity for more ‘open innovation’ forms and patterns to emerge that will allow the R&D performance to be more balanced. •! Challenge 3: Successfully specialising in high value activities and knowledge based sectors Despite their innovation efforts and R&D investments the Welsh SME base has struggled to make a significant indent into the loss of major multinationals from the economy in the early years of the decade. With too few innovative and R&D performing SMEs and a history of being involved only at the low-value end of key growth sectors such as electronics, automotive and financial and business services, the only feasible way forward for the economy and its innovation performance is to specialise in high value activities and knowledge based sectors. 3. Future Actions and Opportunities With regard to the advanced materials and nanotechnology sector •! Further capitalise on the strength and global value chains of ‘anchor’ companies The advanced manufacturing sector in Wales is fortunate in that a significant number of leading companies with a base in the region have strong roots in Wales and strong links into their global value chains. The Welsh Government has recognised that engaging these companies to ‘anchor’ their investments and skills into the Welsh sector is vital. Accordingly, a structure of industry sector Ministerial Advisory Panels, National Research Networks and business sector forums relating to the Welsh AM&M sector have been established, as part of the policy landscape, to achieve this anchoring. This is also expected to more easily leverage the knowledge, skills and networks available from these companies into the sector and into collaborations with Welsh University researchers and SMEs in the local supply chains. There remains a continuing need and opportunity to further capitalise on the strengths of these anchor companies and to build even stronger ‘clusters’ of activity around specific niches in leading edge technology and skills that are relevant to the anchors and their value chains. •! Maintain a coherent focus on the sector through science, innovation and sector policies, programmes and supports The AM&M sector in Wales is well recognised as a priority across a number of policy areas and support for the economy. However, it is important that this is not only maintained but is also refreshed as appropriate. The political consensus that has gradually emerged around the strategic focus on science, innovation and key priority sectors including the AM&M sector needs to withstand political change and challenges. In this respect the involvement of industry leaders and key businesses in advisory and leadership roles is critical. Further, while the focus on and leverage of the large anchor companies is appropriate and necessary, the long term health of the sector will come from a strong, dynamic SME base. Here the opportunity exists to build up strong clusters around niche areas.
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Finally, while Welsh participation in FP7 was, in general, behind that of comparator countries and regions, the focus on the AM&M sector was rewarded with some strong participation. The opportunity to further increase and leverage participation of Welsh companies and researchers in the national and EU research programmes, notably Horizon 2020, is immediate and urgent. •! Extend and cement Welsh sector forums and networks into international forums and networks The Welsh AM&M sector is characterised by a series of vibrant, industry led networks and forums that contribute to policy, business and supply chain developments and to science and research activities. The opportunity exists for this pattern of collaboration to be further extended into national (UK) and EU level networks. This could be targeted at UK national and EU forums and platforms, where research and implementation excellence can be demonstrated and opportunities can be maximised for making further, sustainable investments and innovation in the sector in Wales. With regard to innovation policy •! Developing a strategic focus on innovation The creation of the Innovation Advisory Council for Wales (IACW) implies that there is potential for new methods and approaches to be developed, which enhance existing support. This is, arguably, much needed as a way of strengthening the diversity of Wales’ innovation ecosystem, including the support on offer, while maintaining the strategic focus on RD&I at a time of strong implementation. •! Exploiting and embedding new research and innovation infrastructure There are a wide range of innovation initiatives that are in their early stages of implementation. This includes the many investments in university innovation campuses across Wales. These represent significant investments and a new focus on promoting interaction. The key to such initiatives will be their success in bringing in new research funding from industry and competitive sources, and engaging in collaborative projects with both large and small companies in Wales. •! Harnessing the potential of open innovation networks in Wales The Welsh Government have been working with their strategic ‘anchor’ companies, for a number of years, to develop new ways of maximising their impact on innovation in Wales. This holds the prospect of new networks to be developed, with universities and smaller companies working together on innovation projects, while gaining a better understanding of the markets they operate in and technical solutions required, sharing best practice and so on. This offers a new model for engaging smaller companies in commercial innovation projects. Any lessons learnt in that respect should be captured to refine future innovation support. •! Broadening out the role of innovation to support multiple strategic and societal challenges Innovation support in Wales has primarily been framed as a technological activity with commercial benefits. There is growing recognition, however, of the potential for innovation to contribute towards the development of solutions to grand challenges. This is recognised clearly in Innovation Wales, and recent research on topics such as public service innovation. This is an area where some activity is taking place through initiatives such as the Strategic Business Research Initiative (SBRI). There is potential, however, for this to be strengthened and targeted particularly at key societal challenges facing Wales and the wider world.
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1.!Advanced Manufacturing: Advanced Materials and Nanotechnology
1.1!Overview of performance and trends Manufacturing in Wales contributes €24.4b to UK manufacturing output (University of South Wales, No date) and accounts for 15.8% of total economic output in Wales. This figure is well above the national average for UK regions confirming that manufacturing in general is critical to the Welsh economy. With just under 5% of the total UK population, Wales produces almost 5% of the UK’s manufacturing exports. An Engineering Employers Federation (EEF) report confirms that the European market is Wales’ largest market, accounting for 43% of manufacturing exports. However, this is below the proportion of UK manufacturing exports going to the EU. By contrast, the North American market is more important for Welsh manufacturing exports with 24% of the region’s exports going to North America, above the UK average of 15%. Exports to the Middle East and North Africa account for 14% of Welsh exports and are also above the UK average (Engineering Employers Federation, 2015). Around 157,000 people are employed in manufacturing in Wales, which accounts for 12% (or one in eight) of the region’s workforce. Wales has seen strong employment growth in the manufacturing sector since the recession, with an additional 15% of jobs being created in the sector between 2010 and 2014 (University of South Wales, No date 1). The Welsh Government have prioritised the Advanced Materials and Manufacturing (AM&M) sector, including sub-sectors such as: •! Aerospace and Defence: comprising 160 companies; employing 23,000 people; with cumulative sales of over €6b. Key companies in this sub-sector include Airbus, GE Aviation, BAE Systems; Nordam; British Airways; •! Automotive manufacturing and research: comprising 185 companies; employing 16,000 people; with cumulative sales of €3.5b. Key value chains in this sub-sector include large multinationals, such as Ford and Toyota (although the majority of companies in the sector in Wales are Tier 2 and 3 suppliers) and alternative fuels research companies covering hydrogen research and technology; •! Optoelectronics/Photonics: comprising 85 photonic/opto-electronic companies; employing 5,000 people; with cumulative sales of €1.2b. Key players include such as Tata, Sharp, IQE and Qioptic. It is also relevant to include the technology intensive part of the electronics and software sector where significant global companies such as Sony employ, in total, around 24,000 people and are important developers and integrators of advanced materials and nanotechnologies. Global trends for the sector as identified in UK level studies (Government Office for Science, 2010; and Technology Strategy Board, 2008) indicate that companies and scientific research institutions are facing challenges associated with uncertainty in global energy and raw material supplies; threats from low-cost manufacturing in emerging countries; sustainability concerns with a drive towards energy efficiency, the low carbon economy, recycling, reuse and eco-design; and the need for innovation to allow R&D to create more value-added products. More specifically, a recent Welsh Government sponsored debate was held with business leaders from the sector, scientific researchers and policy specialists to consider specific trends and drivers for the AM&M sector in Wales (University of South Wales, No date 2). The resulting analysis focused around a number of similar, but more specific, trends expected to affect the sector in Wales. These included:
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•! Resource scarcity offering a key challenge for the sector to design ‘re-use’ into the specification and manufacture of engineered products and to achieve engineering solutions that keep resource use relatively low and allow reuse and recycling of products once they are past their useful life. Consequently, the drive for new, more resource efficient materials will intensify allowing lower material use and the replacement of ‘traditional’ materials. Cost reduction technologies and processes will therefore be at the forefront of both technological and economic trends in the sectors. •! Changes in the value systems under which societies and the global economy operate will have an impact on the sector in terms of the materials that are used and the engineered products that are produced, but also in terms of the means of production. For example, rapid prototyping and 3D printing technologies offer the opportunity for much greater customisation of goods and services. •! Creativity and complexity were seen as almost parallel drivers where managing complexity was regarded as a major challenge, while embracing and enhancing creativity was seen as a significant opportunity. •! Convergence of a number of trends including sustainability, connectivity, ‘big data’ and communications and automation technologies were identified as underpinning a ‘3rd Industrial Revolution’ where new modes of industrial production will become embedded in the manufacturing and service economies of the world1 and will drive the creation of new business models based on customised rather than standardised added value. •! Data-driven manufacturing and engineering in the form of design inputs or engineering technologies and systems that maintain manufacturing processes on the basis of detailed measurement will require an increasingly significant effort gathering, analysing and manipulating data in the manufacturing environment. Big data applications and sensor and instrumentation technologies are already allowing significant breakthroughs to take place.
1.2!Business sector perspective Recent reports and commentaries on the Welsh manufacturing sector suggest that there is an overall ‘upbeat picture in most areas’.(Engineering Employers Federation, 2015) This is confirmed by the evidence that, despite being one of the UK regions with the lowest business confidence in the UK, Wales is one of only four UK regions reporting positive investment intentions for the manufacturing sector. The output trend performance of the AM&M sector in Wales since 2011 has, on average, been above that of the UK as a whole, apart from a deep decline at the end of 2012 and into early 2013 from which the sector recovered quickly. Industry sector leaders are, however, cautious about prospects for the short to medium term and warn of continuing weaknesses. For example, a CEO of an advanced manufacturing company who also acts as Chair of the Industry Wales Board commented in July 2015 that: ‘the Welsh manufacturing economy continues to reflect the overall UK performance. The position is one of company growth overall but concerns about longer term productivity growth and the skills gap. There is a growing need to future proof our sector to remain globally competitive.’(Engineering Employers Federation, 2015)
1 See: http://www.economist.com/blogs/schumpeter/2013/10/manufacturing
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In respect of innovation activity, Wales is firmly in the ‘follower’ category amongst EU regions and countries (Regional Innovation Monitor Plus, 2015). Further, Wales may be described as a ‘connected’ region and country, a secondary, technology-oriented region connected to the national (UK) hub and with some leading locations and companies within it. This status is, to a large extent, explicable as a consequence of the fact that companies working within the main sub-sectors of AM&M in Wales are for the most part Tier 2 and 3 companies that are positioned within highly competitive and globally oriented value chain structures. New start-ups or emerging companies tend to be positioned within the value chains rather than in radical or breakthrough technologies. Having said that, there are examples of new advanced materials companies taking a strong position in the sector, e.g. IQE plc. Such examples are, however, rare. Relatively intense clusters of supply chain activity can be observed notably in Wales’ aerospace and defence sector, where geographical proximity between large multinational companies and SME supply chain companies has created a collaborative tradition and has supported technological innovation within the supply chain. One Welsh study made comparisons of cluster agglomeration for all AM&M sectors in regions of the UK (Miller Research, 2014). In this study, Wales’s aerospace sector ranked 4th in the UK in terms of size and specialisation. However, Wales’ automotive sector, while significant for the Welsh economy, ranked lower for both size and specialisation at a UK level, illustrating that the absolute size of the sector needs to increase if Wales is to benefit from cluster agglomeration in the sector. In the UK, only one AM&M sector makes it onto the top 100 clusters in the EU (the automotive sector in the West Midlands), with Wales significantly behind that, suggesting that Wales’ AM&M sectors have a significant challenge to become more significant and competitive globally. Objectively, the majority of companies in the advanced materials sector in Wales would best be described as concerned with ‘cost optimisation and process innovation’ because of their position in Tiers 2 and below of their global value chains. However, in a number of ‘niches’ in the sector in Wales there are examples of Pioneers/Leaders and Endogenous innovative companies. •! In the Aerospace sector, Airbus UK pioneered the large scale use of composites for aviation and, in particular, the use of composites and other advanced materials for producing large commercial aircraft. Airbus has been a leader in its sector for decades and, in its main wing manufacturing facility in North Wales, its highly skilled workforce is responsible for assembling the wings for all Airbus civil aircraft. Producing over 1,000 wings a year, the site employs more than 6,000 people, primarily in manufacturing, but also in engineering and support functions. The application of lean manufacturing activity has shortened lead-times and improved efficiency of products and processes. •! As endogenous innovative company, IQE plc, is the leading global supplier of advanced wafer products and wafer services to the semiconductor industry. The wafer products are used by major global chip companies to produce the chips which enable a wide range of high-tech applications. The materials enable a diverse range of markets including wireless communications, advanced solar power (CPV), high resolution infrared systems, high efficiency LED lighting, efficient power switching and a range of consumer and industrial applications using advanced photonic lasers and detectors. IQE is also working with leading global silicon chip companies and on a number of major research and innovation programmes to develop the next generation of technology which will combine the scale and maturity of the silicon industry with the advanced properties of compound semiconductors.
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•! Similarly, Haydale Ltd, is a global leader in facilitating the commercial application of graphenes and other nanomaterials. Using its own patented technology and processes, Haydale’s processes enable the development of new customised materials enhanced by graphene and other nanomaterials in a low temperature, scalable, plasma function. The technology provides a rapid and highly cost-efficient method of supplying tailored solutions to enhance applications for both raw material suppliers and product manufacturers. Companies of this calibre and global standing are actively involved in international consortia and partnerships across a wide range of technology collaborations. At the same time there is increasing activity by government to encourage and support SMEs in the sector to participate in transnational cooperation and technology projects. Despite these strong examples of leadership and innovation at the core of the advanced materials sub-sector, much of the composites and nanotechnologies work carried out by companies uses what commentators in Wales have described as ‘lower tech composites’2. Companies involved in the uptake and development of composite materials are mostly in high performance sub sectors such as aerospace and defence. Other high volume markets in Wales are marine and automotive, but whereas the marine sector is significant and has scope for expansion, by contrast, the automotive sector has tended to be slower to embrace composite materials, apart from in high-performance applications. Although specific statistics on patenting activity by the sector in Wales are not available, the evidence tends to suggest that patenting activity by Wales-based SMEs in the sector is relatively low. This is, once more, likely to be a result of the dominance of global value chains and the lack of incentive for Tier 2 and Tier 3 companies, particularly in the automotive sector in Wales, to be fully innovative. Nevertheless, anecdotal evidence suggests that Tier 2 and Tier 3 companies are capable of absorbing innovation in materials and processes suggesting that there is a continuing strong need for knowledge transfer from researchers and specialists into the advanced materials companies, on a theoretical and practical basis, to ensure international competitiveness.
1.3!Scientific research potential Advanced engineering and materials is one of the three Grand Challenge areas3 set out as the focus for the Welsh Government’s strategic agenda Science for Wales (2012). Here, the Welsh Government’s goal is ‘to build a strong and dynamic science base that supports the economic and national development of Wales’. This specific goal built on the Welsh Government’s earlier commitment to science and innovation in Wales contained within the Programme for Government (2011), including: ‘The building of strong links with our anchor companies embedding them in the Welsh economy by developing close links with our further and higher education institutions’ and, ‘Encouraging collaboration between our universities and the best universities outside Wales and the scientific knowledge and expertise of our world-leading academic groups to be made available to support innovation and job creation in Wales’. In setting out these aims and commitments, the role of science and scientific research potential related to the Grand Challenges and, therefore, the key sectors of advanced manufacturing and advanced materials in Wales, was explicit. The Welsh Government
2 Dr Anke Skrobek, Project manager, Wales Composites Centre, Swansea University 3 The other two are life sciences & health and low carbon, energy & environment.
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based this commitment on their assessment that Wales has ‘strong, world-leading university research in fields such as computational fluid dynamics; materials, particularly advanced testing methods; civil engineering; non-Newtonian fluid mechanics; printing and coating; low carbon technologies; nanotechnologies.’ This estimation of the focus and potential for scientific research in Wales was underpinned, to some extent, by the responses to a survey of 70 leading academic scientific researchers active in Welsh universities in 2014. Some 50% of the respondents indicated that, for them, ‘Advanced Materials & Design’ were their primary underpinning areas of research. Further, they indicated that within this broad field of research, Materials Characterisation, Engineering Optimisation and Multi/Nano Scale Materials were their main areas of expertise (University of South Wales, No date 1). In addition, 34% of respondents had an area of expertise relating to Optoelectronics. A technology prioritisation road mapping exercise conducted amongst leading scientific researchers, as part of the work programme development for the advanced materials and engineering National Research Network, concluded that prime candidates for a research focus in Wales based on opportunity and existing strengths capabilities would include smart, hybrid and multiple materials; intelligent systems and embedded electronics; and, system modelling and integrated design and simulation. Further, potentially attractive areas would include design and manufacture for sustainability and through-life; the development and application of advanced coatings; and energy generation, storage, management and security (Wales National Research Network, 2014). Alongside the scientific research potential of the Welsh academic research base, there is a significant focus on enabling collaborations between scientific researchers and business innovation in the key technology areas relevant to the advanced materials and nanotechnologies sector in Wales. Examples of such a focus include the following investments supported by government, academia and business: •! The Materials Advanced Characterisation Centre (MACH1) mission is ‘to support Welsh advanced manufacturing industry by the provision of high throughput technologies for materials characterisation, materials selection and analysis and to establish itself as a worldwide recognised centre’. The Centre offers a wide range of material and measurement capabilities to deliver multi-sample, high-throughput testing of advanced materials to industry (Dragon Innovation Partnership, 2014). •! SPECIFIC is an academic and industrial consortium led by Swansea University with Tata Steel, NSG Pilkington and BASF as strategic partners. At its heart is the SPECIFIC Innovation and Knowledge Centre, which is funded by the EPSRC, Innovate UK and the Welsh Government. The main area of research is functional coatings for building materials that can generate and store electricity4. •! EADS Foundation Wales is a partnership between EADS plc, the Welsh Government and Cardiff University to take forward joint research and technology projects emerging from the SME community and university sector including around aircraft composite materials and structures5. •! The Centre for Advanced Functional Materials and Devices is a joint venture between Aberystwyth and Bangor Universities and aims to be an international centre of excellence for the development, characterisation and
4 See: http://specific.eu.com 5 See: http://eadsfoundationwales.com/
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application of advanced materials and devices including organic electronics and photonics, materials in extreme conditions, devices & sensors and materials characterisation and modelling6. •! The Welsh Centre for Printing and Coating (WCPC) is a world leading research and development centre for advanced manufacture by printing. It has comprehensive printing facilities with ink and coating development capacity, which are unique in Europe. WCPC is a long established research centre within Swansea University and an integral part of the College of Engineering. It has an international reputation in fundamental and applied research into printing as a manufacturing process. WCPC supports companies across the UK and Europe7. •! The Advanced Composite Training and Development Centre, with research led by Glyndŵr University, is targeted at developing faster manufacturing and processing techniques for composite materials which will help to meet future demand for aircraft and composites in general8. •! The Swansea University Materials Research Centre is one of the UK’s leading centres for materials teaching and research. The internationally leading materials research conducted at Swansea is funded by prestigious organisations such as Rolls Royce, Airbus, The European Space Agency, and Tata Steel9.
1.4!Role of intermediary institutions In 2009, the Economy Ministerial Advisory Group (MAG) to the Welsh Government recommended that the Department for the Economy, Science and & Transport should align its activities to key sectors of the Welsh economy in order to improve the global competitiveness of Wales. Since 2009, the AM&M sector has been one of the Welsh Government’s priority sectors and has benefitted from public policy and funding efforts to achieve strategic focus, greater critical mass in investment, and better co-ordination and strategic management of supports for the sector. In order to maintain the focus and relevance of actions, for each priority sector, the Welsh Government has established industry-led private sector panels to provide Ministers with advice on opportunities and the needs of the sectors. In this way they help develop and advise government on the implementation of policies, principally through sector action plans. The strategy devised by the Advanced Materials and Manufacturing (AM&M) Sector panel included developing a skilled workforce, excellence in research and development, stimulating global trade and investment, facilitating access to finance and building capacity of indigenous manufacturing businesses. Further, members of the AM&M Sector panel were instrumental in enabling the amalgamation of the sector led networks that have been in place in Wales for almost 20 years. The Aerospace Wales Forum, the Welsh Automotive Forum and the Electronics, Software & Technology Network were merged to form the Industry Wales brand. The activities of the AM&M panel have subsequently been merged with Industry Wales (see below). Industry Wales has a board comprised of representatives from the Welsh Automotive Forum, General Dynamics, Tata Steel, Sony, Schaeffler UK Ltd, Nordam
6 See: http://www.cafmad.ac.uk/ 7See: http://www.ukplasticelectronics.com/centres/welsh-centre-for-printing-and-coating/ 8See:http://www.glyndwr.ac.uk/en/campusesandfacilities/advancedcompositetraininganddevelopmentcen tre/ 9 See: http://www.swansea.ac.uk/engineering/research/centres-and-projects/materials-research-centre/
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Europe Ltd, EBS Automation, and GE Aviation. Although Industry Wales is a wholly owned subsidiary of the Welsh Government, it has been established and is directed by industry to maximise the performance of the sector by focussing on innovation, investment, skills and the supply chain. They have set a vision of creating the conditions for Wales’ AM&M sector to become globally competitive by 2025. The approach taken by the Welsh Government in providing a framework for industry engagement and private sector action is widely praised by the AM&M sector itself. The Chair of Industry Wales, Gareth Jenkins, has commented, ‘the private public sector partnership has fundamentally altered the way in which Welsh Government interacts with the manufacturing sector. We now have an effective consultation and advice mechanism which is the envy of the rest of the UK. We still face challenging conditions in the sector, but at least Welsh Government has a deeper understanding of the sector. This can only lead to more effective support mechanisms now and in the future.’ A parallel approach of establishing a framework for engagement with the science and technology community in Wales has been adopted by the Welsh Government. Through the Science for Wales Strategy, a series of National Research Networks has been established alongside each of the priority sectors. These are academia and technology development focused intermediary organisations, led by science and technology specialists but with industry engagement at its heart. In 2014, the Advanced Engineering and Materials National Research Network was established. The Network will foster interdisciplinary research links across Wales, the UK and internationally with fundamental and applied research activity closely aligned to three key research themes: Materials and Innovative Manufacturing Processes, Advanced Sensors and Devices, and Novel Modelling Techniques. The Advanced Engineering and Materials National Research Network connects key engineering research institutions at the Universities of Swansea, Cardiff and Bangor. The National Research Network focuses on industry-inspired research with the potential for innovation and commercialisation alongside the development of globally relevant and competitive capability in Welsh research institutions and companies. Other intermediary institutions include the Welsh Composites Consortium10 established to collaborate with Welsh SMEs by sharing knowledge, skills and best practice in the use of composite materials. Other key interventions in this area include: •! Open Innovation – seven anchor companies have received an award including Tata Steel & General Dynamics enabling them to work collaboratively, primarily with smaller companies based in Wales, on commercially exploitable projects. •! EADS Foundation Wales – a not for profit research foundation with Welsh Government, EADS and several Welsh universities as major stakeholders. •! Low Carbon Research Institute – €46m has been invested to develop low carbon generation, storage, distribution and end-user technologies. •! Supply Chain Development – encouraging re-shoring of supply chains and also identifying opportunities and matching capable Welsh based suppliers (or building capability). To date supply opportunities to the value of €25m have been identified for the Welsh supply base. In addition, supplier
10 See: http://www.swansea.ac.uk/reis/archive%20content/wcc/#accept
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days have been organised with tier one manufacturers in the growing Aerospace, Automotive and Rail sectors. •! The Toyota Lean Management Centre programme – exposing companies to the Toyota business model with 2-day on-site workshops.
1.5!Developing skills for the future Access to knowledge and skills is widely regarded as one of the largest challenges faced by the sector in the short to medium term. Industry commentators and stakeholders believe that, in Wales, there are, at the current time, more job opportunities in the sector than there are qualified people available. Specific data for the skills needs of the advanced materials and nanotech sector are not available. However, in a 2014 report on skills in the advanced manufacturing sector in Wales, over 20% of companies reported that they had unfilled technical vacancies at the time and that they expect the vacancy position to continue. Industry representatives made direct representation to Welsh Ministers at the time and, partly as a consequence, support for a number of skills development and apprenticeship programmes was extended and even, in some cases, increased. These include programmes such as Skills Growth Wales and Pathways to Apprenticeships. All companies, particularly those in the Welsh Government’s priority sectors, including the AM&M sector, can access support from the Apprenticeship Programme (funded jointly by the Welsh Government and the European Social Fund). The Programme has a number of aspects including: •! The Apprenticeship Programme helps businesses across all sectors to access structured apprenticeship support through the Foundation Apprenticeship, Apprenticeship and Higher Apprenticeship stages.
•! The Young Recruits Programme is an all-Wales programme that provides financial support to employers offering high quality apprenticeships to train young apprentices through an approved Shared Apprenticeship Programme. A wage subsidy of €3,500 per annum is available for employers.
•! The Apprenticeship Matching Service is an online recruitment system for apprenticeships in Wales. The free service helps Welsh employers find suitable apprentices and aspiring apprentices in Wales. The Apprenticeship Matching Service provides employers with free advertisement of their apprenticeship vacancies. The development of skills for the AM&M sector in Wales is strongly influenced and guided by a number of Welsh Government skills policy statements and strategies including the Skills and Employment Action Plan. A 2009 plan focussed on improving skills throughout the economy and at every skill level from basic and entry skills to higher level skills. The second strategy, the 21st Century Higher Education Strategy, focuses on the higher education sector’s contribution and covers all aspects of education at the university, including an objective for Welsh universities to become international leaders in the science, technology, engineering and mathematics (STEM) subjects relevant to the AM&M sector. The skills strategies and programmes focused on the AM&M sector in Wales produce a pyramid structure of interventions beginning with broadly based information and outreach and moving up to work-based learning provision and bespoke courses including apprenticeships. The provision of Foundation and full-time degrees follow before, at the pinnacle of attainment and provision, the research-based Masters degrees and doctoral research conducted at the HEIs and in particular in specialist centres and academies, is covered. In this way, the AM&M sector is underpinned by a sound framework of skills which, at the highest level, allows skills and technology developments to merge in specialist research and innovation centres including:
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•! Advanced Composite Training and Development Centre: A partnership between Glyndŵr University, Airbus, Coleg Cambria and the Welsh Government, the centre allows Airbus employees and apprentices to develop their composite manufacturing skills11. •! Swansea University Materials and Manufacturing Academy. Backed by €11.3m (£8.6m) of EU funds, the Academy will provide training in specialist technical and management skills. This is key to the advanced engineering and materials sector (to Masters and Doctorate levels). •! Swansea University Materials Research Centre (MRC)12: The MRC has pioneered postgraduate degrees that are tailored to the needs of industry and produce top quality research. This successful approach is demonstrated by a research grant portfolio in excess of €55m. •! Welsh Composites Consortium13: Swansea University together with four partners from Welsh HE and FE Institutions (Swansea Metropolitan University, Bangor University, Pembrokeshire College and Glyndŵr University) have developed training materials in composites at a university undergraduate and postgraduate level (NVQ levels 4 and 5). •! Photonics Academy for Wales @ Bangor (PAWB)14: The Photonics Academy is an initiative of the Welsh Optoelectronics Forum aimed at using Photonics to inspire students towards STEM related studies, interests and careers.
1.6!Major investment projects The Compound Semiconductor Centre (CSC) is a joint venture between IQE plc, the world’s leading supplier of advanced compound semiconductor wafer products, and Cardiff University, Wales’s leading research university. Compound semiconductors are a Key Enabling Technology (KET) for the economic growth drivers identified in the EC’s Horizon 2020 strategy. Compound semiconductors drive devices and technologies, including smartphones, tablets, satellite communications and GPS. The launch of the Compound Semiconductor Centre, in August 2015, is the latest stage in a technology investment strategy that aims to build, in Wales, a world class cluster in the development and use of compound semiconductors bringing together world class researchers with globally competitive companies. The overall vision is to bridge across a number of technology readiness levels (TRLs) by bringing together investors from the EU, national and regional levels with commercially invested funds from industry. The vision and strategy is described in Figure 1.
11See: http://www.glyndwr.ac.uk/en/campusesandfacilities/advancedcompositetraininganddevelopmentcentre/ 12 See: http://www.swansea.ac.uk/engineering/research/centres-and-projects/materials-research-centre/ 13 See: http://www.swansea.ac.uk/reis/archive%20content/wcc/#accept 14 See: https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=38&ved=0ahUKEwjGzv- J3L_JAhWCaRQKHWxjCTk4HhAWCD4wBw&url=http%3A%2F%2Fwww.bangor.ac.uk%2Feng%2FDocum ents%2FCAFMAD.Cardiff_poster_2Dec.ppt&usg=AFQjCNG2h5B4UDiKWfC5Xok7FSMfJ7gTXQ&cad=rja
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Figure 1 The Compound Semiconductor Centre: strategic vision
Source: IQE, No date. In this diagram, the CSC (described here with the earlier proposed acronym CSF), is clearly shown as stage two of a four-stage strategy to gradually ‘scale up’ activities from an initial research base to a large scale commercialisation represented as Europe’s 5th semiconductor cluster and the world’s 1st compound semi-conductor cluster. The extent of the ambition of this vision is well understood and recognised by the partners and the four-stage strategy is carefully designed to enable confidence, skills and investment capacity to be gradually built up over a number of years of activity. At the early stages, the close cooperation over 20 years between the research laboratories at Cardiff University and Cardiff-based IQE plc has been critical. The first element in the strategy was delivered in early 2015 with the formation of the Institute for Compound Semiconductors (ICS) as an Institute at Cardiff University building on the long-standing research activities and collaborations between the University and IQE plc. The Institute, targeted at TRLs 1-3, was launched in May 2015 with the appointment of Professor Diana Huffaker, formerly at the University of California, Los Angeles (UCLA), as Chair in Advanced Engineering and Materials. This appointment was supported by Welsh Government's €70m Sêr Cymru programme. Professor Huffaker’s role is to build on existing strengths at Cardiff University in expanding areas of optoelectronics, semiconductor devices and materials and to establish a world-class research institute. Professor Huffaker describes her role as: ‘focussing on both fundamental science and device development. The lab will explore novel growth methods and material combinations that industry cannot necessarily accommodate.’15 The vision for the compound semiconductor cluster in Wales requires the bridging of TRLs 4-6 allowing the excellent research and development activities to move on to the fabrication and testing of technologies in realistic environments. The Compound Semiconductor Centre therefore builds on the research undertaken at Cardiff University's Institute for Compound Semiconductor to develop innovative new materials technologies that will enable a wide range of new and emerging applications.
15 See: http://www.cardiff.ac.uk/news/view/103717-cardiff-appoints-leading-us-compound- semiconductor-expert-with-welsh-government-support
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The partnership between Cardiff University and IQE plc is critical to this next stage of the strategy too, focused on generating modern facilities and highly skilled staff to support innovation by delivering services including: •! advanced device fabrication and process development; •! prototyping and small scale pilot production; •! specialised training, outreach and networking. IQE is a specialist in epitaxy, a process for making compound semiconductor wafers by precise deposition of different atomic layers of semiconductor elements. The company set up its first MOCVD-based wafer manufacturing operation in Cardiff in 1988. (IQE is also an industry partner in the recently announced American Institute for Manufacturing Integrated Photonics16. In July 2015, a €24m UK Research Partnership Investment Fund (UKRPIF) award for the CSC was announced alongside a €16m Welsh Government funding package and assets and IP valued at €16m being contributed by IQE. The aim is that the CSC will position Wales (and Cardiff) as both the UK and European leader in compound semiconductors, bringing major benefits to both partners. Cardiff University gains an effective route to commercialise its compound semiconductor research and helping it attract significant corporate and R&D funding (including Horizon 2020 awards), while IQE will be enabled to take technologies developed through CSC directly into large scale mass production. The aim at this stage of the CSC is to provide a complete value chain from high-end, World-class research and development through product and process innovation to high value, large-scale manufacturing with the potential to become one of the leading clusters in Europe and, so far, the first compound semiconductor cluster globally. Four significant clusters based around silicon technologies already exist in Europe, but Wales’s CSC will be the first centre to build on the potential of CS technology. This cluster would represent a central base of operations for the UK (and wider EU) efforts to reclaim high value manufacturing from competitors in East Asia. The creation of a cluster is estimated to have the potential to create 5,000 new jobs in Wales supplying a global supply chain of high value products and services. CSC will be Europe's first prototyping facility allowing businesses and academics to demonstrate new technologies based on compound semiconductor materials that will be production ready – allowing rapid routes to market for entrepreneurs and technology leaders. It will also facilitate a wide range of training and skills development to support a growing infrastructure around compound semiconductor based technologies. The Centre will also facilitate a wide range of training and skills development to support a growing infrastructure around compound semiconductor based technologies.
1.7!International cooperation There is little evidence of systematic or strategic cooperation between Wales and other European regions with regard to the implementation of integrated initiatives as a part of Wales’ strategic agenda for the advanced manufacturing sector. Cooperation, notably on research and development programmes, may be observed at the organisational level, typically involving Welsh companies, universities and research centres, but there is a general lack of focus and capacity for the regional authorities to implement international cooperation initiatives.
16 See: http://www.aimphotonics.com/
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As is conventional, researchers at Welsh universities and Welsh research performing companies active in the advanced manufacturing sector in general, most commonly participate in cooperative R&D projects through the EU’s Framework programmes up to, and including, Horizon 2020. For example, researchers at Welsh universities captured circa €25m of FP7 funding for projects relating to nanotechnologies, advanced manufacturing, advanced materials, smart systems and robotics. There were 22 Welsh university participations in FP7 in Nanosciences, Nanotechnologies, Materials and New Production Technologies. Additional funding for projects in these areas was drawn from the Structural Funds. Further a number of key AM&M companies were serial participants in FP7 and are currently involved in Horizon 2020 projects with partners from across the EU. These companies include, among others, Tata Steel, Airbus Industries, IQE, EADS and so on. In many instances, the accumulated effect of participation by researchers in multiple FP7 and Horizon 2020 projects is to create a critical mass of international cooperation at the institutional level. There are a number of relevant examples in Wales within the AM&M sector. For example: •! The Manufacturing and Engineering Centre (MEC) at Cardiff University’s School of Engineering is a partner in a number of projects funded under the Nanosciences, Nanotechnologies, Materials & New Production Technologies theme (European and External Affairs Committee (no date). In addition, the MEC has a strong portfolio of projects funded by the EC, the UK Research Councils and the Welsh Government. For instance, building on its role in the European Network of Excellence in Multi-Material Micro Manufacture, Cardiff University formed part of the partnership that secured EU funding for European Infrastructure in micro and nano manufacturing (EUMINAfab)17. EUMINAfab was the first pan- European Research Infrastructure for micro and nano fabrication of new, novel and emerging functional materials. EUMINAfab provided access to a portfolio of state-of-the-art technologies for structuring and characterisation of a multitude of materials at the micro nano scale. With 10 European partners from eight member states, it responded to challenges from global competitors. •! Similarly, Bangor University formed part of the FP7 ICT Alpha consortium18 with advanced materials applications at its heart. ICT ALPHA used optical network infrastructure to support a heterogeneous environment of wired and wireless technologies. The project pursued experimental validations of close-to-maturity technologies in laboratory tests and field trials by intensively exploiting the three project testbeds. The project also included long-term research activities to improve the existing technologies. The ICT Alpha consortium was made up of eight academic and research partners in collaboration with three SMEs, three telecomm operators and three system vendors. •! Finally, Swansea University was one of eleven partners from industry and academia that partnered in the MultiHy research collaboration. The aim of this collaboration was to develop industrially-relevant computational models to assist in the evaluation of the susceptibility of complex materials to hydrogen embrittlement under realistic service conditions. EADS, Thyssen Krupp and BMW were among the industrial partners.
17See: http://www.helmholtz.de/forschung/eu_projekte/kapazitaeten/forschungsinfrastrukturen/euminafab/ 18 See: http://www.ict-alpha.eu/About-ICT-ALPHA/Objectives
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1.8!Policy support and delivery mechanisms Advanced manufacturing – and specifically advanced materials – is officially recognised in numerous policy documents as a priority. Existing policy support and delivery mechanisms and initiatives in Wales reveal a comprehensive, relevant and multi-tiered structure of policy, support and priorities assigned to the sector by Welsh Ministers, their government departments, a structure of advisory boards or councils at a science and innovation level. These are further underpinned by specific industry-led advisory panels for key sectors of business economy and research capacity in Wales. The Welsh Government and, in respect of European Programmes, the Wales European Funding Office (WEFO) oversee the development of policy and the implementation of support mechanisms across all parts of the Welsh economy. In its science policy for Wales, Science for Wales (2010), key priority sectors have been supported with National Research Networks, funded by the government, industry and academia, to build research capability that is both world class and closely linked to commercialisation opportunities. The Networks are academia and technology development focused intermediaries led by science and technology specialists but with industry engagement at its heart. (The appointment of Professor Diana Huffaker, formerly at UCLA, as Chair in Advanced Engineering and Materials at Cardiff University was seen as a key part of the development of the appropriate quality of research and global reputation for the sector). The implementation and direction of Science for Wales is overseen by an advisory council, the Science Advisory Council for Wales (SACW) that reports directly to the Chief Scientific Adviser rather than to Ministers and has no statutory responsibilities. The purpose of the Council is to bring a range of expertise in support of the adviser. SACW has members with both commercial and academic knowledge in a range of subjects. Science for Wales sits alongside Wales’ Smart Specialisation strategy that guides innovation in the Welsh policy and delivery domain across the whole economy including the AM&M sector. Therefore, the primary strategic statement for innovation is Innovation Wales (2013). This sets out the Welsh Government’s approach to innovation in business, government and society. In particular, and in parallel with the Science Strategy, it identifies four grand challenge areas, based on analysis of existing strengths and strategic opportunities. These were developed following an extensive process of consultation and inform the Welsh Government’s approach to the EC’s Smart Specialisation agenda and to the priority sectors for the economy: •! Advanced Engineering and Materials; •! Life Sciences and Health; •! Low Carbon Energy and Environment; and •! ICT and the Digital Economy. These grand challenges are meant to be broader than sectors or science areas but are coherent alongside priority sectors and represent the areas where the Welsh Government intends to target investments in the coming years. Innovation Wales is overseen and monitored by an industry led advisory board, the Innovation Advisory Council for Wales (IACW). The current system of innovation support prioritises areas such as support for R&D and technology adoption, knowledge exploitation and knowledge transfer. The latter policy area has been particularly strong, with funding to support both university and further education college links to business. The focus on the key priorities sectors is arguably less visible at the implementation level than its transparency at the policy
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and strategy level. However, the evidence from the delivery of programmes suggests that the mere adoption of the AM&M sector, amongst others, as a priority area has led to an inbuilt balance in favour of these sectors that is revealed at the point of delivery. It is important to note the influence that the two major European-funded programmes for West Wales and the Valleys and East Wales (2014-2020), have for the current policy mix and the overall priorities for economic development in Wales, including innovation, technology transfer and SME development. The supports on offer under these programmes address the Science for Wales and Innovation requirements, and provide an integrated suite of support for business, higher and further education, and individual innovators in Wales, including Smart Innovation, SMART Cymru and SMART Expertise. Since 2009, the advanced materials and manufacturing sector in Wales has been regarded as a priority sector in regional strategic documents covering science, innovation and international competitiveness policies. The sector has therefore benefitted from public policy and funding efforts to achieve strategic focus, critical investment, and co-ordination and strategic management of supports for the sector. In order to maintain the focus and relevance of actions, for each priority sector, the Welsh Government has also established industry-led advisory panels to provide Ministers with advice on opportunities and the needs of the sectors. The outcome of the advisory panel focus is expected to be more comprehensive policies, strategies and supports that help develop the sector and opportunities for new investments. The Advanced Materials and Manufacturing (AM&M) sector panel were also key players in encouraging the amalgamation of the sector led networks (Aerospace Wales Forum, Welsh Automotive Forum and the Electronics, Software & Technology Network) to form Industry Wales. Industry Wales is a wholly owned subsidiary of the Welsh Government and has been established to maximise the performance of the sector by focussing on innovation, investment, skills and the supply chain. They have set a vision of creating the conditions for Wales’ AM&M sector to become globally competitive by 2025. The approach taken by the Welsh Government in providing a framework for industry engagement and private sector action is widely praised by the AM&M sector itself. The strategy devised by the AM&M Sector panel targeting five key priorities: •! Globalisation – increasing trade, export and inward investment opportunities from existing and emerging markets; •! Innovation and Technology – encouraging and supporting research and development in innovative products and processes to increase and embed 'intellectual capital' in Wales; •! Employment – ‘future proofing’ education, skills, training and leadership to meet the demands of the 21st century manufacturing workplace; •! Finance for Growth – syndicating risk-sharing financial packages through a combination of public and private sector funding mechanisms; •! Building Capacity – targeting investment in strategic infrastructure and broad-access initiatives that together create a sustainable business environment here, in which to analyse its current performance and progress to meet its vision. In parallel, the research base in Wales has organised itself into a priority sector structure to allow it to better reflect business sectors and commercial opportunities.
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Accordingly, the Wales Higher Education Bureau (WHEB)19 Advanced Materials & Manufacturing Group was set up to represent the research strengths in Wales within this priority sector and to engage strategically with European policy and funding opportunities. The group comprises of researchers spanning six Welsh universities – Cardiff University, Bangor University, Cardiff Metropolitan University, Swansea University, The University of South Wales and University of Wales Trinity Saint David. The research expertise represented in the group includes: Nanotechnologies; Photonics; Advanced Manufacturing & Sustainable Process Industries; Advanced Materials; Smart Systems and Robotics; Product Design.
1.9!Good practice case A number of good practice cases applying to the promotion, development and policy with regard to the AM&M sector in Wales are highlighted below. The cases have been selected on the basis that they represent successful examples of cooperation across business sectors relevant to the AM&M sectors, notably advanced materials and nanotechnologies (Industry Wales); successful and sustainable cooperation within an AM&M business sector with strong SME engagement (ESTnet); and highly focussed research and innovation collaborations in advanced materials and nanotechnologies bringing together academic research with industrial exploitation and innovation (SPECIFIC). A number of similar examples could have been selected but are limited to three to illustrate the key underlying features of policy, development and support for the sector within Wales. Industry Wales Industry Wales is a wholly owned subsidiary of the Welsh Government established, and directed by industrial members with the aim of maximising the performance of the AM&M sector by focussing on innovation, investment, skills and the supply chain. Industry Wales brings together three leading Welsh industry forums – ESTnet, the specialist network for electronics, software and technology in Wales, Aerospace Wales and The Welsh Automotive Forum. The three constituent forums have 400 member companies employing, between them, approximately 45,000 people. The board of Industry Wales have set a vision of creating the conditions for Wales’ AM&M sector to become globally competitive by 2025. Industry Wales provides a single voice for technology and manufacturing businesses in three key business areas – Aerospace, Automotive and Electronics & Software (EST) to influence government policy and shape delivery. It engages with new members and works to extend the scope and influence of Welsh businesses by integrating with UK and European projects. Industry Wales globally promotes Welsh technology, innovation and manufacturing and Wales in general as a place to invest and as a world class supply chain partner. In achieving this, Industry Wales builds on and works alongside three sector panels, government departments and organisations to integrate and align initiatives to help ensure maximum benefit for members, focussing on four key areas: innovation, investment, skills and supply chain. Industry Wales is directed by an independent board comprised of representatives from the Welsh Automotive Forum, General Dynamics, Tata Steel, Sony, Schaeffler UK Ltd, Nordam Europe Ltd, EBS Automation, and GE Aviation.
19 See: http://www.wheb.ac.uk/en/about-wheb/advanced-materials-and-manufacturing/
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One of the key innovations regarding Industry Wales is that it came about, because industry leaders in Wales recognised that independent industry forums focused on specific business sectors – aerospace, automotive and electronics and software – were consistent with a traditional view of their activities (supply chains, end-user, Original Equipment Manufacturer focused etc.), but were not the most appropriate focus. This was particularly evident when their complementary technologies, convergent technologies and need for high level research and skills were taken into account. Consequently, Industry Wales was created as a means of maintaining a horizontal, or cross-business, sector focus allowing the industry, particularly concerned with AM&M to collaborate and achieve a critical mass so that its voice can be heard clearly and forcefully at a policy, programme, research and skills level. Industry Wales has made a significant impact in respect of the coherence and clarity of the sectors’ engagement with government and other bodies with interests in respect of the AM&M sector. This has also allowed the independent sector forums that make up Industry Wales to maintain their focus on delivering benefits and results for their individual memberships while still having a strong input to the ‘voice’ of the sector as a whole in Wales. One of the main lessons that may be observed from the case of Industry Wales is that the partnership and collaborations across the sectors and with government can be productive and impactful for all concerned. However, the independence of each partner in the collaborations and in the dialogues is important so that ‘group think’ is avoided. The mediating role of Industry Wales has proved critical in this regard. Industry Wales is a potentially transferable good practice case. ESTnet Created in 2011, the ESTnet is a network of technology organisations, whose members design, develop, manufacture or integrate electronic and software technologies. Wales has, within the electronic and software technologies industry, organisations who design, develop, manufacture and integrate some of the world’s most advanced technologies. This supports the employment of about 24,000 people in Wales, many in high value added jobs. The combined turnover of the electronics and software technologies industry in Wales is over €9b. Many of the companies are relatively small – with turnovers of less than €7m per annum – but, particularly in the software technologies sector, tend to be young, dynamic companies. Welsh companies, university research groups, users and support organisations are the main partners of the ESTnet. The mission of ESTnet is for its business members to encourage commercial collaboration, supply chain development and knowledge transfer and management. Skills development is a key issue for the sector and therefore ESTnet assists its members to identify and meet current and future skills requirements particularly to allow them to keep pace with technology developments. The ESTnet supports its members by helping them grow their business, guided by a five ‘pillar’ plan. The ESTnet aims to: •! Create business opportunities through a programme of events and networking opportunities; •! Develop the skills of the industry by providing data for skills planning and partnerships with academic institutions in Wales; •! Promote opportunities for innovation and research and development by working with the UK level Knowledge Transfer Network (KTN), Innovate UK and the Welsh Government;
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•! Promote opportunities for finance and investment; •! Provide strategic insight and influence key stakeholders and raise the profile of the industry through showcase events. ESTnet acts as the voice of the industry and champions the importance of the electronic and software technologies industry in Wales with key stakeholders. ESTnet is governed by a ten-person board of directors, all of whom are senior figures within their own companies, operating at the leading edge of the sector and with a significant presence in Wales. This case is clearly not unique to Wales and is almost certainly transferable. The focus on delivering benefits to network members ahead of acting as a representational body to government adds an element of novelty both within the Welsh context and more generally across the sector. The main results recorded so far relate to the impact that ESTnet has had on building an awareness within the sector of each other’s presence, activities and development opportunities in Wales. An annual review of members conducted by ESTnet revealed the following results: •! 71% of ESTnet members have gained new business partnerships as a result of their membership; •! 80% of ESTnet members have made new business contacts as a result of their membership; •! 7,000 young people attracted to the ESTnet Next Generation stand at Skills Cymru. ESTnet members are positive regarding the impact that their membership has achieved, for example, ‘it has allowed us to network to identify, build relationships, share knowledge and collaborate with other businesses in our sector, but also to form an identifiable face for our industry, to engage with government, education and other sectors with whom we need to work to create economic outputs, and to help direct their focus to what is needed.’(ESTnet, 2015) Based on the experience of the ESTnet, the main lessons that may be learned from this case are that, first, it is important that the industry leaders in the country are fully engaged and supportive of the network activities and are willing to demonstrate this through their membership and participation in the governance structures; and second, that the network’s activities cannot solely be to represent the sector to government, but that it has to deliver tangible benefits to members. The leadership of the ESTnet recognise that its sustainability can only be secured if the network is able to maintain the delivery of benefits to its members. This factor is almost its prime standing as a piece of good practice. ESTnet is potentially a transferable good practice case. SPECIFIC The Sustainable Product Engineering Centre for Innovative Functional Industrial Coatings (SPECIFIC) is funded by the UK’s Engineering and Physical Sciences Research Council, Innovate UK and the Welsh Government. SPECIFIC’s main aim is to develop functional coated steel and glass products for roofs and walls that generate, store and release renewable energy – transforming buildings into power stations and delivering significant environmental and economic benefits. SPECIFIC is hosted by Swansea University and is an academic and industrial consortium led by Swansea University with Tata Steel, NSG Pilkington and BASF as strategic partners. These three industry partners are, in themselves, leading global
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value chain companies with leading edge investments in advanced materials technologies and production sites. They also represent SPECIFIC’s core clients and have committed to invest over €1m each in SPECIFIC. The market for SPECIFIC’s services and research is global as demonstrated by the active collaboration of a number of global companies with high intensity technology and research capabilities. By working with industry partners the Centre is also provided with access to global supply chains using advanced materials and nanotechnology. This makes collaborations with SPECIFIC attractive to small companies who have intellectual property that they are able to more easily introduce to the strategically important collaboration partners of SPECIFIC. SPECIFIC is a capital project that has resulted in a unique site in the UK and has attracted key researchers and businesses that wish to work with the Centre. SPECIFIC currently works with two professors from Imperial College, although most of the work is with businesses, and the site will be important for Swansea in terms of future research impact results for the University. SPECIFIC was developed alongside another capital investment-based project that increased advanced materials research capacity at Swansea University. The complementary project, SUPER, is a Welsh Government funded programme whose objectives are to develop the capabilities of SPECIFIC by upscaling pilot production lines and to deliver advanced materials manufacturing for the next generation of coated functional products. SUPER has allowed the creation of the Pilot Manufacturing Resource Centre (PMRC) that provides high quality R&D space to be located directly adjacent to reel-to-reel (R2R) pilot manufacturing capabilities, thereby providing world class measurement science at the point of manufacturing development. In its first two years SPECIFIC developed a full pilot manufacturing facility to enable the manufacture of one square meter panels of functional coated materials such as glass, steel, aluminum, plasterboard or wood, which can be applied to buildings at demonstration scale. SUPER has allowed a number of engagements with SMEs in Wales and these have led to new business opportunities as well as reinforcing the importance of R&D within these companies. For example, a collaborative research project, fully funded by Cogent, has developed and demonstrated a new coating material for high tension electrical steels. This new material set eliminates chrome (reducing toxicity) and improves electrical performance. The pilot coating facilities and PMRC laboratories were used extensively in the developments and this has helped to support ongoing engagement with business and income generation. Ten jobs have been created to date as a direct result but, more importantly, managers expect to generate 30 jobs in the next two to three years. The pilot line installation and the new PMRC facilities provided by SUPER has allowed significant additional public funding to be secured, representing research income to Swansea University of circa €5m within the timescales of the project. Professor David Worsley, the SPECIFIC Research Director and Sêr Cymru Joint Chair, believes that an additional positive outcome is the increased recognition of technology transfer in the advanced materials sector as a worthwhile activity, commenting: ‘Our scientists have traditionally been very ‘scientific’ in their thinking of materials research, with even those scientists who are used to working with large companies not fully appreciating the benefits of technology transfer, as they do now. Getting university scientists to work with SMEs has been an eye opener and a very positive experience, not only for the scientist, but also for
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the Centre and the University. They now appreciate the dynamism of SMEs and this allows us to work with the whole supply chain rather than just with the prime mover.’ A key lesson from this case is that Welsh Government intervention has been necessary in the first instance to allow the University to build capacity and has provided its partners with the foundation for work on a range of technologies relevant to many more businesses. Professor Worsley believes that SPECIFIC is now critical to the overall strategy of the University in terms of knowledge transfer activity and, going forward, the Centre will look to move towards the Fraunhofer model and aim for a position of self- sustainability. ‘Universities such as Swansea need these types of programmes to elevate their research and provide support to regional businesses. This in turn allows us to build local supply chain, thus materially affecting the region economically.’
1.10!Leveraging the existing potential Based on the analysis and description of the advanced materials sector in Wales a number of challenges and future opportunities are evident. These are described briefly below: •! Challenge 1: The global value chain makes the sector in Wales potentially vulnerable Most of the companies active in the AM&M sector in Wales operate within global supply chains. The larger companies, most typically, Tier 1 companies, while SMEs, which form the major part of the sector in Wales, are usually Tiers 2 and 3. This characterisation is notably the case in the advanced materials and nanotechnology sub sector, where the majority of companies in the sector in Wales can best be described as concerned with process rather than product innovation because of their position in their global value chains. In addition, much of the composites and nanotechnologies work carried out by companies use ‘lower tech composites’. The global value chain position of the sector inevitably reduces the innovation activity of a large number of firms. They have little incentive to innovate outside of the needs of those companies occupying the Tiers above them in the supply chain. While there is some evidence that the same limitation and vulnerability affects the development of higher value skills and specialist technology capabilities, Tier 2 and 3 companies in Wales have proven to be capable of working with university research centres to take advantage of knowledge transfers and knowledge applications. As a region and country with open borders to a much larger, national and EU, economy, companies in the advanced materials sector in Wales risk the leakage of skills and technologies to other external parts of the value chain. This inevitably increases further their vulnerability and the risks associated with investments in their technology base, innovation and skills. •! Challenge 2: Weakness in capacity of SMEs to invest in leading edge technologies, advanced skills and access to global marketplace The SME base in Wales, particularly in the AM&M sector, demonstrate a long standing weakness in their capacity and capability to make the scale and type of investments necessary to effectively acquire and apply leading edge technologies and to invest in new or upgraded advanced skills. This weakness arises from an economic history where the most significant industrial employment and investment was into heavy industry including steel, coal and chemicals. The SME base, as a result, was for many decades undervalued and underinvested. Rebuilding the technology, innovation and skills base of the Welsh
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economy has been a difficult process and remains, in many respects, an unfinished endeavour. A key weakness that continues to be exhibited is the tendency of Welsh SMEs and their owner/managers to be relatively risk averse as far as investment plans are concerned, while also seeking early exits from their businesses when they reach a scale where merging with or being acquired by competitors or collaborators present themselves as opportunities. The resulting need to continually ‘restock’ the economy with new, early stage SMEs has made the SME base as a whole less secure than in some other regions and countries of the UK and Europe. Commentators often draw a sharp contrast between the SME base in Wales and the German ‘Mittelstand’ model. Welsh Government policies and investment programmes, including the EU Structural Fund programmes, have been targeted at this challenge area to a significant extent for many years with only limited effect. Within the AM&M sector in Wales, the development of business sector forums including the Automotive and Aerospace forums is an indication that some traction is being achieved in building stronger collaborations and a sense of ‘joint endeavour’ between larger Tier 1 companies and their SME counterparts in Wales. •! Challenge 3: Skills shortages in high level technical skills in the materials and nanotechnology sub sector Industry sector leaders report that, with increasing employment in the advanced manufacturing sector generally, demand outstrips supply in Wales. This is particularly the case with regard to the development and application of high level technical skills in the materials and nanotechnology sub sector. The same appears to be the case in respect of relevant R&D skills. The long term health and sustainability of the advanced manufacturing sector in Wales relies, to a considerable degree, on the availability of a highly skilled and motivated employee base. The evidence from the example of the major investment being made in support of the Compound Semiconductor Centre and the bridging of the Technology Readiness levels 4-6 and above, indicates that this challenge is recognised and steps are being put into place whereby this challenge can be met in the sector. Alongside these challenges, a number of opportunities for future orientation of the AM&M sector are evident: •! Opportunity 1: Further capitalise on the strength and global value chains of ‘anchor’ companies The advanced manufacturing sector in Wales is fortunate in that a significant number of leading companies with a base in the country have strong roots in Wales and strong links into their global value chains. Companies such as Sony, Airbus, GE Aviation, BAE Systems, Nordam, British Airways, Tata Steel, Sharp, IQE, Qioptic, EADS, Toyota and NSG Pilkington are key players in the Welsh economy in general and the AM&M sector in particular. The Welsh Government has recognised that engaging these companies to ‘anchor’ their investments and skills into the Welsh sector is vital. Accordingly, a structure of industry sector Ministerial Advisory Panels, National Research Networks and business sector forums relating to the Welsh AM&M sector have been established as part of the policy landscape to achieve this anchoring. This is also expected to more easily leverage the knowledge, skills and networks available from these companies into the sector and into collaborations with Welsh University researchers and SMEs in the local supply chains. There remains a continuing need and opportunity to further capitalise on the strengths of these anchor companies and to build even stronger ‘clusters’ of activity around specific niches in leading edge technology and skills that are relevant to the anchors and their value chains.
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•! Opportunity 2: Maintain a coherent focus on the sector through science, innovation and sector policies, programmes and supports The AM&M sector in Wales is well recognised as a priority across a number of policy areas and support for the economy. However, it is important that this is not only maintained, but is also refreshed as appropriate. Here, three areas of activity would lend themselves as priorities. First, the political consensus that has gradually emerged around the strategic focus on science, innovation and key priority sectors such as the AM&M sector needs to withstand political change and challenges. Wales is a relatively young devolved administration subject to inevitable political and institutional shifts encountered as the still new devolved landscape continues to take shape. In this respect the involvement of industry leaders and key businesses in advisory and leadership roles is critical. Second, while the focus on and leverage of the large anchor companies is appropriate and necessary, the long term health of the sector will come from a strong, dynamic SME base. Here, as the challenges set out above indicate, the opportunity to build up strong clusters around niche areas needs to be taken and extended further from the small number of areas so far described. Third, while Welsh participation in FP7 was, in general, behind that of comparator countries and regions, the focus on the AM&M sector was rewarded with some strong participation. The opportunity to further increase and leverage participation of Welsh companies and researchers in the national and EU research programmes, notably Horizon 2020, is immediate and urgent. •! Opportunity 3: Extend and cement Welsh sector forums and networks into international forums and networks The Welsh AM&M sector is characterised by a series of vibrant, industry led networks and forums that contribute to policy, business and supply chain developments and to science and research activities. The opportunity exists for this pattern of collaborations to be further extended into national (UK) and EU level networks. The aim here could be to maximise exposure of a strong and confident Welsh ‘voice’ for the sector and technologies. This could be targeted at UK national and EU forums and platforms where research and implementation excellence can be demonstrated and the opportunities can be maximised for making further, sustainable investments and innovation in the sector in Wales.
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2.!Regional Innovation Performance Trends, Governance and Instruments
2.1!Recent trends in innovation performance and identified challenges Wales has consistently lagged behind the UK and Europe according to many key economic and innovation indicators. The Welsh economic performance, for example, is comparatively weak as evidenced by GDP per capita with Wales 16.2% below the EU28 average in 2013. Importantly, performance in 2012 to 2013 suggests the gap is widening – with GDP per capita in Wales decreasing by 1.3% while it increased in the EU28 by 0.4%. This partly explains the weak innovation performance relative to the EU28 as outlined in Figure 2. However, it should be stated that some indicators, such as the unemployment rate, compares well with less than 7% unemployed in 2014 compared to more than 10% on average across the EU28. Figure 2 Innovation performance indicators for Wales relative to EU28 average (2011)
Higher!education!R&D!expenditure 0.0%
Business!R&D!expenditure "51.2%
Patents!per!mln!population "59.4%
Government!R&D!expenditure "76.0%
Tertiary!education "6.1%
R&D!personnel!and!researchers "31%
"100%"90% "80% "70% "60% "50% "40% "30% "20% "10% 0%
Source: Department for Business, Innovation and Skills, 2015. Based on the indicators described in Figure 2 above, the most positive indicator in the innovation activity in the region is its investment in higher and further education. This is reflected in the Welsh Government’s commitment to this area, resulting in a greater focus on knowledge transfer and the larger numbers of students attending these institutions. This is an important investment, because Wales (among a small number of UK regions) does not have any nationally or regionally funded government research institutions within the region. This is reflected in Figure 2 with expenditure by government on R&D at more than three quarters below the EU28 average. This lack of investment by the UK government means that spin-outs from these institutions cannot occur. Similarly clusters of knowledge based innovation services are also unable to gain a foothold in Wales. These factors affect government expenditure directly and have an indirect detrimental effect on the statistics of business expenditure on R&D in Wales (BERD is 51% below EU28 average). Clearly, however, the relative lack of government R&D expenditure is not the only factor at work. The stock of technologically based SMEs in Wales is also generally lacking, with a lower new firm formation rate and patenting activity than most other UK regions (patenting activity was also 59.4% below EU28 average). This is a picture that has long been recognised by economic development commentators. This work concluded that ‘the only way to improve the prosperity of Wales in the immediate
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future was to improve the performance of our indigenous businesses, ensuring that they become more competitive, innovative and entrepreneurial’. More recently, other commentators have also recognised the seriousness of this imbalance. Huggins et al (2008) suggest that: ‘Unless the economy does convert to one based more on high value activity and knowledge based sectors, it is likely to become an increasingly detached and irrelevant component of the global economy’. On other measures, however, it would appear that the innovation system in Wales does function quite well. For example, Welsh SMEs interact with other SMEs and universities at least as much and more than in comparable UK and EU regions and other surveys show that SMEs in Wales are as innovative as SMEs elsewhere. The UK Innovation Survey 2011 (see Figure 3) shows a high level of innovation among Welsh enterprises compared to other UK regions. Some 41% of Welsh enterprises were innovation active which is the third highest of the 12 UK regions; while Wales also had most enterprises with broader innovators (43%) of all UK regions. Figure 3 Engagement in innovation activity relative to UK regions (2011)
50% 1 1 45% 2 3 40% 4 3 35% 4 43% 6 5 30% 41% 6 25% 33% 7 20% 23% 8 15% 9 10% 10 5% 11 0% 12 Innovation!active Broader!innovator Wider!innovator Either!product!OR! process!innovator
Proportion!of!Welsh!enterprises Rank!(of!12!UK!regions)
Source: Department for Business, Innovation and Skills, 2012; and Eurostat, no date. Given the analysis of macroeconomic and regional innovation performance described above, Wales faces a number of key challenges in the coming years. Below we consider just three of these challenges but they are by no means the only challenges that the region faces and they will not be met quickly or easily. In fact, there is considerable debate amongst politicians, policy makers, business leaders and commentators as to the policy required to move Wales out of a period of decline, despite the overall economic growth and the investment of EU Structural Funds over many years. •! Challenge 1: Solving the long-term macro-level structural deficiency in the economy For over 30 years, the Welsh economy has underperformed and has continued to fall back against both UK and EU measures of regional prosperity including the lowest average annual growth in GVA per head over the period 1989 to 2013 of any UK region. Major structural adjustments in the UK and EU economies in the 1980s saw the heavy industrial component of the Welsh economy decline and employment in services, particularly relatively poorly paid public services and back office functions, replace them.
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Although manufacturing productivity improved because of foreign direct investment, a period of significant retrenchment by the foreign investors began around 2000 with Welsh SMEs losing the leadership of major multinational investors in supply chain practices, investments in technology and innovation. This weak overall economic performance is indicative of serious structural deficiencies in the Welsh economy with too few innovative and R&D performing SMEs and a history of being involved only at the low value end of key growth sectors such as electronics, automotive and financial and business services. However, a few sectors of potential strength do stand out including Life Sciences and Health, Low Carbon Energy and Environment, Advanced Engineering and Materials, ICT and the Digital Economy. These areas identified in Innovation Wales, the region’s primary innovation strategy document point the way to a potentially more ‘smart’ economic and innovation policy. •! Challenge 2: Achieving greater balance in the R&D performance of the region Out of the three components of R&D expenditure commonly used as a measure of innovation performance, Wales matches the EU28 average in only one – expenditure on R&D by its higher education sector. In many regions, driving forward this category of expenditure can be a major challenge whereas in Wales investment in, and support for, strong research based higher education institutions is a long standing policy priority. This is particularly important because of the lack of one of the alternative drivers of R&D expenditure, namely government research institutions. Wales has no such institutions and therefore misses out on spin-offs and knowledge based cluster developments that typically arise as a result of government R&D activity. Welsh SMEs appear strong at interacting with other SMEs and universities and are incremental innovators rather than radical innovators. There is the potential opportunity for more ‘open innovation’ forms and patterns to emerge that will allow the R&D performance to be more balanced. •! Challenge 3: Successfully specialising in high value activities and knowledge based sectors Despite their innovation efforts and R&D investments the Welsh SME base has struggled to make a significant indent into the loss of major multinationals from the economy in the early years of the decade. With too few innovative and R&D performing SMEs and a history of being involved only at the low-value end of key growth sectors such as electronics, automotive and financial and business services, the only feasible way forward for the economy and its innovation performance is to specialise in high value activities and knowledge based sectors. Fortunately, the region has an innovation landscape where the universities are relatively strong in R&D expenditure and where a number of elements of the system, including access to finance, have been put in place. In addition, a few sectors of potential strength do exist including aerospace, opto-electronics and bio-sciences. By focussing public resources and support including financial and clustering support in a few potentially competitive areas, there is every prospect of boosting innovation performance leading to greater economic growth and prosperity.
2.2!Institutional framework and set-up Wales is a self-governing constituent country of the United Kingdom of Great Britain and Northern Ireland. It has a directly elected legislature, the National Assembly for Wales, and an executive arm, the Welsh Government. The National Assembly and its executive is responsible for a range of ‘devolved matters’ including education, health, local government, transport, planning, economic development, social care, culture, environment, agriculture, and rural affairs. In 2015 it employed some 5,596 people.
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The Welsh Government has had, since 1999, the power to develop its policies in the selected areas devolved to them and to implement them across the country. Following a referendum in March 2011 on direct legislative power, these powers have been strengthened to enable the National Assembly to propose and make its own legislation in additional areas without the prior agreement of the UK Parliament (with the exception of defence and aspects of tax and welfare). The subsequent proposed Wales Bill is likely to oversee further responsibilities devolved to the National Assembly over energy, transport, local government and Assembly elections. The Welsh Government relies on the UK Government for its funding (as does Scotland and Northern Ireland) which it receives as a block grant allocated on the basis of a long-standing formula called the Barnett Formula. This formula was introduced in 1978 partly to settle arguments between Cabinet ministers about spending allocations, and partly to allow for the economic and social needs of the old heavy industrial regions of the UK, notably Scotland and Wales. In 2012-2013 for example, Wales received £9,709 (€11,237) per head, some 14% higher than the equivalent figure for England. This current funding allocation for Wales results in an annual Welsh budget allocation (2015/2016) of £15.3b (€19.3b) of which almost £1.1b (€1.4b) is allocated to the Department of Economy, Science and Transport, of which innovation policies and programmes account for a budget of just under £4.4m (€5.6 m). Further, some aspects of regional innovation are funded through the grant for higher education research capacity by the Welsh Government through its Higher Education Funding Council for Wales (although its funding has been much reduced with the withdrawal of formula-based funding for ‘Innovation and Engagement’ in 2015). Welsh universities can also apply for research project funding directly to the national UK Research Councils, as well as the European R&D Framework programme. The Welsh Government does not currently have the competence to vary fiscal incentives aimed at R&D and innovation, with such matters largely a reserved responsibility to the UK level (although this will change with the introduction of The Wales Bill, currently before the UK Parliament, which will set out new fiscal powers for Wales, including powers to borrow for capital investment and powers in relation to taxation). At the same time, it has long been recognised that the funding available through the Welsh block grant from the UK makes the funding of basic or pure research unrealistic and unsustainable. This area of innovation therefore remains a UK competency with Wales focusing its support to higher education institutions in the areas of knowledge transfer and commercialisation. The devolved administration has taken a parallel but distinctive approach to innovation and technology through its policies towards universities and technology transfer mechanisms. At the same time, the executive of the National Assembly has been keen to create a new institutional landscape that has directly affected the design and implementation of innovation policy in the region. Innovation policy is now, almost entirely, through a series of policy measures managed by the Welsh Government departments responsible as described above. In achieving this delivery, the Welsh Government Department for the Economy, Science and Transport has structured its teams and lines of responsibility to implement its sector priorities – first introduced following the Economic Renewal Plan (ERP), launched in June 2010. Within each of nine priority sectors, ministers have appointed sector advisory panels of business leaders, with each panel led by a recognised sector champion to advise ministers and officials. Similarly, for each sector, Welsh Government officials are deployed within sector teams. Alongside the Welsh Government’s sector teams, the majority of managers and staff with responsibility for innovation support delivery are allocated to the Innovation Unit. This team acts as a horizontal mechanism providing support across the sector teams. Within these sector teams there are also staff with responsibilities for delivering innovation and enterprise support for particular sectors and their
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innovation activities and investments. The Welsh Government’s Life Sciences sector team is one such example, and has provided funding and support for the creation of innovation initiatives such as the Life Sciences Investment Fund (focusing on commercialisation of promising life science ideas in Wales), and the Life Sciences Hub (a facility bringing together academic, business, clinical and professional services and funding organisations to drive innovation in the sector). Coordination of the innovation policy has also to be managed with the Department for Education and Skills (DES), which has responsibility for funding higher and further education and has promoted ‘innovation and engagement’ in institutions. WEFO, the Wales European Funding Council, also has a role with respect to research and innovation via its management and delivery of EU Structural Funds in Wales, and support for Horizon 2020 in Wales. A key focus here is on creation of a Horizon 2020 Unit to support organisations looking for funding from the European Union. It also supports the SCoRE Cymru (Supporting Collaborative Research and innovation in Europe) programme of funding for Welsh-based organisations to access RD&I programmes such as Horizon 2020. Alongside this integration of innovation policy and strategy in Wales into the government, there has been an increasing number of Ministerial Advisory Groups comprising industry, government and higher education stakeholders. Most recently this trend has seen the creation of the Innovation Advisory Council for Wales (IACW). This body provides advice and guidance to the Minister on a broad range of innovation matters, including monitoring progress on delivering the objectives of Innovation Wales, and strategic advice to other organisations, such as WEFO, on potential European projects. IACW was launched in 2015 and has established a work programme based on four priority topics: •! Public Sector; •! Centres; •! Brand and Measure; •! Collaboration. In each of the priority topics the IACW is currently examining the future state of innovation, the specific barriers and issues facing Wales, and the opportunities to respond using the ‘smart specialisation’ approach identified by the European Commission. One of the findings of the Group’s early work has been the decision to review the need for an Innovation Body for Wales. To this end a series of stakeholder consultations is currently underway. At the cross-border level, there are limited formal mechanisms in place in the area of innovation (or any other) policy area. Welsh Assembly Ministers meet other devolved administration ministers on a range of matters, although as far as the informants for this report are aware, innovation has not been a point for discussion between the ministers and officials. Welsh Assembly officials do, however, participate in UK level groups chaired by the Department of Business Innovation and Skills (BIS) in London. However, these groups are not formal in their constitution, do not formulate policy and have little transparency. From time to time in the policy cycle, innovation support organisations and innovation focused intermediaries can play important roles in innovation policy development and implementation in Wales. However, none present themselves as fully independent, being reliant to some extent on Welsh Government funding through service level agreements or, more commonly, competitive tendering. This means that apart from a few examples, there is little evidence of sustainability amongst these organisations and intermediaries. One of the more independent, BIC Innovation, has maintained its position and role as a provider of innovation services to universities and businesses across Wales. In order to achieve this position, however, it has increasingly focused on commercial and non-
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subsidised activities. It has also increasingly sought to operate outside Wales in order to diversify its revenues and increase its independence and sustainability. Clearly the main influences on the existing institutional structures, implementation mechanisms and delivery responsibilities have been, first, devolution and the growing policy and programme independence from London, and second, the abolition of the WDA and the latter shift in focus from centrally developed and managed programmes and resources to a regional and sectoral focus. The availability of Structural Funds through, in particular, the West Wales and the Valleys Programmes have been pivotal and has in some respects protected innovation policy and programmes at a time when the economic policy agenda is viewed, by some informants, to have taken innovation for granted. The next few years will undoubtedly see further shifts in the place and institutional importance of innovation policy in Wales although at this point it is difficult to predict what these shifts may entail.
2.3!Regional innovation policy mix The primary strategic statement for innovation is ‘Innovation Wales’ (2014). This document sets out the Welsh Government’s approach to innovation in business, government and society. It identifies four grand challenge areas based on analysis of existing strengths and strategic opportunities. These were developed following an extensive process of consultation and are designed to inform the Welsh Government’s approach to the European Commission’s Smart Specialisation agenda: •! Life Sciences and Health; •! Low Carbon Energy and Environment; •! Advanced Engineering and Materials; •! ICT and the Digital Economy. The grand challenge areas are broad in their focus and it is recognised that strengths may be within particular niche areas, and that their precise strength may be variable. They do, however, represent the areas where Welsh Government intends to target investments in the coming years to: build a culture of continuous innovation, adding value to existing capability within Wales and realise the economic potential which innovation can deliver (Welsh Government, 2014). Innovation Wales further identifies a series of key themes and associated actions which are intended to address key innovation barriers in Wales: •! Improving collaboration; •! Promoting a culture of innovation; •! Providing flexible support and finance for innovation; •! Innovation in government; •! Prioritising and creating critical mass. Innovation Wales recognises that there are a number of important and significant challenges for innovation in Wales; for example, the need to broaden the definition and nature of innovation in Wales and to better engage with the ‘voice’ of the demand side. Even here, however, mixed views are apparent. In particular, the ‘supply side’, particularly the Universities, retain a strong voice and influence in Wales (as in other regions). However, due to the emphasis on the need to fully use the opportunity offered by ERDF funding in particular, supply side measures will still be significant elements of innovation investment and support programmes in Wales going forward.
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Alongside the refreshing of the innovation strategy in Wales, a science policy for Wales was also launched, supported by a number of funding streams and measurable targets. Science for Wales reflected the concern amongst many observers that, as with innovation, support for science (in general terms, not an area of responsibility for the Welsh Government) had placed too much emphasis on the scale (capacity) of science in Wales rather than quality (capability) of the investment and of the results. As a strong message, Science for Wales established three National Research Networks, supported by the government, industry and academia, to build research capability that is both world class and closely linked to commercialisation opportunities. Science for Wales, alongside Innovation Wales, represents Wales’ response to the Smart Specialisation Agenda. In broad terms the current system of support prioritises areas such as research and technologies, including direct support for R&D and technology adoption, as well as knowledge exploitation and knowledge transfer (see case study). The latter policy area has been particularly strong, with funding to support both university and further education college links to business. Support for wider forms of innovation, for the first time, includes social, public and service innovation. This is recognised in Innovation Wales’ support for actions in areas such as the culture of innovation, innovative procurement (SBRI), postgraduate training and so on. The current policy mix for innovation in Wales is dominated by the two major European-funded programmes – West Wales and the Valleys and East Wales (2014- 2020). The innovation support on offer through these programmes addresses the Science for Wales and Innovation requirements, and provides an integrated suite of support for business, higher and further education, and individual innovators in Wales, including: •! SMART Innovation which provides pan-Wales support for innovation and commercialisation through the provision of specialist advice and support for SMEs and large companies. This includes specialist innovation advisory support from a team of advisors, alongside other provision in areas such as intellectual property, manufacturing and design, open innovation, and commercialisation. •! SMART Cymru which provides grants for business R&D and innovation vouchers for business to access external sources of expertise (capital and revenue). The R&D grants include support at different stages of the innovation process including Development of Concept, Technical and Commercial Feasibility, Industrial research, Experimental development and Exploitation. •! SMART Expertise which offers pan-Wales grants via higher and further education. It is designed to strengthen capacity and expertise to develop research excellence, and to promote increased engagement and knowledge transfer between higher and further education and industry where there are common aims and clear business pull/industry need. These programmes are managed by the Welsh Government. Outside of the Welsh Government a number of other relevant sources of innovation support are available in Wales, including: •! Finance Wales support which invests in technology-led businesses with potential to become market leaders, and has provided investment in a number of early stage companies. Finance Wales are primarily focused on large scale and strategic projects. •! WEFO which provides funding for Welsh organisations to develop collaborative and more competitive RD&I bids with partners across Europe. This includes a range of EU funding streams such as Horizon 2020 and European Territorial Cooperation projects.
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Perhaps the key source of innovation technology support across the UK, however, is that provided by the primary UK innovation agency – Innovate UK. This includes opportunities to help companies and researchers to network, share ideas and find project partners nationally and internationally. This support is available for all UK based companies and individuals and includes access to innovation funding, networks, innovation vouchers and R&D funding (similar to SMART Cymru) and Horizon 2020 support. A key feature of the Innovate UK’s support suite, in recent years, has been the creation of a network of technology and innovation transfer centres – Catapult Centres. These have been established in technology priority areas across the UK, with the majority of these created as networked centres. While Wales has done well in accessing certain Innovate UK funding sources such as the Knowledge Transfer Partnership (KTP), it has done less well in securing Catapult centre funding. The challenge of securing a greater share of Innovate UK funding is one that the IACW is currently examining. Informants note, however, that the funding distributed in Wales by Innovate UK for the period 2014-2015 represented only £62m out of a total expenditure of £3.7b (€4.8b) (or 1.7% of the total). This is significantly below what might be expected given Wales’ population size (5% of the UK). The budgets for innovation policy instruments in Wales, as noted above, draw on a number of sources including the Welsh Government and the European Structural Funds. The major innovation programmes in Wales in the 2014-2020 period, as noted above, are the: •! SMART Innovation Programme; •! SMART Expertise Programme; •! SMART Cymru funding programme. These are amongst the largest programmes of support in financial terms (more than £130m over a six year period), and represent integrated programmes of support measures covering a large part of the innovation process with funding from a number of sources including EU Structural Funds and Welsh Government.
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Table 1 Existing regional innovation support measures Title Duration Policy priorities Budget Organisation responsible More information SMART Innovation 2014-2020 5.4 Innovation management advisory services £19.7m Welsh Government http://wales.gov.uk 4.4 IPR protection and exploitation SMART Expertise 2014-2020 2.1 R&D cooperation projects between academia £51m Welsh Government http://wales.gov.uk and industry 2.3 Knowledge transfer structures between academia and industry SMART Cymru 2014-2020 4.1 Direct funding to business R&D and £63m Welsh Government http://wales.gov.uk innovation Technology Venture N/A 2.3 Knowledge Transfer Structures £150m Finance Wales http://www.financewales.co.uk/ Funding 4.3 Fostering start-ups and gazelles HE innovation 2014-2020 1.3 Research infrastructure £100m+ Various HEIs in Wales https://www.aber.ac.uk/en/media/departmental/n campus investments, 2.3 Knowledge transfer structures between including: Cardiff, Swansea, ews/abernews/aber-news-14-e.pdf academia and industry Aberystwyth and Bangor http://sites.cardiff.ac.uk/cubric/ http://www.bangor.ac.uk/workingwithbusiness/faci lities.php.en http://wefo.gov.wales/programmes/progress/searc hprojects/80690?lang=en SCoRE Cymru N/A 7.1 Support to participation in international R&D N/A WEFO http://wefo.gov.wales/news/latest/130531score/?la (Supporting programmes ng=en Collaborative Research and innovation in Europe) Life Sciences N/A 2.3 Knowledge Transfer Structures N/A http://wefo.gov.wales/news/latest/130531score/?la Innovation Hub and ng=en Innovation Fund 5.5 Seed and early stage capital vehicles, business angel networks Open Innovation N/A 5.1 Cluster development N/A Welsh Government and ‘Anchor http://gov.wales/newsroom/businessandeconomy/ Awards companies’ 2013/7614975/?lang=en
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2.4!Appraisal of regional innovation policies In assessing regional innovation policies in Wales it is clear that the evaluation of policies has become more important in recent years. This has been driven by the publication of evaluation findings (ex-ante, mid-term and final) for all European funded programmes and projects in Wales. These findings, for the first time, have generally been made available on the WEFO website, providing an important source of evidence for future programming. A key feature of the innovation policy landscape in Wales is the important role of the Welsh Government and its use of Structural Funds. The Welsh Government, for example, has consistently used Structural Funds to provide an integrated series of supports for business innovation, knowledge transfer and R&D funding. The use of such funds is designed to compensate for the comparatively small proportion of funding received from the UK’s primary innovation support delivered by Innovate UK. Evaluations of the Welsh Government’s key innovation programmes, conducted in recent years, have found that the implementation of policy initiatives was hampered by the changes brought about by the ERP process (restructuring of the Department for Economy, Science, and Transport, and proposed introduction of repayable finance), and the economic downturn. These changes presented significant difficulties for the Welsh Government Innovation team and made it difficult for them to ensure sufficiently high levels of industry engagement, particularly in the early parts of the last Structural Funds programming period. Evaluation results also highlight the difficulties that the Innovation Unit have faced in fully integrating initiatives, and encouraging partners to make use of multiple programmes within the suite. Despite these challenges the programmes have generally been able to achieve their overall objectives with respect to creating jobs, introducing new products and services, creating new collaborations, levering in additional funding and improving R&D behavioural additionality. The evaluations highlight that while the return on investment from such programmes may be low, the potential for longer-term benefits is much greater. Such findings are consistent with the long-term nature of the innovation process. In addition to the SMART suite of programmes, Table 1, above, points to the important role of universities in supporting regional innovation. Analysis from earlier programming periods suggests that universities have been the primary recipients of funding for innovation in West Wales and the Valleys. This can be seen in a proliferation of programmes delivered in the area of knowledge transfer and innovation. While such schemes such as the ASTUTE, WISE and Institute of Sustainable Design projects were primarily focused on SMEs and large company support, the current round of Structural Funding has seen a much stronger focus on research excellence and research infrastructure investments. This has seen substantial investments in RD&I campus infrastructure across a number of Wales’ key universities. These investments respond to the desire to support critical mass through larger, more strategic investment in RD&I capability (following the strategic approach set out in Innovation Wales). Concerns have been raised by informants regarding the focus on university support for SMEs and their lack of sustainability beyond the initial funding period. In this respect many supports established in earlier programming periods have been closed. The desire to address the question of sustainability has led the Welsh Government to place a greater focus on projects designed to develop innovation infrastructure, and mechanisms (e.g. SMART Expertise) to involve SMEs and, to a greater extent, larger companies. While this has the potential to produce positive impacts on research for Wales, there are concerns that new innovative start-ups and SMEs will find it difficult to engage fully. Despite the support available for universities to engage and support regional innovation, the recent decision to withdraw HEFCW Innovation and Engagement formula funding has weakened the so-called dual funding system for higher education
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knowledge transfer supports – comprising core funding and competitive funding. While the Innovation Engagement funding was not necessarily significant in scale for all institutions, the withdrawal means that other programmes have become all the more important. This contrasts with institutions in England, which are still able to benefit from core Higher Education Innovation Funding (HEIF), alongside competitive funding from other sources such as Innovate UK. Elsewhere, the Welsh Government sector teams have taken steps to support greater industry engagement in the support of innovation. Here its work with the so-called ‘anchor companies’ (key investors in Wales) on programmes to encourage knowledge transfer and networking (open innovation), as well as supporting investments in innovation infrastructure and support in the priority sector are key interventions. In these cases the Welsh Government is building on existing strengths, and encouraging greater knowledge based interactions and links between larger companies and SME suppliers. This initiative in the early stages of development, and the ability to draw in supply chains to spread out the benefits of open innovation will be central to their success. Other areas of criticism have been the relatively narrow focus of innovation that is present in Wales. This has tended to see innovation support concentrated in technology commercialisation from universities and an accompanying drive for IP embedded within products. Relatively little attention, however, has been given to process; management; social, service or design innovation, despite the focus of Innovation Wales. In this respect it could be argued that current innovation policy mechanisms in Wales (e.g. the SMART suite) represent continuations of previous activities. While this is positive in terms of continuity, the concern is that the lack of ‘innovation’ in innovation policy has prevented Wales from developing a more holistic approach to innovation support.
2.5!Policy good practice The Welsh Government’s Innovation Specialists provide frontline contact and support for entrepreneurs and academics wishing to access the support available from Welsh Government’s innovation programmes and beyond. While funded directly by the SMART Innovation programme the 11 Specialists are able to support and advise business and academics on the suitability of innovation ideas, and the application process for programmes, and provide ongoing support. In this respect the Innovation Specialists contribute towards the ‘triage’ service employed by the Welsh Government innovation team to conduct an initial review of applications to the SMART programmes. As specialists the Innovation Specialists are typically experienced entrepreneurs and innovators, with a sectoral or technological expertise. This helps to ensure that the ‘triage’ service operates smoothly, and gives confidence to entrepreneurs and academics wishing to access support. This specialist expertise also provides the basis for ongoing links and relationships, ensuring continuity which can help businesses move from one form of support to another. The recent evaluation of the Business Innovation Programme (The Innovation Partnership and CM International, 2015) found that the Innovation Specialist are highly regarded individuals because of their knowledge of innovation, their networks and their appreciation of business needs. The Innovation Specialists are very much seen as honest brokers and their role overall enhances the innovation support delivery. The success of the Innovation Specialist network, however, meant that limited time was available to support all companies, particularly during the early stages of engagement and for roadmapping and blueprinting. The evaluation found that there is a role for them to front other programmes and that there was potential to grow the Innovation Specialist network further. A second area of good practice is the Wales Innovation Centre for Enterprise (ICE). They developed a new mixed approach combining innovation and enterprise
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support. It aims to provide a nurturing and supportive environment for new innovative start-ups and potential entrepreneurs can gain skills and confidence. To do this ICE uses its property base to provide facilities such as co-working desk space, offices and meeting rooms where entrepreneurs can start and develop their business. The ICE management team focus much attention on providing support through advice, training, events and facilitating a creative environment and collaborative activities. It also encourages and supports ICE tenants (termed as Members) to share their experience and expertise through collaboration with other like-minded entrepreneurs leading to effective peer-to-peer networking. ICE memberships are sponsored by one of a number of stakeholders including the Welsh Government. Indeed, Welsh ICE was created, partly, to take advantage of this shift in focus to a more innovative and enterprising culture and, partly, to make a contribution to the further development and embedding of that culture. Evaluation findings suggest that Welsh ICE has achieved a positive impact in respect of both jobs and GVA – with further optimism for the future. It has also delivered both Operational and Strategic Added Value including improving attitude towards enterprise. Strategically, the Welsh ICE has contributed towards a number of the commitments made by the Welsh Government in its Programme for Government and stakeholders support the view that Welsh ICE is making an added value contribution to the South East Wales business start-up environment. In this respect, Welsh ICE may be regarded as an ‘anchor’ of the emerging ecosystem, although Welsh ICE is generally regarded as more suited to supporting the emergence of businesses working in less high tech sectors and with a greater reliance on business model innovation rather than technological innovation as the main driving force. This is indicative of its support for wider forms of innovation.
2.6!Possible future orientations and opportunities The launch of the new European programmes (2014-2020) and associated projects such as the Welsh Government’s suite of SMART innovation supports means that the future direction of innovation policy and support is arguably well established over the coming years. The new SMART suite has the prospect of learning lessons from earlier rounds and has the potential of leveraging strong impacts in areas such as business innovation, and improved capacity of universities to support innovation through knowledge exchange and knowledge transfer. More broadly, the Research and Innovation Priority of the current Structural Funds programmes are likely to see further projects brought forward to promote Research and Innovation and SME Competitiveness. In comparison to earlier Structural Funds programmes this is likely to see a stronger focus on building research and innovation capacity and encouraging larger firms to innovate. In parallel the potential to secure funding from external sources such as Horizon 2020 and Innovate UK is being strengthened with concerted capacity building actions. •! Developing a strategic focus on innovation While Wales was one of the first regions to develop a regional innovation strategy (The Regional Technology Plan), the strategic focus on innovation has become less strong since the creation of the Welsh Government in 1999. In recent years, however, this has begun to change with the launch of the Innovation Wales Strategy (2014). This was developed to provide a Smart Specialisation framework for Wales, but has arguably helped to support innovation action more widely. The creation of the IACW further implies that there is potential for new methods and approaches to be developed, which enhance existing support. This is, arguably, much needed as a way of strengthening the diversity of Wales’ innovation ecosystem, including the support on offer, while maintaining the strategic focus on RD&I at a time of strong implementation in areas such as international collaboration, public sector innovation, innovation centres, and promotion. The potential for a new innovation body is also being considered.
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In many respects the prospect of a dedicated innovation body is one that could help to better ensure that the innovation ecosystem continues to evolve and best meets the need of businesses, universities and other stakeholders. It also has the potential to work with external innovation agencies to capture best practice and ensure that Wales is best able to address funding opp0rtunities from sources such as Innovate UK. This should help to think more ‘innovatively’ about innovation and refresh existing thinking and practices in innovation support. •! Exploiting and embedding new research and innovation infrastructure Beyond the work of IACW and the SMART suite there are a wide range of innovation initiatives that are in their early stages of implementation. This includes the many investments in university innovation campuses across Wales. These represent significant investments and a new focus on promoting interaction and a desire to ensure that a greater legacy is left from research and innovation projects funded by European Structural Funds. The key to the new innovation campus initiatives will be their success in bringing in new research funding from industry and competitive sources, and engaging in collaborative projects with both large and small companies in Wales. This is an area where Wales has traditionally underperformed. There are, however, signs that key funding sources such as Innovate UK are beginning to give greater attention to innovation in Wales with recent investments in the Precision Medicine Catapult Centre. Given the focus of campus and technology centre investments in helping to support collaborative R&D and commercialisation activity such activities are important to the future success of Wales. Indeed the lack of collaboration and commercialisation were some of the factors underpinning the failure of earlier strategic investments such as the largely closed Technium network. This network was not always well connected to sources of research expertise and was unable to generate sufficient demand from SMEs and larger companies. Learning such lessons will be important to the future development of campus and centre investments. •! Harnessing the potential of open innovation networks in Wales The Welsh Government have been working with their strategic ‘anchor’ companies, for a number of years, to develop new ways of maximising their impact on innovation in Wales. This forms part of wider attempts to support and embed large companies in Wales through a programme of aftercare. The current open innovation pilot project will see a series of anchor companies work on innovative and new ways of engaging with market partners in Wales (suppliers and/or customers) on new, exploitable, solutions for the benefit of all parties. The basic principle of such initiatives is that larger companies can work with others to develop solutions to particular problems. This may include the use of intellectual property that is being under-utilised by the company, and enabling them to access specialist expertise held by smaller companies. The launch of the pilot project holds the prospect of new networks to be developed, with the support of universities, and smaller companies to work together to address innovation needs, while gaining a better understanding of the markets they operate in and technical solutions required, sharing best practice and so on. This represents a different way of supporting innovation in Wales and one that offers a new model for engaging smaller companies in commercial innovation projects, and one from which lessons should be captured in terms of future innovation support. •! Broadening out the role of innovation to support multiple strategic and societal challenges Innovation support in Wales has primarily been framed as a technological activity with commercial benefits. This is linked to the needs of traditional manufacturing and engineering businesses and the difficulties of designing supports for service businesses
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(that meet state aids requirements). Design, and its role as a driver of innovation, is a further area where policy has placed comparatively limited attention, despite growing evidence of its importance in other regions and countries. These are not areas where significant activity is currently taking place: However, the greater emphasis being placed at the European level of such drivers and types of innovation provides an area which could be explored through mechanisms such as IACW. A further area for possible exploration is the growing recognition of the potential for innovation to contribute towards the development of solutions for societal challenges. Such innovation has benefited Wales in the past with the work of the (then) Welsh Development Agency in helping to address the pollution and environmental degradation associated with coal mining and other heavy industries. Such ‘greening of the valleys’ represented one of the key outputs of the WDA and the basis for international good practice and learning (Hester and Harrison, 1997). The importance of challenge-led innovation is recognised clearly in the Innovation Wales strategy, and can be seen in its reference to public service innovation. Here Wales has one of the largest public sector workforces in the UK, linked primarily to the comparative weakness of the business sector. Modernising the public sector, faced by all, has a particular focus in Wales. Practical expression of innovation activities such as the Welsh Government’s creation of the Public Policy Institute for Wales20, and Nesta’s Y Lab – the public services innovation lab for Wales (NESTA, 2015). These initiatives will help to identify best practice and learn lessons that can help Wales adapt to current and future public sector challenges. While there is some activity taking place through these initiatives there is potential for this to be strengthened and targeted particularly at key societal challenges facing Wales and the wider world.
20 See: http://ppiw.org.uk/
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Appendix A Bibliography
1.! Department for Business, Innovation and Skills (2012) UK Innovation Survey 2011: statistical annex (revised). Available at: https://www.gov.uk/government/statistics/uk-innovation-survey-2011- statistical-annex-revised 2.! Dragon Innovation Partnership (2014) MACH 1 2014 Case Study. Available at: http://www.dragonip.ac.uk/index.php/news-and-events/mach-1-2014-case- study 3.! Engineering Employers Federation (2015) Regional Manufacturing Outlook, July. Available at: https://www.eef.org.uk/resources-and-knowledge/research-and- intelligence/industry-reports/eef-regional-manufacturing-outlook 4.! ESTnet (2015) The ESTnet Annual Review 2015. Available at: http://estnet.uk.net/media/40228/estnet-annual-review-2015.pdf 5.! European and External Affairs Committee (no date) Welsh Participation in EU Research, Innovation and Lifelong Learning Programmes. Available at: http://www.assembly.wales/NAfW%20Documents/efp011_- _cardiff_university.pdf%20-%2029112010/efp011_-_cardiff_university- English.pdf 6.! Government Office for Science (2010) Technology and Innovation Futures: UK Growth Opportunities for the 2020s, Foresight Horizon Scanning Centre. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file /288564/10-1252-technology-and-innovation-futures.pdf 7.! Hester, R.E. and Harrison, R.M. (1997) Contaminated Land and Its Reclamation. Thomas Telford Ltd. 8.! Huggins, R., Jones, M. and Upton, S. (2008) ‘Universities as drivers of knowledge-based regional development: a triple helix analysis of Wales’. International Journal of Innovation and Regional Development, vol. 1 (1), pp 24- 47. 9.! IQE (No date) The Compound Semiconductor Centre: strategic vision. 10.! Miller Research (2014) Labour Market Intelligence Research into the Advanced Materials and Manufacturing Sector in Wales. Available at: http://www.semta.org.uk/images/pdf/LMI_Advanced_Manufacturing_Report.p df 11.! NESTA (2015) Y-Lab: a New Public Services Innovation Lab for Wales. Available at: http://www.nesta.org.uk/blog/y-lab-new-public-services-innovation-lab- wales#sthash.jccuBf4F.dpuf 12.! Regional Innovation Monitor Plus (2015) Thematic Paper 1: Mapping advanced manufacturing networks and exploring new business opportunities. Available at: https://ec.europa.eu/growth/tools-databases/regional-innovation- monitor/report/thematic/thematic-paper-mapping-advanced-manufacturing- networks-and-exploring-new-business 13.! Technology Strategy Board (2008) Advanced Materials, Key Technology Area, 2008-2011. 14.! The Innovation Partnership and CM International (2015) Final Evaluation Report for the Welsh Government Business Innovation Support Project. 15.! University of South Wales (no date 1) Manufacturing Supply Chain Demand Study. Available at: http://gov.wales/docs/det/report/140724-amm-mscds-final- report.pdf
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16.! University of South Wales (no date 2) Materials and Advanced Engineering Knowledge Exchange Strategy (MAeKES): a report on a foresight report on the sectors in the next 15 years. 17.! Wales National Research Network (2014) Advanced Engineering and Materials: Identifying and Prioritising Potential NRM Research Topics. Available at: http://www.ernw.ac.uk/media/AE&M%20Wales%20NRM%20Final%20Report %204th%20April%202014 18.! Welsh Government (2011) Programme for Government. Available at: http://gov.wales/docs/strategies/110929fullen.pdf 19.! Welsh Government (2012) Science for Wales: A strategic agenda for science and innovation in Wales. Available at: http://gov.wales/docs/det/publications/120306scienceen.pdf 20.! Welsh Government (2014) Innovation Wales. Available at: http://gov.wales/docs/det/publications/140313innovationstrategyen.pdf
Appendix B Stakeholders
1. David Rosser, Director, Welsh Government (date of interview 14 October 2015). 2. Dr Alastair Davies, Director, Innovation Wales, Welsh Government (date of interview 26 November 2015). 3. Phillip Allen, Director, Innovation programmes, Welsh Government (date of interview 02 December 2015). 4. Professor Kevin Morgan, Cardiff University (date of interview 30 June 2015). 5. Tom Whyatt, CEO, Industry Wales (date of interview 26 November 2015). 6. Chris Meadows, Head of Open Innovation, IQE plc (date of interview 26 November 2015).
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