Innovation South - a Powerhouse of World Class Strengths in Digital Enabling Technologies

INNOVATION SOUTH - A POWERHOUSE OF WORLD CLASS STRENGTHS IN DIGITAL ENABLING TECHNOLOGIES

A SCIENCE AND INNOVATION AUDIT REPORT SPONSORED BY THE DEPARTMENT FOR BUSINESS, ENERGY & INDUSTRIAL STRATEGY REPORT 2017 ACKNOWLEDGEMENTS

Message from Dr Mike Short, CBE FREng FIET, Chair, Innovaton South Strategic Steering Group, VP Telefónica

This report is sponsored by the Department for Business, Energy and Industrial Strategy (BEIS) and produced on behalf of Innovaton South, a consortum of over 120 private and public organisatons from across Dorset, East & West Sussex, Hampshire, the Isle of Wight, Kent, Surrey, and the Thames Valley (see Annex D). The consortum’s ongoing endorsement of this Science and Innovaton Audit is most appreciated.

The report was primarily authored with the invaluable support and expertise of members of the Innovation South Strategic Steering Group (see below) and its Advisory group (see Annex D), to whom I am most grateful, and thank them for their time and dedication. Many thanks as well to Christine Doel and Ross Gill of SQW who expertly helped us make sense of a vast amount of evidence received and information gathered.

Thanks also to staf at Technopolis for their support and guidance as we navigated the process. During the preparaton of this report around 200 people from business, academia and public services across the region atended workshops and/or submited writen evidence. Their contributons have been extremely valuable and highly appreciated.

Finally, I would like to thank Sue Litlemore as Project Manager and Editor, Lucy Crabtree for her support and unfailing organisatonal skills, and the Enterprise M3 Local Enterprise Partnership for its excellent leadership in the delivery of this substantal project. STRATEGIC STEERING GROUP MEMBERS Sue Litlemore, Higher Educaton Project Manager, Enterprise M3 LEP Chair: Dr Mike Short, Vice President Public Afairs, Hema Marshall, Head of Country Digitsaton & Telefonica Europe Skills, Cisco UK Mat Albans, Service Design Manager, BAE Systems Colin McKinnon, CEO, Insttute for Environmental Carole Barron, Director of Innovaton & Enterprise, Analytcs University of Kent Prof. Paul Nightngale, Professor of Strategy, Science Ross Burton, Stakeholder Engagement Manager, Policy Research Unit, University of Sussex Smart Specialisaton Hub Mel Redding, Director, Jumelia Ltd. Lorna Carver/Rob Dunford, Director/Interim Prof. Nick Reed, Academy Director, Transport Director, Dorset LEP Research Laboratory Prof. Dave Cooper, Professor of Management and Keith Robson, Chief Operatng Ofcer, 5G Innovaton Economic Development, University of Chichester Centre, University of Surrey Sarah Duckering, Director of Research and Iain Shepherd, Chair, Marine South East Ltd. & Chair, Innovaton Services, University of Portsmouth Natonal Oceanography Centre Advisory Council Kevin Forshaw, Associate Director, Enterprise and Prof. Peter J S Smith, Director, Insttute for Life Research Impact, Natonal Oceanography Centre Sciences, University of Southampton David Gillham, Director, Thames Valley Science Park Prof. Mark Spearing, Vice President (Research and Prof. Paul Hogg, Vice Principal and Dean of Science, Enterprise), University of Southampton Royal Holloway University of London Chris Ward, Head of Space R&D, Airbus UK Dr Daryl Landeg CPhys FInstP, Chief Technologist, AWE FOREWORD A number of recurrent themes were raised by businesses during the preparaton of this report. Innovaton South is A high tech innovatve digital economy relies on a spearheading the UK’s digital good supply of high tech, highly specialised digital revoluton. From beter health talent. Fresh thinking on both stmulatng that care to safer transport and supply at home and maintaining access to talent from adventurous immersive abroad was a repeated demand. Other frequently technologies to the design identfed barriers to innovaton and improved of super fast racing yachts, productvity were the relatvely high cost and Innovaton South is a limited availability of housing in the region, and the substantal region at the forefront of advances in need to enhance the efciency of transport links to digital innovatons that are constantly improving our London, west-east connectons across the region daily lives. and the ease of connecton and transit to/from major air/sea ports. Spanning eight countes outside the M25, and across some of England’s most beautful areas of The auditng process has brought together business countryside and coastline, Innovaton South is not people, entrepreneurs and academics, many of only a very signifcant contributor to the whole of whom had never met before, and enabled them to the UK economy, it is also a superb place to live and focus clearly on how Innovaton South really can be work. powerfully greater than the sum of its parts. This Science & Innovaton Audit, sponsored by BEIS, As the UK and Innovaton South face future is a tmely and valuable opportunity to highlight challenges and opportunites, there is a pressing the outstanding strengths of Innovaton South in need and a strong ambiton to contnue and digital enabling technologies and the applicaton of extend levels of region-wide collaboraton initated those technologies to make advances in several key during this Audit. That ambiton, refected in the sectors in the South: Digital, Biosciences, Marine & recommendatons at the end of this report, must be maritme and Advanced Engineering. realised in order to unlock the vast commercial and exportng potental in the region’s economy. Close to London and Heathrow, this is a high performing region. The economic output of It is Digital Enabling Technologies that are Innovaton South is close, in scale, to that of the key drivers in advances in entertainment, Denmark. Exports and foreign investments are communicatons, health, marine operatons and strong; much of the workforce is highly skilled; transport. That is undisputed. More uncertain a dynamic stock of businesses, from huge is which countries will capitalise on these multnatonals to entrepreneurial scale ups, opportunites. Innovaton South is poised to deploy are working with the region’s richly diverse and its outstanding expertse in partnerships with other excellent universites to turn world class science in regions to help ensure the naton which takes the digital technologies into innovatve products and lead in those advances is the UK. services that will compete in global markets.

This report demonstrates Innovaton South is a Dr Mike Short CBE FREng FIET, VP Telefónica & region in a good positon to face challenges ahead. Chair, Innovaton South Strategic Steering Group It also highlights opportunites that must be grasped if Innovaton South is to maintain and enhance its valuable place as a regional success, and a major supporter to the broader UK economy, for London and beyond. CONTENTS

EXECUTIVE SUMMARY...... i

1. INTRODUCTION - INNOVATION SOUTH: A WORLD LEADER IN THE SCIENCE AND COMMERCIAL APPLICATION OF DIGITAL ENABLING TECHNOLOGIES...... 1 What are “Digital Enabling Technologies”?...... 3

2. INNOVATION SOUTH – ENGLAND’S GLOBAL REGION ...... 4 Introducton ...... 5 Productvity, business and innovaton in the South ...... 6 Looking Forward ...... 14

3. SCIENCE AND INNOVATION STRENGTHS IN DIGITAL ENABLING TECHNOLOGIES...... 15 Introducton ...... 15 Innovaton South’s science and innovaton strengths in Digital Enabling Technologies...... 17 Digital communicatons ...... 17 Cyber security ...... 20 Big data analytcs ...... 22 Photonics ...... 24 Quantum ...... 26 Research excellence in Digital Enabling Technologies goes deep & wide ...... 27 The commercialisaton of Digital Enabling Technologies ...... 28

4. APPLYING DIGITAL ENABLING TECHNOLOGIES – IN “CONNECTED DIGITAL”...... 32 “Connected digital”, and its presence in the South ...... 32 Innovaton South’s four overlapping roles in spearheading “connected digital”...... 34 “Connected digital” science and innovaton assets in the South ...... 41 Conclusion ...... 43

5. APPLYING DIGITAL ENABLING TECHNOLOGIES – IN MARINE AND MARITIME...... 44 Marine and maritme sector, and its presence in the South...... 44 Digital Enabling Technology drivers and challenges…...... 45 Marine and maritme science and innovaton assets in the South ...... 47 Conclusions ...... 55 6. APPLYING DIGITAL ENABLING TECHNOLOGIES – IN BIOSCIENCE...... 56 Bioscience and its presence in the South...... 56 Digital Enabling Technology drivers and challenges…...... 57 Other trends and drivers impactng on the bioscience sector...... 58 Bioscience science and innovaton assets in the South...... 58 Conclusions...... 67

7. APPLYING DIGITAL ENABLING TECHNOLOGIES – IN ADVANCED ENGINEERING...... 68 Advanced engineering and its presence in the South...... 68 Digital Enabling Technology drivers and challenges...... 69 Advanced engineering innovaton assets in the South...... 71 Conclusions...... 78

8. CONCLUSIONS, KEY FINDINGS AND GAP ANALYSIS...... 79 Introducton ...... 79 Opportunites in Innovaton South’s four key sectors...... 79 Overarching conclusions...... 80 Opportunity areas...... 81 Moving forward...... 86

ANNEX A: BUSINESS CASES...... 87

ANNEX B: HOW THE SIA WAS DEVELOPED...... 109

ANNEX C: WORKSHOP REPORTS...... 111 Workshop 1: Connected Digital...... 113 Workshop 2: Digital enabling technologies ...... 119 Workshop 3: Advanced manufacturing...... 125 Workshop 4: Marine and maritme...... 130 Workshop 5: Bioscience...... 136

ANNEX D: THE INNOVATION SOUTH CONSORTIUM...... 142

ANNEX E: WORKING WITH OTHER SIA REGIONS...... 145

ANNEX F: RESEARCH EXCELLENCE FRAMEWORK TABLES IN SIA SECTORS...... 147 EXECUTIVE SUMMARY

In Autumn 2015, the UK Government announced INNOVATION SOUTH regional Science and Innovaton Audits (SIAs) to catalyse a new approach to regional economic Innovaton South spans eight countes, two Natonal development. SIAs enable local consorta to Parks, and more than a thousand kilometres of focus on analysing regional strengths and identfy England’s coastline. From Dorset to Kent and from mechanisms to realise their potental. the Isle of Wight to the fringes of London, it is home to more than a tenth of the UK populaton and In the South of England, a consortum, “Innovaton supports an economy comparable in size to that of South”, was formed to examine the region’s Denmark3. capacity to commercially exploit its excellence in a portolio of Digital Enabling Technologies1. The Innovaton South Consortum embraces well Specifcally, it examined the hypothesis that over one hundred organisatons from the region’s while others may share strengths in individual private (SME and corporate) and public sectors. technologies, Innovaton South stands out for They are united around an ambiton to sustain and the number and breadth of digital enabling advance the fndings and recommendatons of this technologies, and their widespread applicaton Science and Innovaton Audit in order to maximise in four high-tech sectors: Connected Digital, the region’s contributon to the UK’s global infuence Marine and Maritme, Bioscience, and Advanced in the science and commercial applicaton of Digital Engineering2. Enabling Technologies.

This report presents the results, and includes broad- ranging analysis of Innovaton South’s capabilites, the challenges and the substantal opportunites for future economic growth.

BERKSHIRE Maidenhead Reading HEATHROW M4 AIRPORT ROCHESTER M25 Rochester AIRPORT Bracknell LONDON AIRPORT M25 Camberley Epsom M20 Woking M2 Canterbury Farnborough Basingstoke M3 SURREY Maidstone Andover Guildford M23 M20 Dover GATWICK Royal AIRPORT Tunbridge KENT HAMPSHIRE Wells Folkestone Winchester Crawley

SOUTHAMPTON AIRPORT

M27 WEST SUSSEX EAST SUSSEX Hastings Blandford Southampton Chichester DORSET Forum BOURNEMOUTH Portsmouth Brighton AIRPORT Worthing Newhaven Eastbourne Bournemouth ISLE OF Shanklin Weymouth WIGHT Ventnor

Innovaton South

1"Digital Communicatons (5G)”; Cyber Security; Big Data Analytcs; Photonics; Quantum 2This hypothesis had been developed by the consortum and explained in an Expression of Interest which was accepted by BEIS and provided, efectvely, the Terms of Reference for the SIA 3ONS, OECD i A HIGH PERFORMING REGION Internatonal ownership is high among the region’s numerous large corporatons; its labour market Innovaton South has many economic advantages. atracts high skilled internatonal talent and there Much of the workforce is highly qualifed and good is very good access to internatonal markets via the numbers of people work in science, research, region’s airports and ports. engineering and technology. Average earnings are higher than England’s and there are impressive The region is entrepreneurial and there is a strong levels of productvity in some parts of the region. track record of producing and commercialising world class and high quality research. The region It’s a dynamic region for business growth. Across benefts from 16 universites with a diverse range of most of the area, the concentraton of start-up expertse and capability which are playing a key role enterprises and the incidence of high growth frms in spinning out and fostering new businesses. are well above England’s average. Business start- ups outnumber business deaths and the share Business expenditure on research and development of natonal companies is larger than the natonal in the Innovaton South area is high, and according average. to a new analysis, the region “punches above its weight” for public investment in research into The success of Innovaton South is signifcantly Digital Enabling Technologies. infuenced by a close relatonship with London. The region’s proximity and connectvity to this dynamic INNOVATION SOUTH: EXCELLENCE IN DIGITAL and growing world city makes it an atractve ENABLING TECHNOLOGIES business locaton; there are strong commutng fows in both directons and the links beneft both Digital Enabling Technologies can and are being economies. deployed in an increasing number of sectors. They are critcal to innovaton, economic growth and A GLOBAL AND ENTREPRENEURIAL REGION global compettveness for both Innovaton South and the UK. Innovaton South has world-class The Innovaton South economy is intrinsically research strengths and innovaton capabilites internatonal. Export performance is strong and in a portolio of fve powerful Digital Enabling levels of foreign investment are impressive. Technologies:

Digital comms Cyber security Big data analytcs Photonics Quantum including ffh generaton (5G) the protecton of data from the process of collectng, involves manipulatng quantum devices, wireless communicatons thef, damage or disrupton. organising, analysing, light using lasers and components and systems are enabling a step change in the Arguably, the single largest visualising and optmising optcal fbres. It has based on the ability to capture capacity, speed, stability and challenge for the world’s large, complex and dispersed revolutonised many areas and manipulate single atoms potental for innovaton of growing digital economy. data. including communicatons, and partcles of light. They internet systems. medicine, aerospace and are critcal to the long term manufacturing. Fibre optc “future-proofng” of digital networks and developments enabling technologies, lower in photonics will underpin all manufacturing costs and future communicatons, data sustaining growth in computer and internet services. processing speeds.

Digital Enabling Technologies

ii Digital Communicatons - Regional Strength & world’s frst Big Data Centre of Excellence for the Natonal Asset whole food system; Royal Holloway’s specialisms in machine learning - Britsh Gas is among its The 5G Innovaton Centre (5GIC), based at the partners. The University of Portsmouth’s Insttute University of Surrey, is the largest open innovaton of Cosmology and Gravitaton, IBM at Hursley and centre for 5G development worldwide. Key partners QinetQ, and Dame Wendy Hall, Regius Professor of include major internatonal corporates, and in 2016 Computer Science at the University of Southampton, 5GIC was recognised by G7 natons as a global is jointly leading a government review of the UK’s leader driving the growth and promoton of a world-leading Artfcial Intelligence technology. digitally-connected world4. Photonics at Southampton - world-leading pioneers This leading facility is a valuable asset not just for in lasers & optcal fbres; transformers of billions of the South but, importantly, for the whole UK. There lives are plans to create regional and natonal test beds connected to the 5GIC core network. They include: There is a concentraton of photonics research Digital Greenwich (London); NE LEP (Northern expertse at several Innovaton South universites, Powerhouse); and Worcestershire LEP (Midlands which is distnctve for its impact on everyday life Engine). and wider society. Researchers at the University of Southampton’s Optoelectronics Research Within the region, partnerships include, Centre (ORC) have been making ground-breaking investgatons with Airbus and Portsmouth discoveries in photonics throughout the centre’s University to create a Satellite/5G and Big Data four decades. A device that led to the rapid Innovaton Centre; work with Enterprise M3 LEP expansion of the internet was developed in the to extend the 5GIC existng network of SMEs; and 1980s, for example, and its numerous industry a DCMS-commissioned 5G network and mapping partners include BAE Systems, BMW, VW and Volvo. tool, involving Bournemouth Council, Dorset LEP, The Universites of Surrey, Kent and Sussex also have Ordnance Survey and the Met Ofce, ahead of the signifcant research strengths in photonics. natonal roll out of 5G. Quantum Cyber Security: A global Industry; An Innovaton South Speciality The pursuit of quantum technologies is a natonal priority and universites across Innovaton South are In the UK, three of the fourteen universites now stepping up to the challenge, namely Southampton, recognised by Government as Academic Centres Sussex and Royal Holloway. All are key collaborators of Excellence in Cyber Security Research are in in one or more of the four Quantum Technology Innovaton South: Royal Holloway, University of Hubs. Southampton, and University of Surrey5. The University of Sussex is leading work with Google Royal Holloway’s Informaton Security Group, and Aarhuson on a breakthrough in developing a established in 1990, has long standing, expertse in quantum computer; the University of Southampton Cyber Security research and educaton, endorsed by is important in developing the industrial capacity GCHQ. and supply chain for quantum products and has partcular expertse in the commercial exploitaton Big Data Analytcs: Big Business; Deep Expertse of the technology with regional partners, the Government’s Defence Science and Technology Expertse in the South goes broad and deep: Laboratory (Dstl) and Natonal Physical Laboratory University of Reading’s Insttute of Environmental (NPL), the UK’s Natonal Measurement Insttute; The Analytcs and partnership in Agrimetrics, the University of Surrey has close working links with the

4Joint Declaraton by the G7 ICT Ministers, Takamatsu, Japan (April 2016).) See also notes from G7 ICT ofcials meetng, Brussels, 2nd December 2016 (meetng convened by Japan G7 Presidency. Chaired by Vice Minister Shigeki Suzuki and moderated by Yoichi Iida Director for Internatonal Research and Policy Coordinaton) 5EPSRC, Academic Centres of Excellence in Cyber Security Reasearch scheme, htps://www.epsrc.ac.uk/research/centres/acecybersecurity/ iii Natonal Physical Laboratory (NPL). Together they Marine & Maritme formed the NPL South hub and aim to expand the quantum industry. DIGITAL ENABLING TECHNOLOGIES: THE Innovaton South is one of the strongest contributors to the UK’s marine and maritme OPPORTUNITIES AND THE CHALLENGES industry, which, it is estmated, is similar in scale to pharmaceutcals and notably bigger than aerospace. The innovaton and commercial opportunites According to the Government’s 2015 Maritme that can fow from deploying digital enabling Growth Study, “The Solent’s…business base, skills technologies are immense, and the UK government , traditons, research and educatonal strengths, has clear ambitons for their development. These place it at the forefront of the natonal marine and signifcant rewards will go to whichever regions maritme economy.” In this sector, digital enabling and natons can address the important social, technologies are critcal for future compettveness, ethical, technological, economic and regulatory especially, robotcs, sensors, big data analytcs, issues which need to be unlocked before digital smart ship autonomous systems, cyber and enabling technologies deliver their full potental. Its electronic warfare, human computer interacton outstanding industrial and research expertse, in a and communicaton. This means together with portolio of fve digital enabling technologies, places the region’s outstanding industrial and research Innovaton South in an extremely strong positon to assets, including Lloyd’s Register, BAE Systems, help ensure it is the UK that reaps those rewards. QuinetQ, Sunseeker, the Natonal Oceanography Centre and the Marine Robotcs Innovaton Centre, APPLYING DIGITAL ENABLING TECHNOLOGIES IN the substantal growth opportunites in marine FOUR OF THE SOUTH’S KEY HIGH TECH SECTORS and maritme play extremely well to this region’s specialist strengths.

Connected Digital Bioscience

The digital economy is a UK success story and the Innovaton in the use of digital technologies to outstanding performance of the Connected Digital improve health care, hospital/GP informaton sector in Innovaton South is essental to that. The systems, and food producton and security are South has a very strong concentraton of large regional strengths. University Hospital Southampton corporates within this sector, including signifcant achieved natonal recogniton in 2016 as an IT internatonal players such as Fujitsu, Huawei, Centre of Excellence and is improving ways of using Microsof, and IBM. There are several signifcant and patent data. The Kent, Surrey and Sussex AHSN6 high profle clusters of digital companies, including is partcipatng in one of fve natonal ‘test bed’ areas with a notable concentraton of high growth initatves to assess the potental for new technology digital frms: Bournemouth & Poole, Brighton, and in health and social care, and devices have been Guildford. The “prize” of a Digital Catapult located tested at the 5G Innovaton Centre. in Brighton is testmony to the area’s innovaton culture. The region is demonstratng the vast There are around 500 Medical Technology opportunites to apply digital technologies across businesses across Innovaton South in disciplines a raf of sectors and services, such as FinTech & ranging from medical imaging to oncology7. HealthTech using cross cutng applicatons to Prosthetcs and Orthotcs is a regional specialism. diversify their business. The global company, Blatchford, based at Basingstoke, developed the frst commercially available microprocessor controlled prosthetc knee.

6Academic Health Science Network iv 7Ofce for Life Sciences (2016), Strength and Opportunity 2016: The landscape of the medical technology and biopharmaceutcal sectors in the UK; University of Southampton Insttute for Life Sciences Technologies to control bacteria and pest threats, the cutng edge of the revoluton in transport which and the of use of data and connectvity to ensure is underpinned by connected digital and automated safe, efcient and sustainable food producton vehicle technologies. are also being exploited by organisatons such as University of Reading’s Agrimetrics, the global life CHALLENGES TO SUSTAINING GROWTH AND science companies, Bayer and Syngenta, and the Pirbright Insttute. MAXIMISING INNOVATION This Audit confrms Innovaton South has world In these areas there is signifcant regional and class research and industrial capacity in a portolio natonal beneft to be gained from maximising links of fve powerful digital enabling technologies. It between innovaton actvites. also demonstrates these technologies are being deployed in four of the region’s high performing Advanced Engineering sectors to drive innovaton and growth. Innovaton South currently has, in general, a high performing economy and is a signifcant asset to the natonal The South has specialisms in the high-value, economy. It is in a strong positon to step up to the innovaton-intensive end of engineering, and its challenges ahead. advanced engineering capabilites are at the centre of the UK’s defence and aerospace sector, where Its global businesses, rooted here, its export the UK has a strong comparatve advantage. There trade, underpinned by its internatonal transport are world-class and outstanding research strengths. connectons, are a stand out feature of the Southampton and Surrey universites take the UK success of Innovaton South. Its labour market number one and two slots for partcular felds atracts, and currently relies on access to, high of engineering research. Others are also high skilled internatonal talent. As the UK reshapes performers, including Greenwich, Portsmouth, and its internatonal relatonships, it is critcal every Sussex. opportunity is seized to preserve and enhance each of these factors in the region’s success. Innovaton South has a concentraton of internatonally-signifcant engineering businesses, However, this Audit has also emphasised future with a large number of aerospace & defence levels of compettveness for both Innovaton South, companies around Farnborough in Hampshire. and its contributon to the wider UK, depend on Other types of leading-edge and research-intensive realising a number of ambitons. This high skilled, engineering frms are well-represented: Ricardo, high wage region is also high cost. Housing and in Shoreham supplies the McLaren Formula One commercial property prices and shortages hold back team, based in Woking and there is a huge array business growth in parts of the region, and natonal of specialist engineering SMEs with high demand and local eforts to relieve this should contnue to be for Digital Enabling Technologies. At Bournemouth a priority. Similarly, reliable and efcient road and Aviaton Park, for example, there is a concentraton rail connectons with London (and the rest of the of aerospace and advanced engineering frms, UK) and east-west across the South are necessary including Cobham, Meggit and Magellan conditons for maximising the region’s prosperity. Aerospace. In a high cost, high value economy there is a The South’s world-class strengths in engineering relentless need to innovate to compete. This Audit research, are closely connected with the shows that in each of Connected Digital, Marine & region’s outstanding strengths in Digital Enabling Maritme, Bio Science and Advanced Engineering, Technologies. For example, Innovaton South there is arguably an imperatve and certainly great research organisatons, TRL, the UK’s Transport potental for Innovaton South to deploy Digital Research Laboratory and Thatcham Research, the Enabling Technologies to drive both cross-cutng motor insurance automotve research centre, are at and sector focused innovaton. The preparaton of

v this Audit has sown the seeds of a stronger culture Five recommended opportunites have been of regional collaboraton and emphasised the value identfed to realise these aspiratons and the of this to maximise the region’s potental. It has Innovaton South Consortum is ambitous to take been widely acknowledged that this collaboraton these forward: must include businesses, universites, colleges and the public sector working more efectvely together, to share ideas and resources which will make the most of the region’s advantages in digital enabling technologies and their applicaton.

OPPORTUNITY 1 KNOWLEDGE-TO-MARKET ACCELERATOR

Enhancing collaboraton between business, industry, universites, & other research expertse to maximise the commercial applicaton of digital enabling technologies and ensure Innovaton South is among global leaders in innovaton in the digital, marine, health and life science and advanced engineering sectors.

OPPORTUNITY 2 LINKING INNOVATION HOTSPOTS

Complementng the frst opportunity by enhancing, replicatng and expanding the South’s excellent “innovaton hotspots” (e.g. SETsquared, Wired Sussex and SinC) to develop a more powerful innovaton network across the South driving new growth, underpinned by digital enabling technologies.

OPPORTUNITY 3 QUANTUM SUPPLY CHAIN INITIATIVE

Helping to build capacity and presence in the development of products using quantum technology in readiness for signifcant commercial demand. This project will not only improve the supply chain for current research into quantum technologies, but will also develop the industrial capacity needed to support the producton of the frst quantum products once the technologies are market- ready. The strength of defence-related actvites in the region will provide an important foundaton for this project.

vi DEVELOPING SME ENGAGEMENT WITH THE 5G INNOVATION OPPORTUNITY 4 CENTRE

Building the capacity and reach of the 5GIC even further, unlocking a new generaton of high growth digital businesses in the South and other UK regions, SME 5G ft for a global compettve market. This opportunity complements 1 & 2, and extends these facilites to SMEs and companies across the South and in other UK regions.

ADVANCED & SPECIALIST SKILLS IN DIGITAL OPPORTUNITY 5 TECHNOLOGIES

Securing a supply of high calibre digital talent which will be critcal to realising the signifcant growth potental of applying digital enabling technologies. Fresh thinking is required to address the needs and responsibilites of employers, and ensure competton between providers does not frustrate the end goal. This project will champion and promote career opportunites linked with digital enabling technologies, provide a clearer skills evidence base which can be used by industry bodies, universites and further educaton, and ofer a brokerage service, linking SMEs with new entrants to industry from the region’s universites and further educaton colleges.

vii 1. INTRODUCTION - INNOVATION SOUTH: A WORLD LEADER IN THE SCIENCE AND COMMERCIAL APPLICATION OF DIGITAL ENABLING TECHNOLOGIES

1.1 Innovaton South8 stands out in the UK for its • To demonstrate the positve impact and expertse across a range of key digital enabling resonance of Innovaton South on other UK technologies. In this region, world class science regions/natons, and identfy areas where new in a suite of technologies, is blended with collaboratons and partnerships could drive the globally outstanding skills in digital creatvity UK’s economic compettveness. During this and design, and applied across a strong and process, Innovaton South has engaged with diverse business base to drive marketable other Science and Innovaton Audits, namely innovaton. The result is already a high growth, Leeds City Region on Med Tech, Glasgow high value, highly successful knowledge- Economic Leadership on Quantum, and based regional economy but the potental Oxfordshire on transformatve technologies. for further innovaton and growth if all assets Informal engagement has been facilitated by are successfully integrated is outstanding. South East LEP’s direct interest in two Audits: Sustaining the success of Innovaton South, East of England and Innovaton South. These and driving its innovaton-led productvity linkages are set out in more detail in Annex E. even further, is critcal to the success of the UK’s digital economy and the naton’s • To capitalise on the evidence collected compettveness in global markets. and, looking forward, devise actons and interventons which will maximise the potental 1.2 This Science and Innovaton Audit (SIA) of Innovaton South in line with the principles has presented a golden opportunity to and ambitons set out above. evidence and bring into sharp focus the defning strengths of Innovaton South in 1.4 The specifc focus of this Science and digital enabling technologies; enhance an Innovaton Audit report is the region’s understanding of how those individual capacity to commercially exploit its excellence strengths could be consolidated to create in a portolio of fve mutually supportve step changes in capabilites; and to allow this digital enabling technologies. The Audit insight to inspire conclusions and cost efectve tests the hypothesis that while others may recommendatons for taking the region and its share strengths in individual technologies, outstanding assets further. Innovaton South stands out for the number and breadth of digital enabling technologies, 1.3 At every step, we have been wide and and their widespread applicaton. These inclusive in our enquiries; always looking for are underpinned by world class research, proof, avoiding preconceptons and challenging supported by centres of excellence in digital assumptons. The Innovaton South Science creatvity and adopted by a successful stock of and Innovaton Audit has been underpinned regionally-based, innovatve businesses in four throughout by several guiding principles: high-tech sectors: Connected Digital, Marine and Maritme, Bioscience, and Advanced • To highlight the excellence of the science and Engineering (see Figure 1 1). innovaton capabilites of Innovaton South

• To identfy how the region’s outstanding capabilites in digital enabling technologies are applied, and drive marketable innovaton across every part of Innovaton South

8 Innovaton South covers much of southern England. The region extends along the south coast from Dorset to Kent and north to the edge of London. It is defned in terms of fve complete Local Enterprise Partnership areas (Thames Valley Berkshire, Enterprise M3, Coast to Capital, Solent and Dorset) plus that 1 part of South East LEP’s geography which is south of the Thames (East Sussex and Kent & Medway). Connected Digital

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Innovaton South: outstanding strengths in digital enabling technologies applied in four key sectors

1.5 It is testmony to both the entrepreneurial through to SMEs, research organisatons, ambiton of the region, and confdence including 16 universites, innovaton and in its potental, that the Innovaton South enterprise networks, local authorites and Consortum embraces well over 100 economic partnerships. All are bound by individuals and organisatons. The group’s their commitment to Innovaton South as a strength is notable for its diversity, coming world leader in the science and commercial from all parts of the region and public and applicaton of Digital Enabling Technologies for private sectors. It includes a large body of the beneft of the whole UK. businesses and enterprises from multnatonals

2 1.6 As of June 2017 a series of meetngs have “the greatest future opportunites lie in taken place with BEIS, regional LEPs and the enabling existng and emerging technologies Innovaton Strategic Steering Group to discuss to interact with each other… Our lives are a) developing the profle of the Innovaton being increasingly infuenced by several closely South region and b) implementng the related classes of technologies that allow us to opportunites identfed by the SIA. There is sense, detect and measure what is happening clear support and ambiton to do both. around – and within – us; connect and collect the data that are being sensed or gathered WHAT ARE “DIGITAL ENABLING TECHNOLOGIES”? from other sources; combine and mine this data to produce fresh understanding; and 1.7 Digital Enabling Technologies relate to the make this understanding accessible to inform collecton, processing, transportaton, use and both our individual and social actvites”. protecton of data. In its report, “Technology and Innovaton Futures 2017”, the Government 1.8 The Innovaton South region has world-leading Ofce for Science stated that: research strengths and innovaton capabilites in fve main Digital Enabling Technologies:

Digital Enabling Technologies

3 2. INNOVATION SOUTH – ENGLAND’S GLOBAL REGION

CHAPTER 2 – KEY MESSAGES

• Innovaton South is a global region and a natonal asset • Export performance is strong; levels of internatonal ownership are high; its labour market atracts high skilled internatonal talent • The region benefts from good internatonal and natonal connectvity • Innovaton South is a powerhouse of research strengths, matched by a strong culture and ethos of enterprise and innovaton • There are 16 universites and many high profle, internatonally renowned research insttutons • Corporate investment in R&D in Innovaton South is high • The region is entrepreneurial and has a strong track record in commercialising research • The South is a dynamic region for business growth with a highly skilled workforce whose productvity exceeds the natonal average • There are challenges to rise to, risks to confront and opportunites to grasp in order to preserve, spread, and enhance the high performance of Innovaton South both within the South and across the UK

Innovaton South: Key assets

4 INTRODUCTION As this Audit demonstrates, the South contains world class science and innovaton 2.1 Stretching from Dorset to Kent and from capabilites and there is vast potental and Berkshire to the Isle of Wight, Innovaton incentve to build on existng strengths for South covers a large part of southern England, commercial exploitaton. The economy is and has a total economic output of £225.3 highly internatonalised (as evidenced in, for billion9. It is a sizeable economic area: to put example, internatonal businesses maintaining it in context, it accounts for 13.7% of the UK’s global or European headquarters in the output10 and in scale is almost equivalent region), and benefts from its proximity to to the whole of Denmark11. The region London and its infrastructure. There is a strong includes two Natonal Parks and many Areas base of both corporates and SMEs. It is a high of Outstanding Natural Beauty, earning the value economy meaning the costs of both South a reputaton for a quality of life, which employment and housing are also high21 and is a magnet for some businesses and their these provide a strong incentve for relentless workforce. innovaton, wealth creaton and growth. This Audit fnds good evidence that the South’s 2.2 It is a dynamic region for business growth. capabilites in digital enabling technologies The concentraton of actve enterprises is and their applicaton are helping to drive well above England’s average across most of commercial growth. the area12, as is the incidence of high growth frms13. It is also a locaton for numerous 2.4 The Innovaton South region and its economy internatonal corporatons, which enjoy are diverse. It encompasses six local enterprise the advantages of the region’s proximity partnership areas (Coast to Capital, Enterprise and connectvity to London and access to M3, Dorset, Solent, the Kent and East Sussex internatonal markets as well as access to part of the South East, and Thames Valley internatonal markets via the South’s airports Berkshire). There is no single dominant urban and ports, including Heathrow, Gatwick and centre – although the region is shaped by a Southampton. close relatonship with London, and benefts from proximity to this dynamic and growing 2.3 With a populaton of over 8.6 million, more world city. There are strong commutng fows than one in ten people in the UK live here14. in both directons and London contnues to 5.3 million are of working age15 and the region be a major fnancial centre; the seat of UK provides more than one in ten of the UK’s Government; a business hub; and a focus jobs16. The Innovaton South workforce is, in for outstanding science in its own right. The general, highly qualifed17 and the proporton strengths and potentals of the South are of those working in science, research, signifcantly infuenced by its relatonships with engineering and technology is well above London, and the links beneft both economies. the natonal average18. Average earnings are higher than England as a whole19. In parts of 2.5 Innovaton South has a rich diversity of the region, productvity levels are well above industry, business and enterprise. This diversity England averages20. is a strength, which underpins a fexible and resilient economy. It is also a challenge in that expertse and innovaton assets and actvity are

9ONS, Regional and Sub-regional Productvity, based on NUTS3, 2015 10Ibid. 11OECD, Regional GDP, 2014 12ONS, Business Demography, 2016 13ERC Growth Dashboard data, high growth frm incidence rate (by LEP), 2012-15 (sourced via Technopolis core data) 14ONS, 2015 mid-year populaton estmates 15ibid 16ONS, Business Register and Employment Survey, 2015 17ONS, Annual Populaton Survey, 2016 18ONS, Business Register and Employment Survey, 2015 19ONS, Annual Survey of Hours and Earnings, 2015 20ONS, Sub-regional productvity, 2016 5 21ONS, Annual Survey of Hours and Earnings, 2015; Land Registry, UK House Price Index, 2017 widely distributed. Interventons that aim to improve the connectvity between these assets 2.8 There are around 4.3 million jobs within the and create greater scale and efectve critcal South25. London is an important employment mass, which would unlock further growth in destnaton for many residents in the South commercial innovaton – are a key ambiton and the “commuter class” pushes up the of this Science and Innovaton Audit and its employment rates of the working populaton. outcomes. Achieving growth in a relatvely tght labour market is likely to reinforce pressures to 2.6 There are strong links between businesses innovate to increase productvity. and the 16 universites across Innovaton South. A diverse SME and corporate base The South has a highly skilled workforce beneft from an equally diverse group of excellent specialist research insttutons and 2.9 The Innovaton South workforce is educated universites across the South as well as world- to a higher level than the natonal average. leading incubaton and acceleraton facilites. Some 38% of the working age populaton in Together, these organisatons share globally Innovaton South is qualifed to degree level or recognised excellence in scientfc research; equivalent (NVQ4+), as opposed to 37% across commercially adopted applicaton of research England. 58% of the South’s workforce have and customer focused design; and industry at least 2 A’ Levels or equivalent; the England accredited excellence in the delivery of high- average is 56%. The region also has a lower level skills, including industry backed PhDs, than average proporton of its workforce with pioneering digital degree apprentceships, and no qualifcatons26. specialist expertse in the creatve industries. During the collecton of evidence for this 2.10 As Figure 2 2 illustrates, the distributon of Audit, the frustrated desire of business and higher workforce qualifcatons broadly refects higher educaton stakeholders to further widen the distributon of higher productvity levels and strengthen collaboraton was a recurring described above. theme. It underlines the case for investment in acton, which would facilitate a growth in working alliances to drive innovaton. PRODUCTIVITY, BUSINESS AND INNOVATION IN THE SOUTH

Leading the way on productvity and talent

2.7 In the South, overall productvity is ahead of the UK average22. The South has consistently maintained a productvity lead over the past decade, with growth rates tracking the natonal average. However, productvity rates diverge substantally across the region and do not all match the partcularly high levels in Berkshire23, Surrey, West Sussex and north Hampshire. This level is refected in higher than average wages in those areas24.

22Productvity, measured as gross value added (GVA) per hour worked, was £29.30 in the Innovaton South area and £27.90 in the UK as a whole in 2015 (ONS Regional and Subregional Productvity, January 2017 release. Innovaton South data based on NUTS 3) 23Berkshire GVA per hour worked was £36 in 2015 24ONS, Annual Survey of Hours and Earnings, 2015 25The overall jobs density rato (i.e. the number of jobs available divided by the resident populaton aged between 16 and 64) of 0.81 (Technopolis core data). This is roughly the same as the natonal average 26ONS Populaton Survey via Technopolis 6 Figure 2 2: Proporton of the working age populaton qualifed to NVQ4+

The South has high levels of scientsts, engineers to maintaining, spreading and enhancing the and technology experts highly skilled workforce which is a hallmark of Innovaton South. 2.11 Across the South, around 6.7% of the workforce is employed in science, research, Innovaton South - intrinsically internatonal engineering and technology occupatons, compared with around 5.4% natonally. The economy of the South is strongly Employment in these occupatons is ‘internatonalised’, with impressive levels of partcularly high in Reading, where they foreign investment and a strong exportng account for around 15.8% of all employment, culture and in neighbouring parts of Thames Valley Berkshire27. 2.13 The South has an internatonally-focused economy. Historically, global businesses 2.12 Qualitatve evidence collected during this Audit have chosen the region to locate their UK through expert workshops and an open call for and European headquarters. Thames Valley evidence suggests businesses underpinned by Berkshire, for example, hosts a concentraton digital enabling technologies for their growth of telecoms and IT companies, including and innovaton face partcular challenges in Microsof, Telefonica, Fujitsu and Oracle, which fnding the specialist skills they need. This, beneft from good transport connectvity and together with the regional variaton in the proximity to London. prevalence of highly qualifed employees, signals the need for a very targeted approach

27ONS Annual Populaton Survey, via Technopolis. Data relates to the proporton of the resident workforce employed in these occupatons – some of whom 7 will be employed in other locatons. 2.14 Overall, the region has by far the largest share 2.15 There is a strong export culture among of FDI projects in the UK outside London. businesses. The South East accounted for Over the fve years to 2016, the South East £37.8 billion in exports in 2015, 14% of the region accounted for 1,029 FDI projects, UK’s total exports30. However, the region’s around 11.5% of the UK total28. There is much share of the UK’s exporters is even higher, a variaton within the geography of Innovaton litle over 18%, refectng a high propensity South: Thames Valley Berkshire performs among businesses in the South East to export. very strongly and in 2012/13 had the highest Locally there is again some variaton. Data number of FDI projects across any LEP area from the LEP Network suggest that 41.7% of other than London (see also Box 2-1); but in Solent LEP’s market-based establishments the same year, the fgure in Dorset placed it with 10 employees or more exported in 2010 among the ten poorest performing LEP areas in and the fgure for Thames Valley Berkshire England29. LEP was 36.3%, compared to a UK average of 33.0%; however it was lower for South East LEP (26.6%) and for Dorset (28.6%)31.

BOX 2-1 INWARD INVESTMENT INTO THAMES VALLEY BERKSHIRE

The north of the Innovaton South region – partcularly Berkshire – has long been a key focus for UK inward investment and is home to a large number of global ICT businesses.

Data gathered by Thames Valley Chamber of Commerce suggest that in 2015/16, there were 67 Foreign Direct Investment projects across Berkshire generatng almost 1,800 new jobs – more than three tmes the number created in Oxfordshire through the same FDI process over the same period.

In its report, the M4 Corridor was identfed as the preferred locaton for many of the world’s most famous informaton technology and electronic communicatons businesses, notably Canon, Cisco, Computer Associates, Dell, Huawei, Microsof, Telefonica and Vodafone. Several innovatve disruptve technology frms – like Redwood Technologies, Bullit Group, Reacton Engines, 3D Systems and Raw Talent – were also recognised. Slough was described as a “mega cluster” in recogniton of the 22 datacentres located on SEGRO’s industrial estate.

Looking ahead, the Chamber fagged the existng strength – and on-going investment – in connectvity. Heathrow Airport is key. In additon, Berkshire will beneft from investment in Crossrail (journey tmes from Maidenhead to Canary Wharf will be less than an hour); Western Rail Access to Heathrow; Smart M4; and £895m reinvestment into Reading railway staton, which is helping to secure its positon as a major rail hub.

[Source: Inward Investment Results (2015/16), Thames Valley Chamber of Commerce Group (October 2016)]

28Department for Internatonal Trade (2016), FDI projects by UK region for 2011/12 to 2015/16. Note that the South East region covers the Innovaton South area minus Dorset, plus Buckinghamshire, Oxfordshire and Milton Keynes. It is larger than the Innovaton South area, but is the nearest geographical approximaton for some data produced at regional level. 29Data from LEP Network Report, 2014 (sourced from then-UKTI) 30Department for Internatonal Trade (2017), Regional Goods Export Data 31Data from the LEP Network Report, 2014 (sourced from Harris, R (2013), Inward Investment and Exportng in the LEPs: Report to BIS, September 2013, based originally on the Community Innovaton Survey, 2010) 8 Innovaton South - place to set up business, grow Innovaton South universites are world class in and innovate important areas of scientfc research

The South has strengths in science and 2.18 The 2014 Research Excellence Framework, innovaton-intensive business actvity the latest ofcial assessment of the quality and impact of university research, shows 2.16 There are around 391,000 actve enterprises in Innovaton South includes universites the Innovaton South area. This is equivalent conductng globally compettve research in to 45 enterprises per 1,000 residents, higher science and technology. Analysis of university than the natonal average32. The numbers research actvity rated 4* (world class in terms of businesses set up outweigh the numbers of originality, signifcance and rigour) reveals which fail. Start-up rates are higher than the high scores in areas including engineering, natonal average in most parts of the South, computer science and informatcs and and the proporton of high-growth frms within bioscience35. the business populaton is also higher than average33. Growth in the overall business stock 2.19 The Innovaton South area includes several has broadly followed the natonal trend over specialist research insttutons. Of partcular recent years. relevance to this Audit are the Natonal Physical Laboratory, managed in partnership 2.17 Adding to the evidence of the region’s with the University of Surrey; the Chilbolton outstanding capacity in digital enabling Observatory at Stockbridge, owned by the technologies, the South scores partcularly Science and Technology Facilites Council; highly on measures of relatve concentraton the Atomic Weapons Establishment at by business unit or employment (locaton Aldermaston; TRL, the Transport Research quotents) in computer programming, Laboratory at Crowthorne; and several consultancy and related actvites; research facilites focused on plant and animal telecommunicatons; scientfc R&D; and the health, including the Pirbright Insttute near manufacture of computer, electronic and Woking, the Animal and Plant Health Agency at optcal products34. Weybridge, and NIAB-EMR near Maidstone.

TRL Autonomous Shutle Bus, Greenwich Gateway Project

32ONS business demography 2015. There are around 39 businesses per 1,000 residents in the UK as a whole. 33Technopolis core data 34BRES/ IDBR, analysed by Technopolis 35See Annex F 36Technopolis (2017), Innovaton South: Analysis of research actvity and main collaboratons. For example, while insttutons in the Innovaton South area partcipated in just under 14% of all UK projects funded by the Research Councils, Innovate UK and European research programmes, they were engaged in 9 19% of cyber security projects. 2.20 According to analysis of publicly-funded The region is entrepreneurial and has a strong research and innovaton actvity involving track record in commercialising research business and universites, the South ‘punches above its weight’ in winning backing for Digital 2.23 The concentraton of start-ups and high Enabling Technologies innovaton projects36. growth frms in Innovaton South is well above average for England across most of the area39. Corporate investment in R&D is high There is also good evidence of businesses emerging from the region’s universites 2.21 In the South, many corporates are engaged in and research insttutons to commercialise publicly-funded research actvity. For example, research. For example, at Surrey Research in cyber security, recent analysis found that Park, technology frms such as SSTL and Hewlet Packard, Thales Group, BAE Systems, Detca (now BAE Systems Applied Intelligence) Intel, Cisco Systems and Microsof had all began as start-ups making use of university partcipated in funded research and innovaton research, and have since grown into major actvites in the region. In relaton to quantum internatonal businesses, stll carrying out their applied to advanced engineering, there have R&D in the South. The South also hosts the been publicly funded research collaboratons commercialisaton arm of Dstl (Ploughshare with ARM, Dstl, QinetQ, NXP Semiconductors Innovatons, based at Stockbridge) and hosts a and the Natonal Physical Laboratory37. number of successful spin-outs.

2.22 Commercial business expenditure on research 2.24 The region contains an extensive innovaton and development in the Innovaton South support infrastructure. A key – and distnctve area is high. The best available evidence is – part of this is SETsquared, “the Global # 1 Government’s fgures for the standard ‘South University Business Incubator”40. It has been East’ region - the nearest approximaton operatng for well over a decade and its work is to Innovaton South. With this in mind, the widely applauded. It is focused around two of South East accounted for the highest level the region’s 16 universites, and has supported of business enterprise expenditure on R&D the process of spin-of and growth helping for any region or naton in the UK - a total to create new generatons of businesses, expenditure of about £4.7 billion which is partcularly in and around Guildford and 22.5% of UK business enterprise expenditure Southampton. on R&D in 201538. Major commercial research and development facilites in Innovaton 2.25 The Sussex Innovaton Centre (SinC) runs South include those operated by QinetQ two incubaton hubs in the South, one at the at Farnborough, Ordnance Survey Ltd at University of Sussex and one to support the Southampton, IBM at Fareham, BAE Systems fast-growing tech sector in Croydon. SinC and Surrey Satellite Technology Ltd (SSTL) plans to open another in Brighton soon and at Guildford, Airbus Defence and Space at a Bio-Innovaton Centre at Sussex University Portsmouth, Ricardo at Shoreham, NATS at by 2019. The region contains six Enterprise Fareham, Thales UK in Reading and the many Zones and 13 science parks and innovaton major ICT hardware and sofware frms (such centres supported by the UK Science Parks as Fujitsu and Oracle) in the Thames Valley. Associaton (UKSPA). Growth hubs supported by the LEPs add to the large and extended family of Innovaton South business support organisatons.

37Technopolis (2017) 38Data sourced through a study conducted for then-BIS found that Thames Valley Berkshire was the fourth highest ranking LEP area and Enterprise M3 was the seventh highest on “Business Enterprise R&D Expenditure (BERD) by Full Time Equivalent (FTE)” in 2013. Source: Mapping Comparatve Advantages in Innovaton – study by Liverpool John Moores University for the Department for Business, Innovaton and Skills, March 2015 39ERC Growth Dashboard for LEPs, 2015 (via Technopolis core data) 40UBI Global Top University Business Incubator and Accelerator World Rankings 2015. UBI Global provides access to business incubaton data & networks to help incubators and their partners benchmark themselves to become more efcient and compettve. 10 BOX 2-2 SETSQUARED

The SETsquared Partnership is an enterprise collaboraton between the universites of Surrey, Southampton, Exeter, Bristol and Bath, established 15 years ago. The organisaton is focused on the commercialisaton of the universites’ research and promotng entrepreneurial actvites in them and their surrounding regions. SETsquared focuses on three areas:

• Student Enterprise – promotng entrepreneurship within the universites • Research Commercialisaton – promotng technology licensing, spin-out companies and research collaboratons with partner companies • Business Incubaton and Acceleraton – incubatng spin-out companies and start-ups in the regions

Each of the fve universites hosts a Business Acceleraton Centre, providing physical space and entrepreneurial business support to early-stage technology ventures with high-growth potental. A ffh of the companies incubated are university spin-outs., and in its 15 years, SETsquared has assisted more than 1,000 high-tech, high-growth ventures, which have raised £1billion of investment and created 9,000 jobs.

investment 1,000 £1bn raised 9,000 high-tech, high- jobs created growth ventures

SETsquared created and is pilotng the Innovaton and Commercialisaton of University Research (ICURe) program which enables market validaton of research outputs and more rapid commercialisaton of research. To date over 100 research teams from 30 UK universites have benefted.

SETsquared runs a number of open innovaton actvites engaging major corporatons, the NHS and other stakeholder in using university research for the expansion of the UK economy and enrichment of society. In the most recent University Business Incubators (UBI) ranking of 3000+ business incubator worldwide, SETsquared is the Global #1.

An economic impact assessment completed by Warwick Economics and Development concluded that cumulatve GVA of £306m could be atributed to SETsquared between 2002 and 2014, and 1,100 jobs in 201441

41Estmatng the Economic Impact of SETSquared Partnership. Report for SETSquared Partnership by Warwick Economics and Development, November 2014 11 The South enjoys good connectvity - an important map in Figure 2-3 below, showing desired magnet for businesses and their staf improvements to the road and rail networks, was prepared in the region for the Natonal 2.26 The South is extremely well connected - a key Infrastructure Commission and illustrates factor in many business decisions to locate some of the key transport investment and grow here42. Internatonal connectons priorites. Economic actvity in Dorset (not are excellent, with good access to the main represented on this map) is also hampered internatonal transport hubs of Heathrow and by poor infrastructure44. A focus on East West Gatwick; as well as domestc and European infrastructure is key to the highest performing airports at Bournemouth and Southampton integrated economy across the South and and internatonal rail via Ebbsfeet and signifcant improvements to regional and Ashford. The region’s ports, including Dover, natonal transport systems can be achieved Newhaven, Portsmouth and Southampton, and by developments in digital technologies and Eurotunnel via Folkestone are also signifcant advanced engineering, both subjects of this gateways for freight and passengers. Audit.

2.27 Road and rail links to London are good and 2.28 The provision of digital infrastructure is easy access to London, a highly valued source somewhat beter than in the rest of the UK: of customers, fnance and two-way supply download speeds are, on average, marginally of skilled labour is a major asset. However, faster, and around 93% of premises are able roads are ofen congested; trains are ofen to access broadband speeds of 30 mbps overcrowded and, within the region, east-west or greater45. However, substantal parts of connectvity is less efcient, both by road and the region – not all in rural or peripheral rail. It is widely accepted that congeston, areas – stll experience weaker broadband inhibitng the movement of people and goods connectvity46. directly afects productvity and growth43. The

Eurotunnel via Folkestone

42TVB, EM3, OxLEP, Bucks Thames Valley (2013), London Heathrow Economic Impact Study 43DfT (2016), An introducton to the Department for Transport’s road congeston statstcs 44Dorset LEP (2014), Transforming Dorset: Strategic Economic Plan, p.36 45ThinkBroadband, via Technopolis core data 46ThinkBroadband, 2016 12 Figure 2-3: South East road and rail requirements (NIC discussion January 2017)

Figure 2-4: Average broadband speeds

13 LOOKING FORWARD 2.30 What further evidence supports the region’s strengths and will help create even clearer 2.29 This ‘snapshot’ of the South’s economy routes from research to commercialisaton? highlights a region that is internatonally- Our Audit assumes the region’s expertse in focused with high commercial engagement in Digital Enabling Technologies, both within research and development and a highly skilled academic research and industry, will enable workforce. These factors, combined with good the South to take advantage of the disruptve connectons to London contribute to levels of impact their development will have on many productvity and GVA per capita that are higher high-tech sectors thriving in the region. The than the natonal average. The evidence so following chapters test this – focusing frst far already points to areas where the region’s on the technology and the South’s strengths capacity to innovate might be enhanced: in developing it, and second on its impact in facilitaton of wider collaboraton; stronger the connected digital, marine and maritme, connecton between innovaton support bioscience and advanced engineering sectors. networks; a specialist skills strategy, ft for the region’s focus on digital technologies.

London City

42TVB, EM3, OxLEP, Bucks Thames Valley (2013), London Heathrow Economic Impact Study 43DfT (2016), An introducton to the Department for Transport’s road congeston statstcs 44Dorset LEP (2014), Transforming Dorset: Strategic Economic Plan, p.36 45ThinkBroadband, via Technopolis core data 46ThinkBroadband, 2016 14 3. SCIENCE AND INNOVATION STRENGTHS IN DIGITAL ENABLING TECHNOLOGIES

CHAPTER 3 – KEY MESSAGES

Innovaton South has world class credentals in relaton to a suite of Digital Enabling Technologies relatng to the collecton, processing, transportaton, use and protecton of data

It has outstanding research strengths in universites, research insttutons and in the commercial sphere in each of photonics; digital communicatons (including 5G); cyber security; and quantum

This combinaton of pioneering science in a range of Digital Enabling Technologies blended with outstanding skills in digital creatvity and design makes Innovaton South an exceptonal asset for the UK

These research strengths are being successfully commercialised and over the next decade they can transform many aspects of social and economic life including the delivery of public services and industrial productvity

The advance of the global digital economy brings with it many challenges ranging from ethical issues around data to technical challenges linked to security. Organisatons in the Innovaton South region are leading the development of responses to those global challenges.

INTRODUCTION

3.1 Innovaton South has world-class credentals in a suite of Digital Enabling Technologies (see defnitons in paragraph 1.7 above). These technologies are underpinning a revoluton which will transform almost every sphere of economic, cultural and social life.

3.2 These credentals – and the over-arching priority atached to Digital Enabling Technologies by Innovaton South – are consistent with UK government priorites, as summarised below.

LED light movement

15 BOX 3-1 NATIONAL PRIORITIES FOR DIGITAL ENABLING TECHNOLOGIES

The UK government has clear ambitons about how Digital Enabling Technologies should develop and these are artculated in several policies including the green paper, Building our Industrial Strategy (published in January 2017), and in the UK Digital Strategy 2017 (published in March 2017), Next Generaton Mobile Technologies – A 5G Strategy for the UK (published in March 2017), and in the latest Technology and Innovaton Futures report (published January 2017). Main points include:

• Identfying digital technology enablers to drive long-term economic growth and productvity. The latest Technology and Innovaton Futures report concludes that “The greatest future opportunites lie in enabling existng and emerging technologies to interact with each other”.

• Building World Class Digital Infrastructure. The UK has good broadband and mobile infrastructure given its size and the nature of geography. However, some gaps need to be addressed. The roll-out of superfast broadband is on-going and will reach 95% household coverage by the end of 2017. However, the UK is far behind other developed natons in the deployment of fbre to premises. The Natonal Infrastructure Commission is looking at the most advantageous approach to broadband technology deployment. Digital infrastructure is also seen as critcal to other sectors so the digitalisaton of the railway signalling system is a priority.

• Improving the data infrastructure. Physical infrastructure is insufcient to allow the digital economy to fourish. The communicatons over that infrastructure need to be safe and secure. This will give people the confdence to be part of the digital world, as well as giving the UK a signifcant compettve advantage. The Government has set up the Natonal Cyber Security Programme to facilitate secure digital interacton.

• Widespread access to digital Skills. Shortage of digital skills is a constraint not just on digital industries but on most sectors that use digital technologies intensively (banking and fnance, creatve industries, transport, retail, etc.). An across the board improvement is needed in STEM (science, technology, engineering and mathematcs) subjects, specifc digital skills such as coding, and developing understanding and skills throughout business to allow sophistcated business to business digital transactons that will greatly improve efciency in the economy.

• Industrial Digitalisaton. Juergen Maier (UK CEO of Siemens) will undertake a review of industrial digitalisaton to consider how the UK can beneft from the accelerated adopton of digital technology across advanced manufacturing.

• Commercial opportunites for Artfcial Intelligence. This review, led by Professor Dame Wendy Hall FRS FREng, Regius Professor of Computer Science, University of Southampton and, Jérôme Pesent, CEO of BenevolentTech, will consider how to capitalise on the UK’s world leading status in the science underpinning AI.

• Encouraging digital business. This is a two-pronged approach with support being put in place for new digital businesses to start and grow. The Government also wants to support the deployment of appropriate digital technologies across all businesses.

• Focus on key digital areas. The Government has identfed supercomputng, advanced modelling and 5G networks as areas where the UK has strengths and which should be supported to ensure world class-performance in these areas contnues.

16 BOX 3-1 CONTINUED

• Maintaining the positon of the UK government as a world leader in digital government. Initatves such as gov.uk have dramatcally improved the way that citzens and organisatons interact with government. Whole rafs of interacton from tax returns to passport applicatons have been digitsed making the process less expensive and more efcient. Government procurement has also been transformed with digital methods opening up signifcant government contracts to many more SMEs than was previously the case.

INNOVATION SOUTH’S SCIENCE AND INNOVATION amounted to 31.3m euro from 2014-201748 STRENGTHS IN DIGITAL ENABLING TECHNOLOGIES • Organisatons within Innovaton South accounted for 20% of the innovaton grants “The analysis using natonal and internatonal (by value) ofered by Innovate UK across the research funding data over the past ten years UK in the digital domain; and 15% under the shows the Innovaton South area has above heading of ICT49 UK average concentratons of research and innovaton actvity in the areas of Marine & • Inventors within the geography of Innovaton maritme, Connected Digital and Advanced South were responsible for 16% of UK patents engineering, and in the enabling technologies in the sphere of “digital communicaton”50 of Cyber Security, Photonics, Big data, and This demonstrates that the region accounts Digital communicatons (5G). To that end, for a signifcant share of the entre UK asset Innovaton South can be viewed as “punching base, partcularly in those elements relatng to above its weight” in comparison to the UK as a inventon and innovaton. whole...” Technopolis Group, March 2017 3.4 Innovaton South is a big region. On key 3.3 On jobs, GVA, populaton – Innovaton South metrics, its share of science and innovaton accounts for approximately 13% of the UK assets within the ambit of the Audit is, in economy. This is a reasonable benchmark to general, bigger again. assess the strength of its asset base in Digital Enabling Technologies. The analysis suggests that: DIGITAL COMMUNICATIONS

• Over the period from 2004-2016, organisatons “The development of 5G presents a signifcant in the Innovaton South area accounted for economic opportunity and this world-leading £147m of UK Funding Councils’ research centre will positon the UK at the forefront funding targeted at “informaton and of research into the next generaton of communicaton technologies” (12% of the UK communicatons technology” Minister for total); and £31m focused on “optcs, photonics Science, Jo Johnson, at the formal opening of and lasers” (14% of the UK total)47 the 5G Innovaton Centre at the University of Surrey, 15 September 2015 • Organisatons within the geography of Innovaton South accounted for 15% of 3.5 In the domain of digital communicatons, European Commission funding (through the region stands out partcularly, in terms Horizon 2020) received in the UK linked to of the pioneering work led by the 5G the ICT programme; in absolute terms, this Innovaton Centre (5GIC). Based at the

47Source: Gateway to Research 48Source: E-Corda 17 49Source: Innovate UK 50Source: European Patent Ofce data, PATSTAT. University of Surrey, the 5GIC currently houses to fuse cutng edge science and research over 170 researchers, making it Europe’s actvites with industry and companies largest academic research group in mobile (large and small) to generate commercial communicatons and future internet. In 2016, ideas as well as the role of a local enterprise 5GIC was recognised by G7 natons as one partnership (in this case Enterprise M3) in of the global leaders driving the growth and bringing together public, private and HE promoton of a digitally-connected world. G7 partners. Key regional partners in additon ICT ministers highlighted the centre for its to Enterprise M3 LEP are: Digital Greenwich real potental to maximise the benefts of ICT (London); NE LEP (Northern Powerhouse); and to drive economic growth and employment Worcestershire LEP (Midlands Engine). Also, across the world51. Surrey is already collaboratng with a number of other Universites with expertse in 5G and 3.6 The 5GIC is based on a close collaboraton 5G applicatons in key sectors including health, between major internatonal corporates and transport, and creatve industries. Current academic researchers. In the view of SIA relatonships include, Bristol, Kings, Warwick, workshop partcipants, this mix of corporate Newcastle and Queens Belfast, with more interest and academic expertse is one that collaboratons planned. This broader network can be most successfully achieved in the South of actvity will help maximise the beneft due to the ideal balance of corporate and and impact of this investment for the UK. A SME/start up actvity in the region. The 5G synopsis of the 5GIC is provided below. Innovaton Centre provides a model of how

BOX 3-2 5G INNOVATION CENTRE

Formally opened in September 2015, the 5G Innovaton Centre (5GIC) in Guildford is a £75m industry-academic partnership. Key partners include EE, Huawei, O2, Vodafone, HEFCE, Enterprise M3 LEP, TEOCO Corporaton, BBC, BT, Cobham, Anite, Ascom, Digital Catapult, Fujitsu, Rohde & Schwartz, Samsung, Roke, McLaren Applied Technologies, Ofcom, Imaginaton Technologies, ITRI, MYCOM OSI, Three and Ordnance Survey.

The 5GIC provides practcal experimental facilites for researchers working on emerging 5G technologies covering mobile and wireless communicatons, the Internet of Things and connected cars52. As part of the University of Surrey’s Insttute for Communicaton Systems, 5GIC is the largest academic research group in mobile communicatons and future internet in Europe, with over 170 researchers, 25 contributng members and a network of 50 communicaton technology SMEs53.

Based around a 4km2 5G testbed, the centre also has dedicated laboratories which provide specialist facilites for network testng and management, and communicaton electronics54. In December 2016, 5GIC launched the 5G mobile network emulator at the Basing View innovaton hub in Basingstoke in partnership with SETsquared, Basingstoke and Deane Borough Council and high-tech start-up Gematech, with funding from Enterprise M3 LEP. The emulator will allow start- ups and businesses working on mobile applicatons to develop systems capable of operatng on the 5G system and will be accessed through SETsquared’s digital hubs as part of its Digital Business Acceleraton Hub programme55.

51See G7 Opportunites for Collaboraton – available at htp://www.japan.go.jp/g7/_userdata/common/data/000416960.pdf. See also notes from G7 ICT ofcials meetng, Brussels, 2nd December 2016 (meetng convened by Japan G7 Presidency. Chaired by Vice Minister Shigeki Suzuki and moderated by Yoichi Iida Director for Internatonal Research and Policy Coordinaton) 52University of Surrey 5G Innovaton Centre response to Innovaton South Science and Innovaton Audit Call for Evidence, March 2017 53University of Surrey 5G Innovaton Centre website, ‘About Us’ (accessed via: htps://www.surrey.ac.uk/5gic/about). Note that over the next 12 months, the plan is to increase the number of SME members to more than 100 54University of Surrey 5G Innovaton Centre website, ‘About Us’ (accessed via: htps://www.surrey.ac.uk/5gic/about) 55SETsquared website, ‘Pioneering mobile tech facility opens following Chancellor’s call to make UK a world leader in 5G’ (accessed via: htp://www. setsquared.co.uk/news/201612/pioneering-mobile-tech-facility-opens-following-chancellor%E2%80%99s-call-make-uk-world-leader-0) 18 BOX 3-2 CONTINUED

On a natonal basis, the 5GIC is working closely with DCMS, Treasury, the Engineering and Physical Sciences Research Council and other partners to develop a natonal framework to provide large-scale 5G demonstrators in sectors such as Transport, Health, Cyber security and Agritech. Government has allocated approximately £175m from 2017/18 through to 2020/21 to support this actvity and 5GIC will play an actve role in its delivery.

5GIC is currently the world’s largest open innovaton research and development facility.

5G Innovaton Centre, University of Surrey, Guildford

Surrey’s 5GIC – supportng growth and innovaton North, East, West and South 3.8 Within the South, there are discussions with Airbus and Portsmouth University on 3.7 Having established this world leading 5G the creaton of a Satellite/5G and Big Data facility the next phase of development will Innovaton Centre at Portsmouth. The 5GIC focus on the creaton of regional and natonal will work to extend its existng network test beds connected to the 5GIC core network. of SMEs to approximately 100 with an These test beds will range from small facilites increasing focus on supportng company in business incubaton centres to allow direct scale-up opportunites with the regional digital access by SMEs to large scale programmes economy as part of an Enterprise M3 Scale-Up in other regions and cites to demonstrate programme. In additon, the 5GIC is already in applicatons in key market sectors. This will a formal partnership with the Digital Catapult facilitate the exchange of ideas in diferent Hub in Brighton and will be working closely locatons around the country. Key partners with the Creatve/Gaming sector there. in additon to Enterprise M3 LEP are: Digital Greenwich (London); NE LEP (Northern 3.9 One specifc example which will be launched Powerhouse); and Worcestershire LEP in July 2017 is the world’s frst 5G Digital (Midlands Engine). Gaming support facility. This will provide

19 BOX 3-3 BOURNEMOUTH’S 5G TEST BED WITH ORDNANCE SURVEY

Ordnance Survey, Britain’s mapping agency and digital business is headquartered in Southampton. It has been commissioned by the Department of Culture, Media and Sport to develop a 5G network planning and mapping tool together with the Met Ofce and the 5G Innovaton Centre at the University of Surrey. This is being piloted in Bournemouth in preparaton for the natonal rollout of 5G.

Mobile network planners need to take into account the locaton of things that are likely to weaken or block the signal from their masts - trees, buildings, lamp-posts, for example. This is going to be partcularly important for 5G, which uses high-frequency radio waves that do not travel as far as those used for 4G.

Ordnance Survey’s tool will allow 5G planners to construct a virtual network to test broadcast range and reliability through the seasons and over the coming years. Weather conditons, tree foliage, vegetaton life cycles, and details of future building projects are included in the model’s intelligence.

To make the project a success, Bournemouth Council has forged a close working partnership with Ordnance Survey, and with Dorset LEP on how local authorites can work together to trial a 5G network. The Council are seizing the opportunity to work with Ordnance Survey to understand the diferent applicatons of the 5G tool to support the delivery of public infrastructure. AS one of the frst areas to deploy a 5G network into the UK is also expected to atract more technology companies into Bournemouth, helping it to build on its success as home to the largest number of high-growth digital businesses in the UK.

Guildford and Aldershot’s digital gaming cluster with unique access to the latest mobile internet technologies. 5GIC members have already commited an additonal £5m to this programme.

CYBER SECURITY

3.10 Cyber Security has become a global industry. In the UK, it is shaped by the government’s Natonal Cyber Security Strategy enttled “Protectng and promotng the UK in a digital world”. Three of the fourteen universites now recognised by Government as Academic Centres of Excellence in Cyber Security Research (ACE-CSR) are in Innovaton South: Royal Holloway, University of Southampton (through “Cyber Security Southampton”), and the University of Surrey (through the Surrey Centre for Cyber Security). A brief synopsis of the credentals of Royal Holloway’s renowned Informaton Security Group are provided Cyber security below.

20 BOX 3-4 ROYAL HOLLOWAY INFORMATION SECURITY GROUP

Royal Holloway Informaton Security Group Founded in 1990, the Royal Holloway Informaton Security Group (ISG) is a GCHQ/EPSRC recognised Academic Centre of Excellence for Cyber Security Research (ACE-CSR). It hosts one of only two UK, Natonal Cyber Security Centre (NCSC) supported Centres for Doctoral Training in Cyber Security (CDT), and its MSc in Informaton Security (launched 1990) is recognised by GCHQ/NCSC.

The ISG has 20 permanent research-actve members of academic staf, 10 visitng professors and numerous consultants. ISG research areas include, conventonal and post-quantum cryptography; computer and sofware systems security; IoT and vehicular security; critcal infrastructure security and testng; human aspects and privacy; smart cards, smartphone, hardware and embedded systems security; network, communicatons, access and cloud security; blockchain56 and big-data integrity and privacy.

BLOCK CHAIN

ISG research facilites include the Smart Card and IoT Security Centre, founded in 2002 with support from Giesecke & Devrient, and Vodafone, which researches into security issues associated with smart cards, mobile devices, RFID, near feld communicaton and general embedded/ implementaton systems57. The Systems Security Research Lab (S2RL) was founded in 2014 and researches into novel techniques and community tools to protect systems from a broad range of threats, partcularly from malicious sofware. S2RL has received support from EPSRC, Intel and EU- FP7.

The ISG also works with many industry partners and governments on sponsored research and consultancy, for example a recent project with GE Aviaton to identfy security requirements for wireless avionics, and an interdisciplinary project sponsored by GSK to investgate why employees click on phishing links58.

56Blockchain technology is viewed as one of the key building blocks for the global economy. Encrypton used on blockchains like Bitcoin and Ethereum is industry standard and has never been broken. They are ‘cryptographically auditable’, which means you can be mathematcally certain that their entries have not been forged. Also because blockchains are copied across thousands of computers they are incredibly robust. Even if a large number of individual computers were taken ofine, the records would remain accessible and the network could rebuild itself. 57 21 ISG Smart Car and IoT Security Centre website (accessed via: htp://scc.rhul.ac.uk/) 58Royal Holloway Informaton Security Group response to the Innovaton South call for evidence, March 2017 BIG DATA ANALYTICS 3.12 The South has considerable depth of expertse in this feld. Academics at the University of 3.11 Big data – datasets that are so large and Southampton were integral to the formaton complex that conventonal data processing of the Open Data Insttute; the University of sofware is unable to manage them – is itself Southampton also hosts the Administratve a consequence of the explosion of digital Data Research Centre for England60 61; the enabling technologies, as data are generated University of Reading has partcular expertse by mobile devices, wireless sensors, virtual in agrimetrics and has the Insttute of reality applicatons, and so on. While data Environmental Analytcs; Royal Holloway volumes have, according to McKinsey, doubled has specialisms in machine learning; and the in three years, storage capacity has greatly University of Portsmouth has the Insttute increased and storage costs (through the of Cosmology and Gravitaton. In additon, advent of cloud computng) have fallen59. the corporate sector has signifcant depth of Potental gains from the efectve use of the expertse – IBM at Hursley and QinetQ are two data apply to all parts of the economy, both examples. those highlighted in this Audit and sectors (such as retail) which have been quick to spot the commercial potental of the increased volume of customer data.

BOX 3-5 DEPARTMENT OF COMPUTER SCIENCE, ROYAL HOLLOWAY

Royal Holloway’s Department of Computer Science is one of the UK’s leading centres for research into algorithms and complexity, distributed and global computng, machine learning, and sofware language engineering. This research profle allows the Department to ofer a full spectrum of actvity from cloud physical infrastructure and middleware through to machine learning-based data analytcs and artfcial intelligence, which has been generatng many collaboratons with industry and organisatons, an example of which is the partnership with Centrica established in 2013.

Research in Machine Learning at Royal Holloway started in the 1990’s. Since then, the Department has developed both fundamental theory and practcal algorithms that have fed into the analytcs methods and techniques that are in use today – for example, several patents granted to Google and other companies cite Royal Holloway publicatons.

Examples of industrial applicatons include automated target identfcaton (with QinetQ), fault diagnosis (with Marconi Instruments/FRI), biomarker discovery (with Ciphergen Biosystems), anomaly detecton (with Thales UK), missing values and imputaton (with Ofce for Natonal Statstcs), abdominal pain treatment (with Western General Hospital, Edinburgh), smart meter analysis (with Britsh Gas).

More recently, strong collaboratons have also been established with Facebook, Google, IBM and NASA in areas such as concurrency control, large-scale and cloud-based systems, cognitve and autonomous agents, and automated planning, scheduling and domain-independent search control with applicatons in surveillance operatons, disaster response missions, and space operatons.

59Nicolaus Hencke et al (2016), The Age of Analytcs: Competng in a data-driven world, McKinsey Global Insttute 60The Administratve Data Research Centre for England is led by the University of Southampton and run in collaboraton with the Insttute for Fiscal Studies, the London School of Hygiene and Tropical Medicine, the Ofce for Natonal Statstcs, and University College London 61This combines exceptonal physical facilites with high performance computer platorms to provide knowledge and evidence to help develop, implement and evaluate public policy and future research. The organisatons that make up the Centre are leaders in linking data and have world-class expertse in using 22 and analysing administratve data from the educaton, health, crime, environment, economic and welfare sectors. BOX 3-5 CONTINUED

Royal Holloway’s Machine Learning Group (principally Gannerman, Vovk, Luo, Kalnishkan and Watkins) have received regular funding from EPSRC ofen in collaboraton with the Department of Informaton security (e.g. current funding of £604K has Cavallaro (ISG) as PI) but in recent years European funding has become equally important as has funding from industry and other research councils where machine learning is applied to interdisciplinary problems. Signifcant funding (>£3.5million) has been atracted from the EPSRC, EU, BBSRC, MRC, Veterinary Laboratories Agency, the Leverhulme Trust, and industry over the last ten years.

The Department has also been making substantal contributons to the development of skills in the critcal area of data analytcs: former MSc and PhD students are pursuing successful careers at leading companies and organisatons such as Amazon, Centrica, EY, Google, Facebook, Microsof, Ofce for Natonal Statstcs, QuintlesIMS, Rolls-Royce, Shell, UBS, VMWare and Xerox; others are enabling smaller companies to thrive in this compettve market. The recent launch of an MSc in The Internet of Things, the frst in the UK, will extend the scope of the Department’s contributon to skill development in this fast expanding area.

3.13 Accenture estmates Artfcial Intelligence could Insttute, has been chosen by Government to add up to £654bn to the UK economy by 2035. lead a review of the UK’s sector with Jérôme Regius Professor of Computer Science at the Pesent, CEO of BenevolentTech and a world- University of Southampton, Dame Wendy Hall, leading pioneer in the commercialisaton of AI. also Executve Director of the Web Science

Machine Learning

23 BOX 3-6 WEB SCIENCE INSTITUTE

The Web Science Insttute is an entrepreneurial not-for-proft research insttute at the University of Southampton62 which was launched in 2013.63 It is highly inter-disciplinary in nature, and has as its broader aims the maximisaton of social, cultural, economic and developmental impacts of Web technologies.64 It realises these aims through conductng research and providing intelligence to government, the business world and civil society that can lead to insightul decisions in these realms. Its mission is to bridge the state of evolving technology with paterns of social and organisatonal behaviour, creatng an integrated picture of these two dimensions.

Given the realms it aims to infuence, in additon to research and educatonal endeavours, the Web Science Insttute pursues enterprise initatves.65 In aiming for highly relevant societal impact, the Insttute has generated research that has led to applicable commercialisaton of knowledge and spin-out businesses, which include: Garlik, which protects consumers from identty thef and fraud,66 The Open Data Insttute, W3C PROV Working Group, E-Prints Services. 67

The Insttute was led by Web Science pioneers, Professor Dame Wendy Hall and Professor Sir Nigel Shadbolt (now at Professor Dame Wendy Hall University of Oxford). Professor Dame Wendy Hall led a team, just before the Web emerged, to create Microcosm, a system that allowed users to browse collectons of hypermedia informaton from text to sound and video.68

PHOTONICS speed lasers and optcal fbres to enhance the capacity of communicatons links. Great strides 3.14 The concentraton of expertse in photonics have been made in the capacity of optcal research at several Innovaton South fbres as communicatons channels with rapid universites is outstanding. transmission speeds (well into the multple Tbit/s speed range) over a single fbre by using 3.15 Photonics is the physical science of light wave division multplexing (which means (photon) generaton, detecton, and sending simultaneous signals over the same manipulaton through emission, transmission, fbre at diferent frequencies). Optcal fbre modulaton, signal processing, switching, and optcal device technologies will provide amplifcaton, and detecton/sensing. Its most the essental backbone for future mobile and important applicaton has been combining high internet communicaton networks.

62Web Science Insttute, University of Southampton, Available at: htp://www.southampton.ac.uk/wsi/about/index.page?, accessed on 24.04.2017 63University of Southampton, ‘New Web Science Insttute to explore how the Web will shape our future’, published 8 November 2013, available at: htp:// www.ecs.soton.ac.uk/news/4365, accessed on 24.04.2017 64UK Parliament, Parliamentary Digital Service Blog, available at: htps://pds.blog.parliament.uk/2016/11/14/building-networks-of-support-visitng-the-web- science-insttute-at-university-of-southampton/, accessed on 24.04.2017 65University of Southampton, ‘New Web Science Insttute to explore how the Web will shape our future’, published 8 November 2013, available at: htp:// www.ecs.soton.ac.uk/news/4365, accessed on 24.04.2017 66Naomi Atkinson, ‘University of Southampton – Web Science’, The impact made by UK Academic Computer Science Research, available at: htp://cs- academic-impact.uk/the-web/, accessed on 24.04.2017 67Web Science Insttute, University of Southampton, Available at: htp://www.southampton.ac.uk/wsi/about/index.page?, accessed on 24.04.2017 68Naomi Atkinson, ‘University of Southampton – Web Science’, The impact made by UK Academic Computer Science Research, available at: htp://cs- academic-impact.uk/the-web/, accessed on 24.04.2017 24 3.16 Natonally, REF 2014 includes 56 impact case 3.17 This points to both the concentraton of studies relatng to photonics. Twelve of these research expertse in the South, and its came from universites within Innovaton applicaton. The University of Southampton’s South, and the University of Southampton Optoelectronics Research Centre (ORC) has a alone accounted for seven: the largest number strong reputaton in photonics research with of photonics-related impact case studies69 groups focused on optcal materials, optcal from any university in the UK. The University fbres, light generaton and manipulaton, of Surrey and the University of Kent both optcal networks and systems, biophotonic contributed two, while the University of Sussex microsystems and fundamental photonics. A contributed one. more detailed account is provided in Box 3-7 below.

BOX 3-7 PHOTONICS AT THE UNIVERSITY OF SOUTHAMPTON

Photonics research has a strong traditon at the University of Southampton. It has a strong and successful industry focus and is mainly conducted in two mult-disciplinary research centres:

• The Zepler Insttute is the largest photonics and electronics insttute in the UK.70 It has over 350 researchers with more than 100 laboratories.71 • The Optoelectronics Research Centre, formed in 1989, leads photonics research spread across 30 mult-disciplinary research groups, with more than 200 staf and student researchers.72

Both centres are characterised by a strong industry-orientated approach to their research. The Zepler Insttute generates, on average, 15 patents a year, while the Optoelectronics Research Centre typically fles around 20 patents a year.73 Both centres have also been a source of at least ten spin-of businesses.74

Photonics research carried out at the Optoelectronics Research Centre was judged to be outstanding through the Research Excellence Framework (REF 2014)75 Researchers publish over 250 papers and give 25 plenary talks at conferences a year on average.76 The Zepler Insttute displays a strong research component, generatng on average 372 publicatons per year.77

Harnessing the University of Southampton’s expertse in this feld, the Zepler Insttute, is to link up with the EPSRC Natonal III-V Centre at the University of Shefeld to form the Future Photonics Hub, a £10million future manufacturing research centre funded for the next seven years.78 Using photonics research and applicatons, the hub aims to boost the UK’s manufacturing industries by the rapid commercialisaton of emerging technologies.79

69Impact case studies were submited as part of the 2014 Research Excellence Framework (REF). Broadly, the case studies outline changes and benefts to the UK economy, society, culture, public policy and services, health, the environment and quality of life and impacts in these sectors beyond the UK 70Zepler Insttute, available at htp://www.zeplerinsttute.ac.uk/about-us, accessed on 13.04.2017 71Ibid. 72Optoelectronics Research Centre, available at htp://www.orc.soton.ac.uk/community.html, accessed on 13.04.2017 73Zepler Insttute, available at htp://www.zeplerinsttute.ac.uk/facts-and-fgures, accessed on 13.04.2017; Photonics Research, Optoelectronics Research Centre, University of Southampton, Available at: htp://www.orc.soton.ac.uk/research.html, accessed on 12.04.2017 74Zepler Insttute, available at htp://www.zeplerinsttute.ac.uk/facts-and-fgures, accessed on 13.04.2017; Photonics Research, Optoelectronics Research Centre, University of Southampton, Available at: htp://www.orc.soton.ac.uk/research.html, accessed on 12.04.2017 75Ibid 76Ibid 77Zepler Insttute, available at htp://www.zeplerinsttute.ac.uk/facts-and-fgures, accessed on 13.04.2017 78The Future Photonics Hub, available at: htp://photonicshubuk.org/capability/, accessed on 13.04.2017 79‘Southampton to lead £10 million natonal Manufacturing Hub’, University of Southampton, Published 24 November 2015, Available at: htp://www. 25 southampton.ac.uk/news/2015/11/future-photonics-hub.page, accessed on 12.04.2017 QUANTUM 3.23 As recently reported in the Economist, 3.18 The pursuit of quantum technologies is a “According to McKinsey, in 2015 about natonal priority and a “Natonal Strategy 7,000 people worldwide, with a combined for Quantum Technologies” was launched budget of about $1.5bn, were working on by the EPSRC in 2015. Scientfc expertse in quantum-technology research”. While some relaton to quantum technologies is distributed applicatons, such as universal quantum widely across universites naton-wide, but computng, remain a long way from the University of Southampton, University commercialisaton, others are far closer to of Sussex and Royal Holloway are among realisaton. Secure quantum communicatons those universites stepping up to the natonal systems are already being installed, and challenge. new opportunites in sensors will likely see deployment within fve years. However, 3.19 Four Quantum Technology Hubs have received there is a strong consensus that quantum substantal research funding natonally – and technologies will be a game changer. Fify the universites of Southampton and Sussex, years ago, Gordon Moore from Intel coined and Royal Holloway, are key collaborators. his famous “Moore’s Law”, which stated that One Hub in sensors and metrology (led by the capacity of silicon devices would double the University of Birmingham) involves the every year. However, silicon technology is now University of Southampton and University of approaching the limits of the laws of physics Sussex. Both universites are collaborators in and industry is therefore beginning to look a second Hub which is focused on informaton more seriously toward Quantum technologies technologies (led by the University of Oxford). to form the basis of a new generaton of super- Royal Holloway is a collaborator in a third devices. Innovaton South research insttutons Hub which focuses on communicatons are well-placed to lead on the frst applicatons technologies (led by the University of York). of such technology.

3.20 There is a new “Natonal Centre for 3.24 Quantum technologies will develop rapidly Superconductng and Hybrid Quantum over the coming years. Most experts expect Systems” in the process of being set up at the technology to develop within the research Royal Holloway with funding from EPSRC and community, and with early adopters in defence a second EPSRC project at the University of and security, secure telecoms, fnance and Surrey. The University of Sussex is leading on large scale computng. In parallel, sensors and the design of Quantum Computers. imaging technology will likely spread into civil engineering, healthcare and aerospace, and in 3.21 Innovaton South is well represented among the longer term, into mass market consumer the 106 impact case studies recorded in REF goods. The newly announced EU Flagship with 2014. Each of the universites referenced 1bn Euro will play a signifcant role. above has between two and four submissions linked to quantum technologies. The University of Surrey contributed a further two.

3.22 There are several research insttutons that are developing substantal expertse in this feld. A profle of one – the Natonal Physical Laboratory – is provided in Box 3-8 below.

26 BOX 3-8 NATIONAL PHYSICAL LABORATORY

The Natonal Physical Laboratory (NPL) has acted as the UK’s Natonal Measurement Insttute for more than 100 years, developing the UK’s primary measurement standards. In this way, the NPL both relies on new and innovatve measurement science and technology research, and encourages its applicaton to the beneft of real-world problems. Benefciaries of new measurement solutons are generators of commercial research and development, where these can support business innovaton. NPL employs over 500 scientsts and is home to a 36,000 square-metre, purpose-built laboratory which hosts 388 measurement science laboratories.80

The NPL has close working links with the University of Surrey, and jointly they have formed the NPL South hub, specialised in research of key metrology areas, in partcular, regarding technologies including 5G, Satellite sensing, and Quantum technologies.81 The hub also acts as a focal point for the region’s industry to access measurement innovaton and research conducted by the two centres.82

NPL also collaborates with government and a broader network of businesses to extend the impact of its work. This approach is set in the most recent government strategy which encourages the exploitaton of NPL work for driving enterprise, business and innovaton. From this perspectve, the hub of strategic partners, NPL and the University of Surrey aims to:

• expand the quantum industry, and subsequent development of new products. This work will be led at the Advanced Quantum Metrology Laboratory, currently under constructon, in Teddington. • as a partner in the 5G Innovaton Centre, conduct research on measurement issues for 5G implementaton and develop and provide standardisaton and validaton for 5G ready technologies. • increase the hub capabilites in satellite sensing and the development of low cost satellite solutons, refning instruments to internatonal standards

RESEARCH EXCELLENCE IN DIGITAL ENABLING 3.27 What is also apparent is the inherently inter- TECHNOLOGIES GOES DEEP & WIDE disciplinary nature of research strengths linked to Digital Enabling Technologies. The descripton of Cyber Security Southampton, 3.25 There is good evidence that the South has for example, refers to 12 research groups substantal and signifcant research strengths within the University, one of which is the across all Digital Enabling Technologies. Optoelectronics Research Group, at the core of its photonics excellence. Diferent Digital 3.26 These are linked, most directly, to the Enabling Technologies are therefore being University of Southampton, University developed together, and this is a further of Surrey, University of Sussex and Royal source of strength. Holloway. However, Digital Enabling Technologies are dispersed across a range of 3.28 The Audit has revealed research excellence in academic disciplines (“units of assessment” in Digital Enabling Technologies also exists within REF terms) and many of the universites across businesses in the South, and some of it is being the South are making a contributon. These advanced through internatonal collaboratons. insttutons are Bournemouth, Canterbury One important example is provided below. Christ Church and Solent Universites and the Universites of Brighton, Chichester, Greenwich, Kent, Portsmouth, Reading and Winchester.

80Natonal Physical Laboratory, available at htp://www.npl.co.uk/about/what-is-npl/, accessed on 13.04.2017 81Natonal Physical Laboratory response to Innovaton South Science and Innovaton Audit Call for Evidence, April 2017 27 82Ibid IBM EMERGING TECHNOLOGY (HURSLEY) AND THE BOX 3-9 INTERNATIONAL TECHNOLOGY ALLIANCE

IBM Emerging Technology is based at IBM’s major site in Hursley, Hampshire. Hursley is the company’s main R&D lab in the UK with the Emerging Technology team comprising around 50 members of staf with strong links to IBM Research. The team has expertse in a range of disciplines including Internet of Things, encrypton and cognitve computng, and its focus is on bridging the gap between work conducted in IBM Research and its applicaton into “real world” situatons.

As stated on its website, Emerging Technology “collaborate with customers from a huge variety of industries, ranging from aerospace to retail and healthcare to security”83. Part of its business is therefore client-facing and the team is concerned essentally with fnding innovatve applicatons for digital enabling technologies.

In additon, the Emerging Technology team is involved in large scale and long term research programmes, generally working with academic and industry partners. This has included the Internatonal Technology Alliance in Network and Informaton Sciences (NIS-ITA), initated by the Ministry of Defence and the US Army Research Laboratory84. Its purpose was to produce fundamental advances in network and informaton sciences. This in turn was designed to provide a scientfc basis for new agile and fexible networking systems to support capabilites like informaton delivery and decision making, especially in uncertain and unstable environments at the edge of the network (e.g. with limited bandwidth, mobile devices and limited batery).

The programme ran from 2006 to 2016 and it involved 16 academic partners and 10 industrial organisatons from across the UK and US. In the UK, it was led by IBM Emerging Technology and other partners included Royal Holloway, University of Southampton, Airbus UK and Roke Manor Research (based in Hampshire). Another programme – Internatonal Technology Alliance in Distributed Analytcs and Informaton Sciences (DAIS-ITA) – was launched in September 2016. This too will run for 10 years and it is being led in the UK by IBM Emerging Technology. Other UK partners include the University of Southampton, Airbus and BAE Systems.

The ITA programmes are substantal and long term. Although funded through defence budgets, they are concerned with fundamental research at the core of digital enabling technologies. Partners from across the geography of Innovaton South are playing leading roles in this transatlantc initatve.

THE COMMERCIALISATION OF DIGITAL ENABLING 3.29 Innovaton South is a region where excellent TECHNOLOGIES research can and is being translated into excellent business innovaton research. The route, though, from laboratory to commercial 3.28 The market for Digital Enabling Technologies in markets is ofen complicated and usually themselves is niche and limited. The market requires considerable navigaton at both a for the current and future applicaton of Digital business level and more generally. Enabling Technologies is huge, extremely wide- ranging and excitng. It relates to every aspect of economic, social and cultural life.

83See htp://ets.mybluemix.net 84See htp://nis-ita.org 28 Challenges surrounding the commercialisaton of the journey to commercial impact stll needs Digital Enabling Technologies - the perspectve of to be navigated. Here the wider innovaton individual businesses infrastructure found within the South comes into play. Although AccelerComm is a spin-out 3.30 The case study below is signifcant because from the University of Southampton, the 5G it takes Digital Enabling Technologies, where Innovaton Centre based at the University of the science is demonstrably world class, but Surrey and SETsquared ICURe are also critcal.

BOX 3-10 CASE STUDY: ACCELERCOMM

The origins of AccelerComm can be traced to the Southampton Wireless Research Group at the University of Southampton. With backing from the EPSRC, Dr Rob Maunder found a way of signifcantly improving the throughput and latency of turbo decoders, one of the most complex components used in mobile phones and basestatons. With support from the ICURe (Innovaton to Commercialisaton of University Research) programme, run by SETSquared, a second phase of development was instgated. The award of an Innovate UK grant provided the commercial foundaton for a new business which was set up as an independent spin-out in early 2016.

AccelerComm is now an IP company, based on the Chilworth Science Park, close to Southampton which supplies designs for error correcton hardware to the manufacturers of components for mobile phones and basestatons., AccelerComm’s patented turbo decoder soluton is unique and meets all the requirements for the latest version of 4G. The company is also developing solutons for polar coding, which is a relatvely new error correcton code that has been selected for 5G. AccelerComm aims to be the frst to market with commercial-grade IP in polar encoding and decoding, which will fnd frst applicaton in test and measurement equipment for 5G.

AccelerComm has developed a strong sales pipeline, but it faces the challenge of selling new and complex technology. Its main customers are major corporates – like Huawei, Ericsson and Intel – and the key applicatons besides mobile phone and basestatons include satellites and defence. The market for AccelerComm’s products is global. The major corporates have a huge impact on the development of the technology and the market, and it is challenging for a start-up business to “be seen” and for confdence in its product to be developed. In order to address this, AccelerComm has contributed unique expertse to 5G standardisaton technical meetngs, which has signifcantly raised its profle and led to partnerships and opportunites with several large corporates. Recently, AccelerComm successfully demoed their turbo decoder technology at Mobile World Congress (MWC), which has led to several more signifcant opportunites.

It is – in part – also for this reason that AccelerComm’s links to the 5G Innovaton Centre at the University of Surrey are seen as very important. AccelerComm is one of over 40 “small enterprise tech members” of the 5GIC, and it considers that membership brings with it two very important benefts:

• access to the 5GIC’s testbed facilites – described as “amazing” and are likely to be replicated in Basingstoke (which will be helpful for the Southampton-based frm) • networking and promotonal benefts consistent with a facility that is well known by UK Government and has profle internatonally: when the AccelerComm is seeking to break into the major corporate market, the associated visibility is extremely important.

29 BOX 3-10 CONTINUED

AccelerComm’s goal is to become the leading supplier of Intellectual Property (IP) cores for 4G and 5G error correcton codes on the market, and thereafer expand their portolio throughout the core pieces of the physical hardware layer of mobile phones and basestatons. AccelerComm has globally unique products that are protected by patents, which are enabling the business to grow quickly, and is very confdent about its prospects. Accelercomm’s journey encapsulates the strength of Innovaton South’s support ecosystem for excitng, innovatve new companies working in the feld of Digital Enabling Technologies.

Challenges surrounding the commercialisaton of Digital Enabling Technologies for the South more broadly

3.31 Table 3 1 below highlights some of the other broader challenges to be faced and they are, in part, the focus for this Audit.

Table 3 1: Social, technological, economic and regulatory challenges linked to the further adopton of Digital Enabling Technologies

Overarching challenges Innovaton South Enablers Regulatory challenges linked to the → Connectng SMEs and start-ups to regulatory bodies and frameworks development of Digital Enabling through standard organisatons and networking with corporate Technologies… partners Technological challenges relatng → There are signifcant technological challenges that will need to to the adopton of Digital Enabling be overcome relatng, ultmately, to cyber security. Cyber crime is Technologies… likely to be one of the biggest societal challenges in future years. Innovaton South has a world class academic base in Cyber security as well as strong connectons to natonal resources such as GCHQ. Via the Universites and other research establishments in the region, SMEs have excellent access to scientfc and technological resources and the established incubaton and spin out processes established by SETsquared

Challenges related to the social → There are growing ethical concerns about the ‘free’ services which acceptability of Digital Enabling people use in exchange for their personal data. In response, the Technologies… Council for Big Data, Ethics and Society was formed in collaboraton with the Natonal Science Foundaton in 2014. This produced a comprehensive white paper in 2016. It was enttled “Perspectves of Big Data, Ethics and Society”. The societal impact of digital technologies is a strong focus of the Universites, for example, the Web Science Insttute, whose Directors include Dame Wendy Hall, at the University of Southampton; and work at the University of Sussex on ethical issues related to artfcial intelligence and automaton; and will be a major strand running through future technological development actvity within the region.

30 Table 3 1: CONTINUED

Overarching challenges Innovaton South Enablers Economic challenges linked to the → Communicatons services can always be provided more cost- full development of Digital Enabling efectvely in areas of high populaton density. To achieve ubiquitous, Technologies… reliable high speed connectvity whether statonary or travelling at speed will require a suite of new digital enabling technologies. Some of this technology will be provided by existng communicatons companies but many of the really innovatve breakthroughs will come from agile smaller companies and start-ups. Innovaton South has optmum, balanced ecosystem of small and large technology companies to support a thriving ecosystem for such developments.

3.32 AccelerComm’s journey neatly encapsulates 3.33 In the future, the successful businesses/sectors the real challenges facing innovatve, bright in the South are likely to be the ones that new companies entering a highly compettve navigate these efectvely. Innovaton South and challenging digital global market. It is in an extremely strong positon to provide also illustrates the signifcant strides in the the support infrastructure needed. Looking commercialisaton of leading-edge Digital forward, ensuring the most efectve business Enabling Technologies already underway support is felt across the region will be key to within the Innovaton South region. making the most of the South’s advantages in Digital Enabling Technologies in a global market.

How does the evidence in Chapter 3 help us capture the full economic potental of Digital Enabling Technologies?

• Innovaton South has outstanding research strengths in a range of Digital Enabling Technologies. However, the challenges of the commercialisaton process must be recognised and addressed • Some of the region’s research strengths in Digital Enabling Technologies (e.g. quantum, 5G) are some way from full commercial applicaton and there is a need to gear up for the opportunites that lie ahead

31 4. APPLYING DIGITAL ENABLING TECHNOLOGIES – IN “CONNECTED DIGITAL”

CHAPTER 4 – KEY MESSAGES

• Connected Digital is a UK success story largely underpinned by the outstanding performance of the connected digital sector in Innovaton South - The South has a major concentraton of large corporates, including internatonal businesses such as Fujitsu, Huawei, Microsof and IBM, with UK/European Headquarters in the Thames Valley, Surrey and Hampshire. - These are major employers, ensuring the South’s positon as a globally-signifcant and globally-connected region • There are several signifcant and high profle clusters of digital companies - Some are achieving natonal and internatonal acclaim: the gaming sector in and around Bournemouth, Brighton, and Guildford, the “Hollywood of Videogames”85 - Almost half the UK games industry is in London and the South East86 - The “prize” of a Digital Catapult located in Brighton is testmony to the area’s innovaton culture - The South has growing credentals in the Internet of Things (IoT) and the closely linked “internet of place” • The applicaton of digital technologies across a raf of sectors and services, e.g. FinTech & e-government, is spearheading the digital revoluton.

“CONNECTED DIGITAL”, AND ITS PRESENCE IN industries, including the other themes of this THE SOUTH Audit: marine and maritme, biosciences and advanced engineering. 4.1 The Connected Digital Economy is driven by 4.3 Natonally, “connected digital” sectors are digital sectors focused on the supply of digital increasingly driving economic growth and infrastructure and applicatons that generate are performing strongly. Analysis by DCMS output and wealth in their own right. As distnguishes the “digital sector” from well as the ‘core’ digital sectors, they are “telecoms” but suggests that in both sectors, transforming other sectors across the economy GVA (current prices) increased by over 20% to create emerging felds such as EdTech, between 2010 and 2015 and that together FinTech, and HealthTech where the UK is they account for about 9% of the UK economy. already leading the way. They also include the

increasingly signifcant Creatve Digital sector. 4.4 Between 2010 and 2014, exports in the digital sector increased from £23.0bn to £31.8bn 4.2 Connected Digital businesses are ofen at the (14% of all UK service exports); in telecoms, heart of the development of Digital Enabling the percentage increase was 47% 87. Technologies and are using them to improve the performance and reach of the systems and solutons they are delivering to support other

85“All hail Guildford - the Hollywood of video games”, The Guardian, 2014 htps://www.theguardian.com/technology/2014/jun/04/guildford-uk-video-game- industry-ubisof-litle-big-planet-hollywood 86“A Map of the UK Games Industry, Nesta 2014. The South East is the nearest approximaton to Innovaton South. It excludes Dorset and includes Buckinghamshire; Oxfordshire; Milton Keynes. 87DCMS Sectors Economic Estmates, August 2016 32 4.5 Within the South, the “connected digital” 4.6 TechNaton Report, 2017, gives some insight sector is large and a signifcant source of into diferent digital economies within the employment. Ofcial fgures suggest there region. For the incidence of high growth digital are over 200,000 jobs in directly related frms, Bournemouth and Poole is ranked sectors88. This is 50% more jobs than would the highest of 30 clusters surveyed for the be expected if the South simply replicated the report at 26%. Reading’s digital economy natonal patern (a locaton quotent – region- appears to score perform phenomenally well wide – of 1.5). Locally, the concentratons on productvity, (although there may be a of employment are much higher again. distortng efect on the fgures because of For example, large parts of Thames Valley large company accounts). Table 4-1 highlights Berkshire have employment locaton quotents the place-based digital sector in some parts in excess of 3.5. of Innovaton South, although, it should be noted that some key local examples such as Guildford/Aldershot and Basingstoke are missing from the survey.

Table 4 1: Insights into the connected digital sector across hubs within Innovaton South – from TechNaton, 2017

Bournemouth & Poole Brighton Reading Southampton London No of digital jobs 15,763 12,614 45,269 22,737 300,169 Digital GVA £352m £580m £5.5bn £1.1bn £30bn Implied GVA/job £22.3k £45.9k £121,5k £48.4k £99.9k High Growth Firms 26 % 19% 18% 10% 20% [the highest natonal fgure]

Start-up Births 199 218 605 270 7,682

Average advertsed £39,508 £44,608 £53,255 £45,633 £61,803 digital salary Indexed against 0.64 0.72 0.86 0.73 1.00 London Tech Sector Growth 91% 92% n/a n/a n/a Potental Other observatons Natonal Centre Wired Sussex – a “Close to, yet “University of for Computer “hub and initator cheaper than, Southampton has Animaton and for the digital com- London and within produced 27 spin- Visual Efects munity” each reach of outs since 2000” at University of “Brighton is awash Heathrow” “The city has Bournemouth with hackathons, “Many multnaton- excellent interna- New accelerator – skills swaps and als are based on tonal connectons First Bourne meetups” Green Park” – a 2015 FedEx “Ordnance Survey “Gaming sector “ConnectTVT89 goes report singled out and Bournemouth going from strength from strength to Southampton as a Council testng a to strength” strength” “export epicentre” 5G mapping and planning tool”

[Source: Based on data presented in TechNaton, 2017]

88These relate to employment jobs identfed through BRES on the basis of a rolling average from 2013-2015. Note that this estmate excludes most self- employment jobs. These are a signifcant feature of the digital economy and the inference is that total employment in the sector is understated here 33 89ConnectTVT was formed in 2014 to “put Thames Valley back on the tech and digital cluster maps”. Subsequently it has encouraged networking, innovaton and skills development in the area. 4.7 There are diferent “layers” in the region’s locaton that had already been established “connected digital” sector. Some of it is indigenously”90. However, over the last 40- well-established, equally, there are new and 50 years, the major corporates have had a emerging elements which are growing quickly formatve infuence on Innovaton South, not and changing the region’s digital landscape. least as major employers. Although there is a good deal of overlap, as the diagram below illustrates, there are four key 4.9 An example is Chinese-owned Huawei, elements: now the biggest telecommunicatons equipment manufacturer in the world. Its UK • the major ICT corporates which have a Headquarters – and principal employment substantal presence in the north west of the hub – is at Green Park on the edge of region, partcularly through the Thames Valley, Reading. Although it has research centres in but also in parts of Surrey and Hampshire; this Cambridge, Bristol and near Ipswich, it regards includes the likes of Vodafone, Oracle, Microsof, the Reading-Guildford area as the main UK Telefonica, Huawei and IBM locus for internatonal ICT businesses. As • the digital businesses that have emerged the case study below demonstrates, Huawei in response to other established regional ataches considerable signifcance to research specialisms; and the emerging, localised, clusters excellence within the geography of Innovaton of predominantly SME and micro businesses South – here, partcularly the Universites of relatng, for example, to gaming and creatve Surrey, Royal Holloway and Southampton. digital media in and around Brighton, Guildford and Bournemouth 4.10 These corporates are now strongly embedded • the businesses/organisatons that are deploying within the South. Whilst proximity to Digital Enabling Technologies with respect to Heathrow Airport contnues to be of great Internet of Things (IoT) and the associated signifcance, other aspects of these corporates’ “Internet of Place” characteristcs and behaviours are evolving • the businesses/organisatons in many diferent quickly. The analysis completed by Hall et sectors which are increasingly part of the al (referred to above) commented on their “connected digital” sphere: the European HQ overwhelmingly American ownership. Over of American Express in Brighton and LV and the last 20 years, the ownership patern has JP Morgan in Bournemouth are examples of become very much more varied; Huawei bears FinTech, and SSE in the utlites sector is based in this out and the infuence of Asian investment Havant. appears to be growing rapidly. INNOVATION SOUTH’S FOUR OVERLAPPING ROLES 4.11 For these corporates, the relatonship with London is extremely important. An analysis IN SPEARHEADING “CONNECTED DIGITAL” completed in 2016 for Thames Valley Berkshire Local Enterprise Partnership highlighted Innovaton South as a hub for global corporates in the growing importance of drawing on the the digital sphere London labour market, especially younger “millennials”92, through reverse commutng. 4.8 Innovaton South is the UK centre for global An earlier piece of work noted that two major digital corporates. Many of these frms arrived frms – Cisco and Telefonica – had established in the 1970s and they have been the subject incubators to support young people to develop of signifcant academic study. One infuental innovatve ideas into new businesses. In both account concluded that “rather than being cases the corporates provided co-working responsible for the development of the space free of charge, mentoring and some high-tech concentraton, these multnatonal fnancial support for a period of six months to corporatons have taken advantage of a a year, and in both cases “these incubators are

90Western Sunrise: The genesis and growth of Britain’s major high tech corridor, Hall, P, Breheny, M, McQuaid, R, Hart, D (1987). London: Allen and Unwin 34 in central London, because that is where most of localised clusters. These are found across innovatve young people want to be”93. diferent areas within Innovaton South (consistent with the analysis in Table 4 1 4.12 This example adds to the view that an although that list is not exhaustve). efectve digital skills strategy for Innovaton South must be tailored and underpinned by a 4.14 A study completed by Nesta found that about profound understanding of the drivers of the half of the companies which make up the UK local and regional economy. These include games industry are located in London and the the importance of links with London and an South East, and identfes established “games awareness of the demands of diferent types of hubs” in Brighton and Guildford94. A more digital employers and how these connect into recent interactve map produced by a gaming the wider internatonal supply chain, taking industry representatve body, UKIE, pointed to advantage of existng links with, for example, 69 games companies in and around Brighton; the Digital Catapult. 37 in Guildford; 15 in Southampton; and 14 in Bournemouth95. Some of the businesses are Innovaton South - generator of digital start-ups global players, for example Creatve Assembly, and digital clusters founded in 1987 and employing 300 people in Horsham. The sector as a whole is growing 4.13 Over the last two decades, Innovaton South quickly and the South is extremely well has seen a profusion of digital start-ups. positoned. Some of these should be understood as part

Digital Start-up

92A Spatal Economic Narratve for Thames Valley Berkshire A report to Thames Valley Berkshire Local Enterprise Partnership, November 2016, by SQW 93Thames Valley Berkshire: Delivering natonal growth, locally – Strategic Economic Plan, 2015/16-2020/21 – Evidence Base (page 121-122) 35 94A Map of the UK Games Industry, Nesta 2014 95See htps://gamesmap.uk/#/companies Figure 4 1: Understanding Innovaton South’s unique assets and opportunites relatng to “connected digital” INNOVATION SOUTH AS ...

IN N C TE IO RE ON RN T TU N A VA C EC T O RU T IO N T a hub for major, global E N N S D I A N A R ICT corporates with E L F S N European/UK HQs and S I other major operatons in the region

a focus for the growth Innovaton South’s of digital tech clusters an innovator in the INNOVATION SOUTH AS ... around locally-defned unique assets and Internet of Things and INNOVATION SOUTH AS ... science and innovaton opportunites in Internet of Place clusters ‘Connected Digital’

R a pioneer in the H E C G applicaton of Digital R I A O E N Enabling Technologies S E A across the sectors and R L Y NE services IT T RS WO IVE RKS UN INNOVATION SOUTH AS ... INNOVATION

36 BOX 4-1 HUAWEI

Huawei in the UK

Huawei is the largest telecommunicatons equipment manufacturer world-wide. It has grown rapidly since it was founded in 1987 in Shenzhen, Guandong (China). Globally, it now has about 180,000 employees of whom around 80,000 are focused on research and development. Its global annual R&D spend is in the order of US$11bn. In 2016, its revenue globally was US$75.1bn and its proft was US$5.3bn91.

Huawei operates through three main business groups. These are concerned with telecommunicatons carrier networks (digital infrastructure); enterprise (supportng businesses/ organisatons/ cites in the use of digital infrastructure); and devices.

Currently, around 1,000 of Huawei’s UK staf are based at its UK Headquarters in Green Park, Reading. This includes all sales and marketng functons, operatonal project managers and engineers.

According to an Oxford Economics economic impact study in 2015, Huawei made a contributon of £956m to UK GDP over the three years 2012-2014 and supported 7,400 jobs either directly or through its supply chain.

Key collaboratons across the Innovaton South area

Although its own R&D centres are outside Innovaton South, Huawei has a series of signifcant local research collaboratons. Three are seen as partcularly important:

• Huawei is a major corporate sponsor of the 5G Innovaton Centre (5GIC), based at the University of Surrey, and has invested approximately £5m in the facility. Huawei regards the 5GIC as a venture of global signifcance, and its decision to get involved was taken outside of the UK. Huawei’s partcular contributon is the installaton of a 4-5G testbed. It is seeing this used extensively and is very positve about its potental, including its relaton to the community of small businesses that is being atracted by and nurtured through it. • Huawei is working very closely with the University of Southampton on a number of diferent projects. It regards the Optoelectronics Centre at the University of Southampton as a world class asset – and certainly the best in Europe. • Within the region, its third major collaboratve research partner is Royal Holloway. It has very strong links in the feld of cyber security and regards Royal Holloway as a leading research insttuton in this sphere.

Partcularly in relaton to the Universites of Southampton and Surrey, Huawei also recognises the role played by SETsquared, in supportng early stage businesses with expertse in digital technologies. The commercialisaton process is ofen difcult – partcularly with very new technologies – and SETsqaured is making a diference.

More broadly, Huawei recognises the Guildford-Reading area as the “locus” for the digital sector with others at Southampton and Brighton. Tech City (London) is key in relaton to tech start-ups and Cambridge is very important for research, but this part of Innovaton South is where many of the major corporates are located, Huawei included. The signifcance of Heathrow Airport cannot be underestmated in terms of internatonal technology cooperaton. The sector is intrinsically global and internatonal connectvity is crucial.

91Huawei Investment and Holding Co Ltd, 2016 Annual Report: Building a Beter-Connected World – page 8 37 BOX 4-2 22CANS

Early days and the evoluton of 22cans

22cans, a computer games company based in Guildford, is the latest studio to be established by Peter Molyneaux, who has been actve in the games industry for over 30 years.

In the 1980s, Peter was running a small import-export business in Guildford. Afer an ofer of free Amiga PCs from Commodore Internatonal, Peter designed a successful Amiga database program and with the proceeds, established Bullfrog Productons in 1987. Bullfrog was subsequently sold to the American video games company Electronic Arts in 1995. Electronic Arts’ UK headquarters remains in Guildford. Subsequently, Peter established Lionhead Studios in 1997, acquired by Microsof Studios in 2006. 22cans was created in 2012, based on Surrey Research Park and released its frst game later that year.

The explosion and transformaton of the games industry

The story of the games industry is one of both expansion and transformaton, driven by the advance of new technology. In the early days of the industry, video games could be developed by small teams with a small budget - the budget for Peter’s frst game was around £1,000. The transformaton of computng power and the range of devices available to consumers have transformed the scale of the industry: at its peak, Lionhead Studios employed about 300 staf, and games development budgets reach around $90 million.

Increasingly, “games companies are becoming like flm companies” in the budgets they require, the markets they reach and the product quality demanded by consumers. It is therefore becoming increasingly challenging for start-up businesses to get into the market.

The future

Future product development will depend on the exploitaton of new technology, such as augmented reality, on increasingly connectng players, and on developing products in all formats. In market terms, the Chinese market is becoming increasingly important, currently accountng for around 50% of the world games market and ofering great potental for expansion.

Why the South?

Why has Guildford become such a major centre for the games industry? Peter Molyneaux was already based in Guildford when he developed his frst game. However, the patern of new company formaton and consolidaton, and relatonships between key people within the sector, makes an element of clustering “inevitable”.

The UK is a good base partly because of a cultural acceptance of risk and innovaton within the entertainment industry, and the UK’s leading role. However, the sector is highly internatonalised: a third of 22cans’ staf are natonals of other EU states - increasingly they are recruited directly from abroad – and most games products are developed for global markets.

38 4.15 The creatve design and digital technologies for new products and services. In Innovaton developed for the gaming industry are South there are many good examples where increasingly fnding new markets through the region’s outstanding strength in creatve innovatve applicatons in other sectors - digital is driving innovaton in other areas of private and public. So-called “Gamifcaton” competency. or “Serious Gaming” represents vast potental

BOURNEMOUTH UNIVERSITY’S ORTHOPAEDIC RESEARCH BOX 4-3 INSTITUTE & NATIONAL CENTRE FOR COMPUTER ANIMATION

The Orthopaedic Research Insttute (ORI) at Bournemouth University (BU), has invested heavily in staf and state of the art equipment and facilites, including a gait lab and a virtual reality surgical training simulator. The ORI unit is working across BU with the Natonal Centre for Computer Animaton (NCCA) and the SciTech Games Technology Group to produce training and diagnostc scenario-games in virtual reality.

Co-operaton between these two globally-recognised centres enables surgeons to do orthopaedic training and achieve expertse before performing “live” treatments and allows the gait lab to provide walking and running scenarios that assess the root of orthopaedic ailments in patents.

Being able to assess the results of surgery accurately and train surgeons without “learning on the patent” has generated huge interest at home and abroad. ORI is already working with a multnatonal company on a mult-centre clinical trial and with a sofware company on virtual clinics. abroad – and most games products are developed for global markets.

BOX 4-4 CHILD PROTECTION – SERIOUS GAMING AT THE UNIVERSITY OF KENT

The Centre for Child Protecton at the University of Kent is a centre of excellence and innovaton in research, training and practce, aimed at the full range of professionals involved in child protecton. The Centre was established following the Munro Review (2011), which stressed that Contnuing Professional Development is crucial for professionals working to safeguard and protect children.

The Centre ofers partcipants a chance to refect on their practce skills within complex scenarios using virtual reality technology. These child protecton simulatons are widely used, award-winning and unique to the sector. Scenarios include a simulaton of a benign situaton rapidly developing into a case of child sexual abuse; a simulaton of online grooming and the radicalisaton process, designed for school age students; and interactve avatars used in advocacy for supportng the UK’s ageing populaton.

The Centre is licensing the technology to Police Forces across the UK as well as District Authorites.

These are outstanding examples of digital enabling collaboraton between academic and applied disciplines allowing technologies to cross from one sector to another with productvity enhancing results. They demonstrate the scope for adding economic value to a range of practcal health and social care requirements through the applicaton of creatve digital technology and ofer a blueprint for further cross-sector and cross-technology innovaton.

39 Innovaton South as an innovator in “Internet of use the internet of place to improve the way Place” / Internet of Things (IoT) the city manages its infrastructure, including transport systems, and the 11 million tourists 4.16 A third element of the “connected digital” who visit each year. There could be apps to sector is smaller currently, but appears to be direct drivers away from the most congested an emerging specialism within the South. It areas and help them fnd free parking spaces. is focuses on the IoT and “internet of place”, Improving public transport and encouraging and is the use of Digital Enabling Technologies visitors to use park and ride facilites will to make “places work beter”. It links to the address concerns over trafc and air polluton96. smart cites agendas, but on a much smaller scale, and refects the way towns and cites Innovaton South as a pioneer in the widespread are scatered across the South, with no single applicaton of Digital Enabling Technologies dominant regional centre. 4.18 The fourth main component of “connected 4.17 The region currently hosts a number of digital” is the applicaton of digital sector testbed projects. Driven by the Digital Catapult technologies to other industries that are Centre Brighton (see Box 4-7 below), Brighton becoming increasingly digital in their is leading the way in associated Smart City operatons for example FinTech and online developments. As reported, the aim is to: retail. One example – from fnancial services – is provided below.

BOX 4-5 LV= The background to LV=

Formed in 1843, LV= is a fnancial Mutual Society owned by, and run for the beneft of its members. In 1996, its Head Ofce moved to Bournemouth. LV= is now the third largest car insurer natonally. Its turnover is in the region of £3bn and it has about 5.8m customers. It employs about 6,200 people - roughly double the fgure fve years ago. About half of its staf are based in its Bournemouth Head Ofce, and there is a second major site in Croydon.

LV= as a digital organisaton

Especially over the last fve years, LV= has become a digital organisaton. This has transformed how insurance is marketed and sold; how it is priced and underwriten; and how the Society interacts with its customers and members.

Looking ahead, this process of transformaton is expected to contnue. The emphasis will shif to using data & analytcs for preventatve purposes to reduce insurance claims and improve customer engagement. In the domain of car insurance, this will include using telematc data to alert drivers to when they are driving in “high risk” areas and it will also help to identfy any safety issues linked to the car itself. This suggests that the full impact of Digital Enabling Technologies will contnue to grow through the ambit of insurance.

LV=’s developing expertse in Digital Enabling Technologies

LV= has commited to invest over £100m over three years in digital capabilites. Some of this will be developed in-house and some will involve working with a wide range of specialist partners and collaborators.

96“Brighton: The seaside resort that wants to be the smartest digital city in England” The Guardian, 20th May 2015 40 BOX 4-5 CONTINUED In-house, LV= has an “Innovaton Laboratory” at its site in Bournemouth. This has about 12 staf and its focus is long term (5-10 years) and developmental. In additon, the Society employs around 200 specialist digital professionals (based in Bournemouth and Croydon) who focus on more immediate digital projects and applicatons.

LV=’s external collaborators are many and varied. They include major internatonal IT systems and applicatons specialists (like Accenture, Oracle and IBM), together with leading digital performance marketng agencies (such as iProspect). LV= is increasingly working with smaller, local, frms. Examples include Greenwood Campbell and Experience UX, two (of many) digital agencies which have started to emerge in and around Bournemouth.

LV=’s views on the digital sector in Bournemouth

LV= recognises the growth in Bournemouth’s digital sector (reported in TechNaton, 2017). It describes this in terms of large numbers of small digital agencies and also in terms of the actvites of major fnancial services businesses/organisatons. In additon to LV=, JP Morgan (investment banking) and Vitality (health insurance) are recognised to be the major digital businesses locally. It appears the fnancial services sector is itself helping to drive the growth of a wider digital sector.

Wider challenges and opportunites looking ahead

LV= has undertaken substantal recruitment in the Bournemouth area over recent years, much of it concerned with securing digital skills. It has developing links with both Bournemouth University and Bournemouth and Poole College; specifcally, it has developed what it regards as an important and efectve digital apprentceship programme.

In the past, it recruited new, local, graduates who would stay for a year or two and then leave to work in London. Increasingly, it is instead focusing on recruitng 30-35 year olds from either fnancial insttutons or marketng/digital agencies in London who are looking to return to the south coast. With this change in focus, recruitment is working well and Bournemouth is seen as a “good place” in which to be a digital employer.

“CONNECTED DIGITAL” SCIENCE AND innovaton. Wired Sussex – profled below – is INNOVATION ASSETS IN THE SOUTH one of the most established and successful support groups in the region. Focused on Brighton and Sussex, it has been working with 4.19 Partcularly for the smaller businesses, businesses in the digital sphere for over a networking and cluster groups can play a key decade. It is also one of the partners involved role in de-risking the process of enterprise and in the Digital Catapult Centre Brighton.

BOX 4-6 WIRED SUSSEX Wired Sussex is a membership organisaton for companies and freelancers engaged in the digital, media and technology sector. It was founded in 2006 by a group of businesses. The organisaton currently has a membership base of 2,856 companies and freelancers. Wired Sussex aims to contribute to the progress and development of a regional digital cluster. It does this through a number of services, initatves and networks, addressing six critcal areas: recruitment and skills, business and growth, work spaces, a shared voice, supportng local networks, and investment and trade.

41 BOX 4-7 DIGITAL CATAPULT CENTRE BRIGHTON (DCCB)

Focusing on innovaton of technologies associated with the Internet of Place, Digital Catapult Centre Brighton (DCCB) provides opportunites for SMEs, larger businesses, public sector organisatons and academia to collaborate and maximise the value of their products and services. Led by the Coast to Capital LEP in collaboraton with the University of Brighton and Wired Sussex, the centre aims to convert university-led R&D into market opportunites that are prototyped by small companies in the Creatve Digital and IT sector.

DCCB hosts 12 resident start-ups and SMEs and is partnered with more than 270 local businesses, with its actvites focused on 5 core themes (covering health and care, transport networks, data science (including 5G), future retail and augmented/virtual reality). The centre provides business support advice – including product and service development, access to fnance and access to specialist facilites and expertse – and collaboraton opportunites with university researchers, which can consist of workshops, sandpits informaton days and hackathons.

DCCB is part of the larger Digital Catapult initatve, which was established by the Department for Culture, Media and Sport and receives core funding from InnovateUK. DCCB is contributng to a programme of work that aims to accelerate sustainable growth and encourage a culture of collaboraton through digital innovaton. Following the UK Government’s 5G strategy, DCCB has been selected to deliver a natonal 5G testbed for businesses to explore how their existng products operate under 5G conditons.

4.20 A partcular strength for Innovaton South is 4.21 Many of the South’s universites are in the its fusion of digital and creatve skills, both of top 30 in the UK for research power related which underpin innovaton across diferent to connected digital, with Sussex and sectors. The region is a powerhouse for the Bournemouth in the top 598. The Natonal creatve industries, accountng for one quarter Centre for Computer Animaton (NCCA) at of creatve clusters identfed within the UK97, Bournemouth University, which supplies including hotspots in East Sussex: Hastngs roughly 50% of graduates working in the UK’s and Eastbourne’s TechResort. It is home to VFX and Computer Games industries99; the two universites uniquely focused in this feld: Centre for Insight, Design and Innovaton at The University for the Creatve Arts (with two the University of Winchester, which focuses campuses in Kent and two in Surrey) and Arts on design thinking and ofers expertse University Bournemouth. Both universites in augmented reality, web design and have a strong track record of developing Computer Aided Design; and TIGA100 award- industry-ready graduates. Alumni from both winning gaming courses at the University of universites, as well as the Bournemouth Portsmouth. University, have gone on to work on major blockbuster flms, including Oscar- and BAFTA- winners. UCA also counts among its alumni a winner of the Turner Prize.

97The Geography of Creatvity in the UK, July 2016, NESTA and Creatve England 98See Annex F 99Next Gen.: Transforming the UK into the world’s leading talent hub for the video games and visual efects industries, February 2011, by Ian Livingstone and Alex Hope for NESTA 100The trade associaton representng the UK video games industry 42 CONCLUSION 4.23 These businesses are developing Digital Enabling Technologies and using them to 4.22 The outstanding performance of the connected improve the performance of the infrastructure digital sector in Innovaton South is a major and applicatons that support existng and factor in the success of the UK’s Digital new industry models. Connected Digital economy. It is a signifcant contributor to is a UK success story largely underpinned the GVA, growth and jobs in the South. The by Innovaton South businesses and the Innovaton South region is the UK hub for associated research of its Universites. many global digital corporates which have efectve university connectons. The region also enjoys a high level of digital start-ups, many within the rapidly developing creatve digital media sector.

How does the evidence in Chapter 4 help us capture the full economic potental of Digital Enabling Technologies?

• In relaton to the connected digital sector, the strengths of the South are clear, but the “heat map” is uneven. The vibrancy of the larger urban areas needs to be shared region-wide, and core regional assets – like 5GIC – can be developed further • The pace with which Digital Enabling Technologies fnd their way into the connected digital sphere will impact on regional compettve advantage and this “supply chain” – from research through to innovaton – needs to be sustained and encouraged

43 5. APPLYING DIGITAL ENABLING TECHNOLOGIES – IN MARINE AND MARITIME

CHAPTER 5 – KEY MESSAGES

• Home to the Navy, the UK’s number one vehicle-handling port and an extensive coastline, science and innovaton in Marine & Maritme have deep roots in the South • There is a well-established marine and maritme cluster which has grown up around internatonal ports and/or harbours • Digital Enabling Technologies are having a transformatve impact on the marine and maritme sphere, partcularly in operatons that could, otherwise, be “dull, dirty and dangerous”; and, led by growth in China and India, the sector as a whole is seeing rapid global growth. Autonomous platorms – based on the extensive use of sensors – are changing the sector profoundly, and within the South, there are signifcant scientfc strengths and downstream innovaton in this domain • There are substantal research assets in both marine science and maritme engineering; the cross-disciplinary Southampton Marine and Maritme Insttute (SMMI) and the Natonal Oceanographic Centre (located on Southampton Waterfront) are especially important, but there are many other research centres too • A Marine Robotcs Innovaton Centre has been established with the aim of taking the disciplines of robotcs into the marine sphere and this is seeing innovatve, small companies playing a crucial role in the commercialisaton process • The role of large commercial companies is signifcant – including Sunseeker Internatonal (in the leisure market), Lloyd’s Register (a classifcaton society) through to BAE Systems (in defence-related maritme systems) • Models of innovaton in marine and maritme are changing. The profle atached to Land Rover BAR (Ben Ainslie Racing), based in Portsmouth, is creatng an innovaton model that is closer to Formula One, and the South is leading the way

MARINE AND MARITIME SECTOR, AND ITS in the east, through Newhaven, Brighton, PRESENCE IN THE SOUTH Shoreham, Portsmouth, Southampton and Poole, to Weymouth in the west. 5.1 The South is home to the Navy at Portsmouth, 5.2 Natonally, it has been estmated that the the UK’s number one vehicle-handling port at maritme and marine sector contributed £11bn Southampton and has a long heritage in the GVA in 2012, a fgure that was similar in scale marine leisure and tourism sectors. There is to pharmaceutcals and notably bigger than exceptonal research and industrial capacity aerospace101. Estmates suggest it accounted in the business of marine and maritme in for 367,000 direct jobs in 2011/12 and 703,000 Innovaton South; and, along its extensive in total (including indirect and induced jobs), coastline, clusters of specialist industrial and roughly one job in every 45 naton-wide. academic actvity have grown around the Signifcant science and technology underpins South’s numerous signifcant ports and/or the industry. natural harbours – from Dover and Ramsgate

101Maritme Growth Study – keeping the UK compettve in a global market, Department for Transport, 2015 44 5.3 In terms of its scale, the South Coast Marine • extended use of composites and other novel Cluster has estmated that the South East materials (GOR) accounts for about a third of the “UK • design and manufacture of specialist vessels for Leisure, superyacht and small commercial support of the ofshore energy and naval sectors marine industry” (9,300 jobs). Although • through-life operaton and inserton (including one element only of the wider marine and refts and conversions) to improve vessel maritme sector, it does signal the region’s efciency relatve patern of specialisaton. On a • decision support systems – including integrated broader defniton, it has been estmated that voyage optmisaton to deliver just-in-tme approximately 40,000 jobs are provided by the arrival at port at lowest cost, secure situatonal sector in Solent, accountng for 20.5% of GVA awareness and next-generaton command and and supportng over 3,000 businesses locally102. control systems. The Bournemouth/Poole and Weymouth areas are also very signifcant local hubs. 5.5 The importance of Digital Enabling Technologies is confrmed through a study DIGITAL ENABLING TECHNOLOGY DRIVERS AND completed by the Southampton Maritme and Marine Insttute. This identfed technologies CHALLENGES… that are likely to be transformatonal within the marine and maritme sphere. In the table 5.4 Marine and maritme is a sector which will be below, these are divided into two columns transformed by Digital Enabling Technologies. – those which might be described as Digital The 2015 Marine Industries Technology Enabling Technologies and “other”, although Roadmap103 drew on inputs from over 70 many of the later will themselves have a experts and it alighted on seven overarching strong Digital Enabling Technologies element. priorites. These may be summarised as: The noton of “high value digitally enabled design” is also key here. Many of these drivers • whole-vessel integraton to deliver more need to be integrated into complex systems afordable and optmised running with reduced requiring multdisciplinary design tools, ofen staf and minimised through-life costs enabled by high performance computng. It • design, integraton, manufacture and operaton is also important to note that exploitaton of of autonomous vessels and systems these technologies will require a change in the • design, manufacture and reft of superyachts, skills mix within the sector, including atractng high-end powerboats and high-end sailing more graduates from electronics and computer yachts science programmes.

Table 5 1: Technology drivers within the marine and maritme sector – identfed by Southampton Marine and Maritme Insttute

Technology drivers linked to Digital Enabling Technologies Other Technology drivers • robotcs • propulsion and powering • sensors • advanced materials • big data analytcs • advanced manufacturing • smart ship • sustainable energy generaton • autonomous systems • shipbuilding • cyber and electronic warfare • carbon capture and storage energy management • human–computer interacton • marine biotechnology • communicaton • deep ocean mining • human augmentaton

[Source: Based on Global Marine Technology Trends 2030, QinetQ, Lloyd’s Register, University of Southampton, 2015]

102Making Waves: Solent’s Marine and Maritme Sector, Solent LEP, 2015 103UK Marine Industries: Technology Roadmap 2015 – produced by IfM, University of Cambridge, for UK Marine Industries Alliance, supported by Innovate 45 UK, DEIS and KTN 5.6 Marine autonomy has been identfed as recognise these challenges, sponsoring a paper “a truly disruptve technology that has the to the Internatonal Maritme Organisaton. potental to replace traditonal ship-based Lloyd’s Register, at Southampton University, alternatves for equipment inspecton and is a leading internatonal provider of marine other marine monitoring operatons”. In classifcaton and compliance services. It practce, this links together many of the has introduced provisions for progressive technological specialisms outlined above and autonomy and unmanned units with the is an area of regional strength. Partcularly for classifcaton requirements to help ensure this “dull, dirty and dangerous” operatons – which disruptve technology is deployed in a safe are increasingly unafordable (due to price manner. sensitvites and labour costs) and also under regulatory pressure – marine autonomous Other trends and drivers in the marine and platorms (both above and below the surface) maritme sector can potentally be fted with applicaton- specifc sensors to capture whatever data is 5.8 The marine and maritme sector is being required for a given locaton. This is an area transformed by market changes. Shipping of work in which the South has partcular is seeing a drive towards greater efciency strengths, and an embryonic sub-cluster has and further automaton of vessels, with been defned in these terms104. The existng opportunites in the manufacture of marine South Coast Marine Cluster has designated equipment, ship design and classifcaton. 2017 its “Year of Autonomy” with companies In the commercial sphere, the rise of China such as Qinetq among the key partners. and India – both in the producton of ships and in dictatng paterns of demand for 5.7 There are partcular regulatory barriers to world shipping – is changing the economics the full deployment of marine autonomy. of the sector; while in the military sphere, Marine expertse in the South is playing a the contnuing pre-eminence of the USA is critcal role in the global leadership required apparent. In additon, there is increasing deep to address these obstacles. The UK Maritme sea exploraton and operaton which presents and Coastguard Agency, headquartered in opportunites105. Southampton, has been actve in work to

Land Rover Ben Ainslie Racing, Portsmouth

104Marine Autonomous Systems; An Embryonic Cluster with high growth potental. Smart Specialisaton Hub Innovaton Review Workshop – Southampton, 19th January 2016 105Maritme Growth Study: keeping the UK compettve in a global market, Department for Transport, 2015 46 BOX 5-1 GLOBAL MARINE TRENDS, 2030

A summary of global trends across the principal marine sectors is provided below, based on a report enttled “Global Marine Trends, 2030” prepared by QinetQ, Lloyd’s Register, University of Strathclyde with expert input from the University of Southampton. The report points to signifcant internatonal changes and major productvity increases, driven by technology in general and Digital Enabling Technologies in partcular.

Commercial shipping, feet ownership and shipbuilding

• The volume of seaborne trade will double from nine billion tonnes per annum to 19-24bn tonnes by 2030. • China will play a key role in 2030 as the emerging maritme superpower in shipping, followed closely by India. • The total deliveries of bulk carriers, tankers, LNG carriers and container ships across the world will remain at around 2010 levels.

Naval sector

• The US Navy will be dominant in 2030, both in scale and technology. • Naval power will double in 2030, although navies will only maintain and refresh the numbers of platorms and personnel, rather than expanding them. This points to growth opportunites for the naval sector in systems capability rather than platorms or people. The growth of automaton, sensor integraton, cyber security and related technologies will help to determine the nature of naval power in 2030.

Ofshore Energy

• Advances in technology, underpinned by innovaton, research and development will be the keys to meetng the growing demand for energy from more diverse sources. • The number of ofshore platorms and renewable energy devices required to meet global demand will grow signifcantly.

[Source: Based on Global Marine Trends 2030, QinetQ, Lloyd’s Register, University of Strathclyde (2013)]

MARINE AND MARITIME SCIENCE AND systems and environmental sciences” – which INNOVATION ASSETS IN THE SOUTH includes marine science but is broader – the University of Reading and the University of Southampton are ranked 3 and 4 in the UK Universites respectvely. 5.9 Within the South, there are outstanding, 5.11 Maritme engineering is wrapped up with high–ranking research strengths in marine and more general engineering disciplines, and maritme – both in marine science, focusing on the Universites of Southampton and Surrey the environment, and maritme engineering. are outstanding. In two areas of engineering,

Southampton’s research power is unrivalled in 5.10 Headline data from the Research Excellence the UK. Framework are presented below. In “earth

47 5.12 In additon, it is important to note the together expertse in various related felds University of Southampton has established including big data and cyber security; robotcs the cross-disciplinary Southampton Marine and autonomous systems; and energy and & Maritme Insttute (SMMI). This brings resources.

Table 5 2: UK rank on “research power” in units of assessment that are relevant to marine and maritme across a selecton of universites in the South

Marine environments Maritme engineering Biological Sciences Biological Environmental Geography, Studies and Archaeology Mechanical, Aeronautcal, and Manufacturing Chemical Engineering Chemistry Engineering General Physics Earth Systems and Systems Earth Sciences Environmental Civil and Constructon Engineering and Electronic Electrical and Engineering, Metallurgy Materials

Royal Holloway, University of London 31 21 24 - - - - - 27

University of Greenwich - - - 19 36 - 27 51 -

University of Portsmouth - 24 46 16 - - - - 36

University of Reading 35 3 29 - 28 - 23 - -

University of Southampton 26 4 14 - 8 - 1 1 17

University of Surrey ------2 14 24

University of Sussex 17 - 28 - 32 - - 43 30

[Source: REF, 2014]

Other research and innovaton assets 5.14 The Centre for Environment, Fisheries and Acquaculture Science (CEFAS) is based in 5.13 The Natonal Oceanography Centre is the Weymouth. It is a world leader in marine UK’s Centre of Excellence for oceanographic science and technology, collectng, managing sciences. Located on Southampton and interpretng data on the aquatc Waterfront, it has a remit to provide natonal environment, biodiversity and fsheries. capability and leadership for big ocean science. Lloyd’s Register is based at the University of Whilst it works partcularly closely with the Southampton at the purpose built Boldrewood University of Southampton, it is independent Innovaton Campus - the single biggest as one of six research centres funded by NERC. academic-industrial development so far in the UK, and, with data and digital technologies at the heart of its strategy, LR has strong links

48 to high performance computng capability. and academia to drive innovaton and exports. The UK Defence Solutons Centre (UKDSC), It leads a Maritme Community of Interest based at Farnborough, works closely with the and works with the Royal Navy to stmulate Department for Internatonal Trade, industry autonomous systems contracts for UK Industry.

THE NATIONAL OCEANOGRAPHY CENTRE AND MARINE BOX 5-2 ROBOTICS INNOVATION CENTRE

The Natonal Oceanography Centre (NOC) in Southampton is a mult-disciplinary research centre with actvites covering marine geoscience, marine physics and ocean climate, systems modelling, ocean biogeochemistry and ecosystems, and ocean technology and engineering. The origins of NOC may be traced back to the 1940s and the formaton – in Surrey – of the Natonal Insttute of Oceanography. This moved to Southampton in the 1990s and it became the Southampton Oceanography Centre. It merged with Proudman Oceanographic Laboratory in 2010 to become, formally, the Natonal Oceanographic Centre.

As one of six centres supported by the Natural Environmental Research Council, NOC contributes to the UK’s natonal capabilites in long term science through research programmes covering sustained ocean observaton, ocean and ecosystem model development, and integrated sea foor and habitat mapping. The centre is home to about 520 research scientsts and staf, with more than 700 undergraduate and postgraduate students also based at the site in partnership with the University of Southampton’s Ocean and Earth Science Department106.

In 2015, NOC opened the £3.5m Marine Robotcs Innovaton Centre (MRIC), which provides a collaboratve space for companies developing technologies that aid oceanographic research, with the Marine Autonomous and Robotcs Systems (MARS) team also based at the site. To date, MRIC has worked in partnership with 8 companies and has 11 associate members, with £8m of R&D projects underway107. The centre is based around a 317m2 open-plan ofce space, with a range of smaller, enclosed spaces and private meetng rooms also available.

Airbus has a long-standing involvement with the Natonal Oceanography Centre (NOC) in the feld of remote sensing techniques to support the marine environment. This has enabled the development of new technologies for monitoring of the maritme environment which are at the leading edge of research in this domain.

NOC operates large scale research infrastructure – with the Royal Research Ships Discovery and James Cook, and a feet of autonomous underwater vehicles (including the recently commissioned Boaty McBoatace) all based in Southampton – and houses the UK Natonal Oceanographic Library, the Discovery Collectons and the Britsh Ocean Sediment Core Repository at the Britsh Ocean Sediment Core Research Boaty McBoatace Facility108.

106Natonal Oceanography Centre website, ‘Our History’ (accessed via: htp://www.noc.ac.uk/about-us/our-organisaton/our-history) 107Natonal Oceanography Centre response to the Innovaton South Science and Innovaton Audit call for evidence, presentaton ttled ‘Marine Robotcs Innovaton Centre; a hub for MAS Innovaton’, March 2017 49 108Natonal Oceanography Centre website, ‘Our History’ (accessed via: htp://www.noc.ac.uk/about-us/our-organisaton/our-history) 5.15 The South is leading the ambiton to bring out of defence to provide oferings into the home the America’s Cup with the locaton commercial sector (e.g. energy, marine science, of Land Rover BAR (Ben Ainslie Racing) safety and security) internatonally. Both of in Portsmouth. This is generatng new these initatves are based in the Portsmouth opportunites for science and innovaton; area to ensure the area’s shipbuilding skills are for showcasing commercial opportunites retained in new areas of technology. in the South and the UK, and for inspiring a new generaton of high tech engineers by Commercial demonstratng how powerful technology is behind “spectacle” events such as high level 5.16 A range of businesses – some established, compettve yachtng, where the purpose some new and small – are actve in the feld of innovaton is diferent. As with Formula across the Innovaton South region. Examples One, the goal is simply to win; and this – include: ASV Global Ltd, BAE Systems, Hydroid rather than downstream opportunites for and Saab Seaeye, MOST, Sonardyne, Lloyd’s commercialisaton, etc. – drives priorites (and Register, Planet Ocean, Airbus, QinetQ , tmescales) for innovaton. As explained in the Chelsea Instruments, Roke Manor Research natonal Maritme Growth Study: Ltd, GRP and Sunseeker Internatonal. The formaton and growth of these businesses has Government has also supported Sir Ben frequently occurred as part of wider clusters Ainslie’s America’s Cup team. This will provide which are anchored by the universites and a good platorm to demonstrate the UK’s specialist insttutons outlined above. The Case technologies and skills to a wider audience Study below describes the growth of two small at home and abroad, replicatng the success companies and demonstrates the positve achieved by UK based Formula 1 teams. Over commercial impact of the South’s wider assets £4m was invested in a Centre for Maritme and potental. Intelligent Systems. Industry is diversifying

BOX 5-3 PLANET OCEAN AND ECOSUB ROBOTICS

Early days – and the formaton of Planet Ocean

Planet Ocean was established as a marine science and technology company in 2004 with a focus on developing and commercialising aids to navigaton.

Planet Ocean’s locaton in Surrey owes much – historically – to the legacy provided by the Insttute of Oceanographic Science (IOS), which was based in Wormley, Surrey. It relocated to Southampton and it became the Natonal Oceanography Centre, but it “lef behind” a signifcant hot spot in Surrey/North Hampshire, consistng of a large number of oceanographic companies.

Planet Ocean’s early business was as an agent for overseas manufacturing businesses which were seeking market entry into the UK and Ireland. Gradually, however, its role evolved to develop its own marine systems and branded products. Fourteen years on, Planet Ocean employs seven people and it represents 23 diferent manufacturing businesses.

ecoSUB Robotcs – a spin-out business from collaboratve R&D

In 2016, a new company – ecoSUB Robotcs – was spun out from Planet Ocean as a result of its longstanding relatonship with the Natonal Oceanography Centre in Southampton. In 2015, Planet

50 BOX 5-3 CONTINUED

Ocean led a bid – involving the Marine Autonomous Robotcs Systems (MARS) group at NOC, ASV Global Ltd (Porchester) and the University of Southampton – for a collaboratve R&D project, part- funded by Innovate UK and DSTL. The aim of the project was to develop a micro-AUV (Autonomous Underwater Vehicle) launch and recovery system from an USV (Unmanned Surface Vehicle) for applicatons including defence, oil spill monitoring and science. The project also required the design of the low-cost micro-AUV.

As of spring 2017, the project is nearing completon. ecoSUB Robotcs Ltd is co-located with the Natonal Oceanography Centre in Southampton within the Marine Robotcs Innovaton Centre. Some early adopters are very interested in its product and it expects to become fnancially self-sustaining in 2018. ecoSUB Robotcs is developing through a strong network of relatonships. Links to NOC and University of Southampton are key but there are relatonships developing with other universites (e.g. the University of Sussex in relaton to quantum sensors) and advanced manufacturers (e.g. specialists in 3D printng and composites (on the Isle of Wight)).

The signifcance of Digital Enabling Technologies in the marine and maritme sector

Although its “sector” is formally “marine and maritme”, Planet Ocean considers itself to be – frst and foremost – a digital business. Its entre growth trajectory has been premised on Digital Enabling Technologies – initally simply the use of the internet, and now more sophistcated technologies and applicatons. The core challenge for the business surrounds data – how they are generated, how they are stored, how they are shared (in challenging marine environments), how they are protected and how they are used. There are huge volumes of data, and the challenge – increasingly – is to distnguish between “data” and “informaton”; the later is a processed and condensed variant of the former, and it is core to the value generated by the business.

Plans for the future – and key challenges

Looking ahead, Planet Ocean expects to grow steadily. ecoSUB, however, could grow very quickly. ecoSUB is facing the challenges faced by all tech start-ups – around early stage fnance, fast-developing technologies and new markets. For both businesses, however, there are overarching challenges relatng to recruitment. Both companies require robotcs engineers with foremost sofware skills and a deep understanding of oceanography – and this combinaton is very hard to fnd. Recent recruitment rounds have yielded no real interest from within the UK and instead, recent recruits have come from elsewhere in Europe (France, Germany). Currently non-UK-natonals comprise half of the two frms’ workforce.

Evidence of innovaton - partners in high value “transport” (which overlaps with, but is not digitally enabled design synonymous with, marine and maritme) – partcipants in the South were awarded grants 5.17 The marine and maritme sector in the South is totalling over £30m, some 14% of the UK total. innovatve. Some evidence of this is provided by an analysis of Innovate UK’s database 5.18 Exploring these data further provides insight of grant awards from 2010/11 to 2014/15. into the range and type of innovaton Over this period – in disciplines relatng to projects which are linked more closely to

51 “marine and maritme”. Selected examples 5.19 Most of the individual projects listed involve are provided in the table below. There is a the development of complex systems, striking breadth in the range of partcipants requiring a strong element of multdisciplinary from within the Innovaton South region - design, which in turn is ofen enabled by digital large frms, SMEs, universites and research technologies, such as advanced numerical insttutons –and the mix of collaborators methods running on high performance from elsewhere universites e.g. Cranfeld computers. The projects draw on a highly- University, corporates e.g. Rolls-Royce and developed research and innovaton ecosystem specialist marine and maritme businesses e.g. with strong roots in the South and a network Pendennis Shipyard in Cornwall. of links country-wide.

Table 5 2: UK rank on “research power” in units of assessment that are relevant to marine and maritme across a selecton of universites in the South

Partcipants from within Innovaton Other partcipants from elsewhere in Project South the UK Marine applicatons of electric turbo- Bowman Power Group Limited*, Lloyds Rolls-Royce plc, University College compounding for waste heat recovery Register EMEA London

Unmanned Safe Maritme Operatons Over The Horizon (USMOOTH) Autonomous Surface Vehicles Limited* Cranfeld University

Robust Machine Executable Collision Lloyds Register EMEA, Southampton Rolls-Royce plc*, Queen’s University of Regulatons at Sea Solent University, Atlas Electronik UK Ltd Belfast

Autonomous Surface / Sub-surface Autonomous Surface Vehicles Limited*, Survey System Sonardyne Internatonal Limited SeeByte Limited, NERC

Pendennis Shipyard Ltd*, Triskel Marine High Efciency Marine Energy (HEME) Energy Solutons (UK) Limited Limited, Bruntons Propellers Limited Codel Internatonal Limited, Pole Star Marine Energy Efciency, Transformaton Azurtane Ltd* Space Applicatons Limited, Inmarsat and Reportng (MEETR) Global Limited GLEAMS - Glycerine fuel for Engines and Marine South East Limited*, Lloyds Gardline Marine Sciences Limited, Marine Sustainability Register EMEA, Aquafuel Research Redwing Environmental

Holistc Vessel Performance and Routng Fugro GEOS Limited*, Triskel Marine System University of Southampton Limited

Supercritcal CO2 Waste Heat Recovery for Marine Gas Turbines Meggit (UK) Ltd T/A Heatric Rolls-Royce plc*, Cranfeld University

Wave Augmented Foil Technology (WAFT) Marine One Stop Technologies Ltd, for manned vessels Seaspeed Marine Consultng Limited Rolls-Royce plc*

Automated in service and permanent preventon, removal and detecton of Applied Inspecton Limited*, Pancom LTD, vessel hull fouling using a sparse network Denval Marine Consultants Limited Tube Tech Internatonal Limited, Newton of guided ultrasound sensors (VESSEL Montgomery Limited, TWI Limited CLEAN)

Performance and safety monitoring Avenca Limited, Callen-Lenz Associates system for workboat feet operaton CJR Propulsion Limited* Limited, Estuary Services Limited

[Key: * lead partner in the collaboraton. Source: Innovate UK ]

52 BOX 5-4 RNLI’S TECHNOLOGY PARTNERSHIPS

The Royal Natonal Lifeboat Insttuton (RNLI), HQ in Poole, is the charity that saves lives at sea. RNLI has had an Advanced Technology Partnership with the University of Southampton since 2004, which develops technology focused on aspects of naval architecture and human-factors engineering. Over the past six months the RNLI has engaged over 40 diferent organisatons exploring the future of Search and Rescue (SAR) Communicatons and Calling for Help and more recently, how the UK may be using Unmanned Aerial Systems and Space assets to enhance SAR operatons. The RNLI ran a Design Challenge with the Royal College of Art, exploring how it can make the Thames the safest stretch of river in the World by 2030. Prototypes created include autonomous unmanned surface vehicles and smart bollards that collect data on river usage whilst nudging behaviours through lightng. Bournemouth University are producing a computer-animated flm for the RNLI that will show a future design possibility for launching small lifeboats.

RNLI small lifeboat

53 Skills and talent dependent on digital enabling technologies, through highly sophistcated simulators 5.20 Innovaton South has very signifcant assets for ship operatons. The University of relatng to the provision of skills in the marine Portsmouth is home to the Insttute for Marine and maritme sectors. Several of the regions’s Science. Further Educaton Colleges, such Universites ofer relevant high quality as Bournemouth and Poole College Marine degree programmes in maritme science and and STEM Centre, Weymouth College; and engineering. However, while science and the Marine Skills Centre at Southampton engineering ofer excitng and well-paid careers City College universites and University of to graduates, maritme-related careers can be Southampton add to this signifcant regional less atractve to graduates than other higher- strength. profle engineering sectors (e.g. aerospace, automotve and the technology sector) as well Networks and networking other sectors, partcularly the fnancial sector. 5.22 There is a close working collaboraton between 5.21 Solent University’s Warsash Maritme Academy the region’s marine sector and the industry’s has earned a global reputaton for educaton, natonal “voice” Maritme UK109. Within training, consultancy and research services the region, Marine South East is an actve to the internatonal shipping, commercial networking group with a high level of industry yacht, and ofshore oil and gas industries membership. It actvely engages in innovaton over 70 years. Warsash’s core business, of in its own right. A synopsis is provided below. deck ofcer training, has itself become highly

BOX 5-5 MARINE SOUTH EAST

Founded in 2005 and based in Southampton Science Park, Marine South East is a business-led consortum of marine sector organisatons. The organisaton aims to promote productvity-led growth in the marine sector through innovaton, supply chain analysis, the promoton and encouragement of marine sector clusters, and the delivery of business support services to businesses traditonally in the South East of England, but also in other strong UK and European maritme regions110.

Since 2010, Marine South East has received funding from Innovate-UK for four projects covering informaton management systems, glycerine fuel research, monitoring for operatonal vessel efciency and hybrid electric propulsion systems111.

Marine South East also provides consultancy services to a network of 2000 maritme organisatons around the themes of ofshore and marine energy, maritme resource efciency, ports and marine operatons and skills and workforce development. The consortum has also worked on projects funded by the ERDF Interreg programme, the European Framework 7 Programme (predecessor to Horizon 2020) and the Carbon Trust112.

109Marine UK : htps://www.maritmeuk.org/about/about-us/ 110Marine South East website, ‘background’ (accessed via: htp://www.marinesoutheast.co.uk/Background/) 111InnovateUK, ‘database of funded projects from 2010/11 fnancial year to 1st March 2017 112Marine South East website, ‘projects’ (accessed via: htp://www.marinesoutheast.co.uk/Current_Projects/) 54 CONCLUSIONS commitment to Land Rover BAR (Ben Ainslie Racing) – could help to change the image. 5.23 Digital Enabling Technologies, especially Ensuring that the changing needs of innovatve autonomous solutons, are having a businesses are fully refected in skills provision transformatonal efect – partcularly in areas will be important more generally, and was a of the maritme industry which are “dull, dirty recurrent theme of the evidence gathered for and dangerous” and facing operatonal and this Audit. regulatory cost pressures. 5.26 Beyond this, the imperatve will be to ensure 5.24 The Innovaton South Marine and Maritme that small, innovatve frms are able to sector operates as an efectve cluster – contribute to and beneft from the wider albeit over a dispersed geography. There is a growth dynamic which is shifing quickly. network of businesses, research insttutons Innovaton South is facing competton from and universites with clear and strong inter- elsewhere – countries such as Singapore, connectons, and this is given additonal focus Norway, Japan, S. Korea and China have with reference to the marine environment. invested signifcantly in maritme clusters. The sector as a whole is evolving quickly and is In terms of opportunites associated with global in its reach. exploraton and understanding of the maritme environment, San Diego and Cape Cod have 5.25 Looking ahead, one of the challenges for been identfed as hubs of partcular note113. marine and maritme relates to recruitment. In mass producton shipping, and routne There is demand for highly specialist skills (as ship design, Innovaton South is unlikely to be illustrated by the case study of Planet Ocean able to compete – and it is unlikely to want and ecoSUB Robotcs). However, the belief to try. However, its knowledge-rich ofer is the sector “loses out”, partcularly to other can compete with the best in the world at rapidly evolving digitally-enabled sectors, such the technologically-sophistcated end of the as aerospace and automotve. In this context, spectrum. the impact of the America’s Cup – and the

How does the evidence in Chapter 5 help us capture the full economic potental of Digital Enabling Technologies?

• In the marine and marine sector, a supply of high calibre digital and engineering talent will be critcal to realising the signifcant growth potental. Fresh thinking is required to address the needs and responsibilites of employers, and ensure competton between providers does not frustrate the end goal • Maximising the full potental of Digital Enabling Technologies is the route to global compettveness in the sector and the right conditons for their deployment must be in place • Longer term – given links to defence – the marine and maritme sector is one in which Quantum technologies might start to be adopted and it will be important that the region is ready to respond

113Marine Autonomous Systems; An Embryonic Cluster with high growth potental. Smart Specialisaton Hub Innovaton Review Workshop – Southampton, 55 19th January 2016 6. APPLYING DIGITAL ENABLING TECHNOLOGIES – IN BIOSCIENCE

CHAPTER 5 – KEY MESSAGES

• Within bioscience, Digital Enabling Technologies are profoundly infuencing the development of medical data, devices, pharmaceutcals, and agrimetrics which are, in turn, transforming the delivery of health, social care and food security • The South has research strengths in both human and animal health. Corporate partners like Syngenta and Bayer have a strong research base in the region as do research organisatons like the Pirbright Insttute and Leatherhead Food Research • Bioscience in the wider South East114 is seeing strong organic growth in med tech, partcularly amongst SMEs and the South East boasts one ffh of the UK workforce (compared to 6% for London and 11% in the Midlands)115. • Many of these businesses are using Digital Enabling Technologies in the healthcare domain, an area where there is substantal growth potental

BIOSCIENCE AND ITS PRESENCE IN THE SOUTH signifcant digital component essental for their functonality and/or deliver health 6.1 The direct contributon of the life sciences related data. industry to the UK economy was valued at - genomics: the sampling, sequencing, £14.5 billion in 2015116. Productvity (measured analysis, interpretaton and applicaton of by GVA per employee) is estmated to be more human genomic informaton to improve than double the average for all industries, and clinical services. Along with digital health the sector generates a trade surplus of around and data harvestng, genomics form the £1.1 billion per year117. foundaton of personalised and precision medicine, a burgeoning opportunity in 6.2 ‘Bioscience’ and ‘life science’, ofen used health delivery. interchangeably, are diverse and complex • Biopharmaceutcals: the development and felds beneftng from several Innovaton producton of human, animal and plant South sectors: Data analytcs and security, therapeutcs, estmated by the OLS to employ 5G, advanced engineering and robotcs. By around 62,000 people natonally assessing our regional actvity this Audit • Plant and animal health: the development of delivers bioscience strengths in: technologies to detect, control and monitor pathogens and pest threats. • Med tech: the development and producton • Food research, security and agrimetrics: of medical devices and equipment, employing increasingly data and connectvity lie at the around 93,600 people natonally118. The Ofce heart of safe, efcient and sustainable food for Life Sciences highlights the growth of two producton, delivery and determining or tracking areas of increasingly important actvity: provenance. - digital health: products reliant on digital technologies and content, including 6.3 Across Innovaton South, there are around hospital and GP informaton systems and 500 businesses actve in med tech and medical data analytcs and visualisaton, biopharmaceutcals119. The four ‘core’ sub- as well as medical devices which have a sectors identfed above also have close

114Ofcial South East data do not refect Dorset. These statstcs do include the rest of Innovaton South, plus Oxfordshire, Bucks and Milton Keynes 115UK Medical Technology Sector Strength & Opportunity 2015 compiled by UK Govt 116PwC/ ABPI/BIA/ABHI/ BIVDA (2017), The economic contributon of the UK life sciences industry 117Associaton of the Britsh Pharmaceutcal Industry, Pharmaceutcal trade in the UK 118Ofce for Life Sciences (2016), Strength and Opportunity 2016: The landscape of the medical technology and biopharmaceutcal sectors in the UK 119 Ofce for Life Sciences (2016), Strength and Opportunity 2016: The landscape of the medical technology and biopharmaceutcal sectors in the UK 56 database estmates 430, which compares with around 260 in Oxfordshire. The University of Southampton Insttute for Life Sciences counted 557. scientfc links with other actvites concerned discovery, as the potental to screen multple with the use of biological resources, including samples and analyse complex data increases. industrial biotechnology. The cost of sequencing a single person’s genome has fallen to around $1,000, so the potental DIGITAL ENABLING TECHNOLOGY DRIVERS AND to gather and analyse populaton-level medical databases will increase substantally. This CHALLENGES… impacts on the nature of medical research (broadly speaking, increased data analysis and Digital Enabling Technologies are at the heart of less biological or chemical experimentaton) the transformaton of bioscience120: and opens up commercial opportunites for smaller research-driven businesses, freed from • First, a new market is developing in connected the high capital costs once borne by the big medical devices. This includes ‘smart assistve pharmaceutcal frms. technology’, devices helping people perform • Fourth, digital technology ofers a new tasks made harder by their conditon, and, opportunity to develop a more integrated when enabled with sensors, help the user, or approach to plant and animal health science. medical professionals, monitor performance. The UK’s strategy for animal and plant health Aggregate data from the widespread use of science research highlights an aspiraton for these devices contribute to wider medical a ‘UK Animal and Plant Health Internet of research. Sensor technology in the form of Things’ enabling faster detecton and analysis ‘smart pills’ can transmit data on the patent’s of animal and plant health risks124. This should response to medicaton, and the development deliver signifcant productvity gains for the UK’s of relatvely cheap, accurate and connected food producton sector, as well as developing diagnostc equipment is leading to hospital- the agricultural market for Digital Enabling standard diagnosis at home121. Linked with this, Technologies. As a facet of the digital and producton costs for personalised devices are genomic technologies migratng from health likely to fall through the development of 3D care, simpler and economic tracking of the food printng techniques122 and should harness design chain from producer to consumer is possible. and usability expertse. • Second, at an operatonal level, much of the 6.4 While digital technology makes it easier to scope for digitsaton in the health sector has capture, process and share data, securing yet to be realised. At a very basic level, health public ‘trust in data’ (partcularly as it relates service digitsaton is ofen seen as improving to human health) and confdence in its security transactonal processes (booking appointments and use is vital in realising the economic online, receiving informaton, and so on) as benefts125. This means that public confdence well as the digital hospital. But the mainstream in data regulaton will be key – but securing use of ‘machine learning’ to support clinical that confdence in ever more sophistcated decisions will lead to greater advances in care, systems will mean increased demand for and the potental to analyse and visualise cyber security products, as well as changes in multple patent records123. The UK has a informaton governance. fantastc opportunity to gain economically from health service digitsaton through the integrated NHS and its potental for robust data collecton. • Third, computng ability is driving down the cost, and increasing the efectveness, of drug

120This secton is partly drawn from Cosima Greton and Mathew Honeyman (2016), The Digital Revoluton: Eight technologies that will change health and care, The King’s Fund htps://www.kingsfund.org.uk/publicatons/artcles/eight-technologies-will-change-health-and-care 121Michael Montalto (2015), Hospital in the Home, The King’s Fund htps://www.kingsfund.org.uk/audio-video/dr-michael-montalto-hospital-home-victoria- australia 122Deloite (2017), Deloite 2017 Global Healthcare Outlook htps://www2.deloite.com/global/en/pages/life-sciences-and-healthcare/artcles/global-healthcare-sector-outlook.html 123Mathew Honeyman, Phoebe Dunn and Helen McKenna (2016), A Digital NHS? An introducton to the digital agenda and plans for implementaton, The King’s Fund; 124BBSRC (2016), A vision and high-level strategy for UK animal and plant health research to 2020 and beyond 57 125Stakeholder Workshop 5 (see Annex 1); Honeyman et al, p.21 OTHER TRENDS AND DRIVERS IMPACTING ON THE and worked through large research campuses. BIOSCIENCE SECTOR However, faced with looming patent expiries and a need to cut costs, big pharma has sought to outsource R&D and acquire smaller biotech 6.5 Three other drivers are relevant to the future frms129. Large corporate research campuses of bioscience in the South: have closed (such as, in the South, Pfzer’s R&D facility at Sandwich) and the sector has shifed • First, regulaton infuences the structure of the to more research being done through specialist sector and informs locaton decisions. Relatvely SMEs and universites. By focusing on our areas rapid and predictable approval processes of specialism, such as digitally-enabled med (compared with the United States) have been tech, Innovaton South is in a good positon to cited as important in supportng the growth of beneft from this trend. the European medtech and pharma sectors, and infuencing decisions to locate in the UK126. • Second, the ageing populaton is changing BIOSCIENCE SCIENCE AND INNOVATION ASSETS IN the nature of demand for healthcare. By THE SOUTH 2030, around 20% of the UK populaton will be aged over 65127. While older people are University research strengths enjoying actve, healthy lives for longer, they are more likely to live with complex conditons, 6.6 Across the range of subject areas related to requiring long-term management, increasingly biosciences, in at least one subject area, fve personalised and within the community, rather universites in the South are ranked in the top than within hospital setngs128. This is leading 20 insttutons natonally for research power to rising demand for innovatve medical devices (Reading, Southampton, Surrey, Sussex and that can be used remotely from the home. Greenwich) and fve by ‘grade point average’ • Third, in biopharmaceutcals, the structure of (Reading, Southampton, Surrey, Sussex and the industry – and the way in which innovaton Royal Holloway). Kent and Canterbury Christ takes place - have changed signifcantly. For Church are among the top 30 insttutons many years, the big pharmaceutcal frms, such natonally for research power and “grade point as Pfzer, GSK and AstraZeneca, absorbed rivals average” in at least one bioscience area.

Biopharmaceutcal

126Wendy Atkins (2012), ‘Europe takes medtech lead’, Financial Times FDI Magazine, Aug/ Sep, 70-1 htp://www.medtecheurope.org/sites/default/fles/ resource_items/fles/10082012_Financial%20tmes_Europe%20takes%20medtech%20lead_Backgrounder.pdf 127House of Lords (2013), Ready for Ageing? Select Commitee on Public Service and Demographic Change. Report of Session 2012-13, Paper 140 128David Oliver, Catherine Foot and Richard Humphries (2014), Making our health and care systems ft for an ageing populaton, London: The King’s Fund htps://www.kingsfund.org.uk/sites/fles/kf/feld/feld_publicaton_fle/making-health-care-systems-ft-ageing-populaton-oliver-foot-humphries-mar14.pdf 129Taylor, David (2015), ‘The pharmaceutcal industry and the future of drug development’, Pharmaceutcals in the Environment 41, 1-33. In 2010-12, Pfzer lost 41% of its revenue, solely due to patent expiry. htp://pubs.rsc.org/en/content/chapterhtml/2015/bk9781782621898-00001?isbn=978-1-78262-189-8 58 Table 6 1: Research Excellence Framework: Insttutons ranked within the top 30 natonally

Insttuton rank (of all UK insttutons)

Subject area Research power Grade point average

Clinical medicine Southampton (13) Southampton (28)

Sussex (17) Sussex (10) Biological sciences Southampton (26) Kent (23) Kent (29) Southampton (29) Portsmouth (30) Allied health professions, dentstry, Surrey (7) Southampton (3) nursing and pharmacy Southampton (24) Surrey (8) Brighton (27) Sussex (27) Psychology, psychiatry and neuroscience Sussex (13) Royal Holloway (6) Reading (15) Sussex (10) Southampton (18) Southampton (22) Kent (24) Royal Holloway (28) Public health, health services and primary Southampton (28) Southampton (9) care

Agriculture, veterinary and food science Reading (4) Reading (6) Greenwich (17) Greenwich (23) Canterbury Christ Church (27) Canterbury Christ Church (27)

[Source: Research Excellence Framework, 2014 ]

6.7 In additon to the cross-cutng assets in Digital the University Hospital Southampton Trust. Enabling Technologies highlighted in Chapter The University is a core partner in the new 3, key bioscience research assets include the Rosalind Franklin Insttute at Harwell, which Insttute for Life Sciences at the University of will fuse physical science, engineering and life Southampton. The Insttute has a partcular sciences to drive disruptve solutons to health focus on the development of engineering, challenges. The University of Southampton physical and chemical science as well as also has signifcant strengths in informatcs mathematcal and data solutons to address which are important in relaton to bioscience. health challenges, with collaboratve links to

BOX 5-1 GLOBALDIGITAL MARINE ENABLING TRENDS, TECHNOLOGIES 2030 AT UNIVERSITY HOSPITAL BOX 6-1 SOUTHAMPTON

Innovaton in informatcs is good for our health and our NHS: Innovaton in the way health professionals and researchers can collect, store, retrieve, analyse and use informaton about patents, their health and their treatments can improve patent care, NHS productvity and reduce costs. Beter, faster and more “human-centred” healthcare IT systems have resulted in a 10% improvement in professional productvity. That translates into at least £50M of equivalent savings or efciency gains from more productve staf in the local health wage bill, or £7 Billion across the NHS human capital estate.

In September 2016, University Hospital Southampton (UHS) achieved natonal recogniton as an IT Centre of Excellence and Global Exemplar for Clinical Informatcs development. At least two things

59 BOX 6-1 5-1 CONTINUEDGLOBAL MARINE TRENDS, 2030 have been essental to the success of the UHS Informatcs Strategy: putng the clinician and health professional - the users - at the heart of any design; and collaboraton with innovatve, fexible SMEs, who ofer good value for money, rather than contractng with large IT companies.

As an example, this approach is now proving its value in the challenging process of digitsing all historic and future medical records held by UHS, more than 2 million, by the end of 2017.

UHS Lifelines - a new global electronic record interface at UHS: It is essental that clinicians and health professionals can visualise a patent’s entre clinical record in a simple way, before drilling down into key clinical details and facts. The interface is highly adaptable as new data streams become available, or new tools such as “hover over” visualisaton. It represents a major advance in speed over “list mode” access to PDF documents and electronic record sheets. Lifelines also allows the clinician to zoom down into an area of interest, and flter out unwanted material.

The Lifelines concept has its origins in the 1990s in a university laboratory in the United States. The idea was never turned into a practcal clinical system then and to date the UHS Lifelines data visualisaton methodology is unique in practcal use in commercial and NHS clinical informatcs systems. It illustrates the power of agile, iteratve, ground upwards development by a small team - one clinician, one systems consultant and one IT Manager at UHS - to produce innovaton at minimal cost within a public sector organisaton to clear end user specifcatons.

There is considerable potental for further contributons from public, commercial and SME partnerships to drive natonally signifcant developments of Digital Enabling Technologies across Healthcare. Internatonally, through Lifelines, there is collaboraton with the Hyland Corporaton of Cleveland Ohio on a ground-breaking project to manage the fast transiton from paper to global digital record storage and access.

Digital Health has educatonal and job creaton opportunites: In recogniton of the need to build the skill sets among programmers who also understand the complexites of clinical systems, the UHS IT team has started an informal partnership with the School of Media Arts and Technology at Southampton Solent University to develop interest among undergraduates in health care programming and visualizaton. Electronics and Computng Sciences at the University of Southampton (ranked 8th in the REF) are working with medicine and the Insttute for Life Sciences to scope out undergraduate courses in digital health. An educated workforce will fuel our SMEs and export potental.

The Southampton Trust is also one of 11 NHS Genomic Medicine Centres, and in 2016, launched a project to process the genomic data of cancer patents to help clinicians deliver personalised treatment.

60 feld and improve agricultural sustainability and productvity.”

6.10 The Natural Resources Insttute at the University of Greenwich, Medway, focuses on agricultural pest and disease management, partcularly with applicaton to the developing world.

Non-university research insttutons

6.11 The South contains a number of natonally- signifcant bioscience research insttutes associated with food research as well as animal and plant health. These include:

• The Pirbright Insttute at Woking, one of the eight Natonal Insttutes of Bioscience130. The Pirbright Insttute focuses on the preventon Digital Health and control of viral diseases in livestock. The Insttute is publicly funded via the BBSRC, with support from the Wellcome Trust, the Bill and 6.8 The School of Life Sciences at the University Melinda Gates Foundaton and industry, and is of Surrey also maintains a bioinformatcs core developing an Animal Health Innovaton Hub to facility, providing data analysis and computer support future commercial collaboratons131. simulaton capabilites for use by commercial • The Animal and Plant Health Agency, near researchers, and academics. Weybridge, operates natonally as an executve agency of Defra. APHA undertakes ‘applied’ 6.9 There are also signifcant research strengths in research into disease and pest control and areas relatng to plant and animal health. The maintains a commercial arm (APHA Scientfc), University of Reading is a leading centre for providing testng and data analysis to scientsts the study of food, health and the environment, in the UK and internatonally132. with strong expertse in data science and • NIAB-EMR, at East Malling near Maidstone, a modelling. It is one of 4 partners, including hortcultural research insttute focused largely Rothamsted Research, in Agrimetrics - the on the development and protecton of fruits. world’s frst Big Data Centre of Excellence for • Kew Gardens Millennium Seed Bank, at the whole food system. At the core is a big data Wakehurst Surrey houses the largest wild plant science platorm, which includes sofware tools seed bank in the world. that make the integraton of data according • The Leatherhead Research Insttute at Epsom, to users’ needs possible. At its launch, then largely funded by industry, provides expertse Life Sciences Minister George Freeman MP and support to the global food and beverage said: “We are investng in the use of data in sector. agriculture to transform the way crops and livestock are grown and bred. Using data, we 6.12 There are strong links between the South’s can identfy new genetc traits, spray only crops agricultural research insttutons and the with disease, and use less water and energy university base in the utlisaton of Digital for modern lower input farming. The expertse Enabling Technologies, evidenced by current we’re supportng at Agrimetrics will positon collaboraton between APHA, Pirbright and the the UK a world leader in this fast-emerging University of Surrey:

130The Pirbright is the only Natonal Insttute of Bioscience in the South (the others are located in Cambridge, Norwich, Hertordshire, Aberystwyth and Edinburgh). 131 Pirbright Insttute, www.pirbright.ac.uk 61 132Defra/ APHA (2015), Science Strategy 2015-20 htps://www.gov.uk/government/publicatons/apha-science-strategy-2015-to-2020 DIGITAL ANIMAL HEALTH: COLLABORATION WITH THE BOX 6-2 UNIVERSITY OF SURREY SCHOOL OF VETERINARY MEDICINE

Opened in April 2016 in collaboraton with the animal health company Zoets, vHive133 is using digital technologies – including wearables, apps and sensors – to explore applying Big Data and the Internet of Things to animal health134. vHive – the veterinary Health innovaton engine – involves three centres of excellence within the University of Surrey – the new School of Veterinary Medicine, the 5G Innovaton Centre and the Centre for the Digital Economy (CoDE), part of the Surrey Business School. Its aim is to drive innovaton in animal health to create new opportunites for research and business in the region and natonally. The project involves Zoets – the global leading animal pharmaceutcal company. vHive was launched at the end of April 2016.

Founded in October 2015 as part of the Faculty of Health and Medical Sciences, the £45m School of Veterinary Medicine is a strategic partnership between the University of Surrey and external partners including The Pirbright Insttute, the Animal and Plant Health Agency, Surrey Wildlife Trust and Marwell Wildlife135.

Commercial based at Basingstoke and employing 800 people globally, a major innovator in lower 6.13 Within the med tech sector, larger frms limb prosthetc and orthotc products. In 1990, include Roche Diagnostcs (based at Burgess Blatchford developed the frst commercially Hill) and Elekta, a Swedish-owned producer available microprocessor controlled prosthetc of radiotherapy equipment and sofware knee; its latest products ofer complete based at Crawley. Both of these form part microprocessor-controlled lower limb of the West Sussex Health and Life Science systems. Their Lynx limb system, designed Cluster, described below. Other signifcant and manufactured by Blatchford, has been med tech frms include Philips Electronics at selected as a fnalist in the Rehabilitaton and Guildford, which develops wearable health Assistve-Technology Products category of the monitoring devices and Hallmarq Veterinary 19th Annual Medical Design Excellence Awards Imaging in Guildford that develop and market in the US. Dr David Moser, Head of Research internatonally (23 countries) MRI machines for at Blatchford, was awarded the prestgious standing horses. An SME of 30 employees they George Murdoch medal by the Internatonal are now the recipients of two Queens Awards Society of Prosthetcs and Orthotcs UK in for Enterprise. 2016.

6.14 Specifcally within the digital health sub-sector, there are 54 businesses on the Ofce for Life Science’s database, all of which are SMEs, with the excepton of two larger providers of health and social care management sofware (Hospedia, based in Slough, and System C, a US-owned frm based in Maidstone).

6.15 The South has partcular strengths in prosthetcs and orthotcs, with Blatchford,

133vHive Animal Health website, ‘About’ (accessed via: htp://www.vhiveanimalhealth.com/) 134University of Surrey response to the Innovaton South Science and Innovaton Audit call for evidence, March 2017 135University of Surrey website, ‘School of Veterinary Medicine’ (accessed via: htp://www.surrey.ac.uk/school-veterinary-medicine) 62 BOX 6-3 5-1 MEDTECH IN WEST SUSSEX

Around 500 businesses across the South are engaged in the development of medical devices and the design and manufacture of technologies used to identfy and test for diseases. In West Sussex, the County Council has mapped the local med tech sector, highlightng a number of examples of innovaton, partcularly in relaton to imaging technology with applicatons in oncology:

Elekta is a Swedish-owned company specialising in equipment and sofware used to improve, prolong and save the lives of people with cancer and brain disorders. Elekta’s global oncology business is headquartered in Crawley, with around 350 of the site’s 900 staf employed in R&D. Work is underway to develop the new Cornerstone Hub, Elekta’s internatonal innovaton campus, adjacent to its existng site in Crawley, which will open in December 2017136.

The technology being developed by Elekta include the world’s frst high-feld MR linac, a targetng system using novel sofware to capture detailed images of tumours during treatment, supportng improved therapy plans.

Also based at Crawley, Toshiba Medical Systems is a leader in developing the diagnostc capabilites of medical imaging technology, including CT and MRI systems and x-ray devices. Tesla Engineering, based at Storrington, designs and manufactures specialised magnets for use in MRI systems and cancer therapy (among other uses)137.

Alongside these large and well-established businesses, some 70% of the enterprises in West Sussex’s medtech cluster are SMEs, according to the County Council’s analysis. The county’s business base is supported by medical and scientfc assets including the University of Brighton and the University of Sussex’s School of Life Sciences, which utlises and develops advanced imaging and data analysis sofware at its Genome Damage and Stability Centre. Recently, the University of Sussex has received new investment into the forthcoming Wolfson Centre for Biological Imaging, to drive research into cancer and neuroscience138.

6.16 The major internatonal pharmaceutcals frms. However, the legacy of historic frms maintain a signifcant presence in the investments remains important, and South. Examples include Eli Lilly at Basingstoke, concentratons of largely SME-focused actvity Sanof Avents (Guildford and West Malling), have emerged on former single-occupier GSK (Crawley, Worthing, Maidenhead, Slough research parks, such as Discovery Park near and Weybridge), Novarts (Camberley), Merck Sandwich (see case study below). (Maidenhead), and Pfzer (Walton Oaks, Sandwich and Maidenhead).

6.17 Global changes in the structure of the pharmaceutcal industry have reduced employment within the major life science

136Elekta Cornerstone Hub, www.cornerstonehub.net 63 137West Sussex County Council, West Sussex Health and Life Science Cluster, 2016 138University of Sussex, press release, 25 April 2017 BOX 6-4 4-1 VENOMTECH – LIFE SCIENCES AT DISCOVERY PARK Early days – and the formaton of Venomtech

In his work at Pfzer based at Sandwich, East Kent, molecular biologist, Steven Trim, developed expertse in both animal venom and drug discovery, a rare combinaton. In 2010, having lef Pfzer, Steven used his own resources to start up Venomtech, initally in rented premises in a pet shop in Ramsgate, and later at the Enterprise Hub on the University of Kent campus at Canterbury.

When Pfzer sold its Sandwich facility, the site was re-purposed as Discovery Park, a mult-occupancy science park focused on life sciences. Venomtech moved there in 2012, atracted initally by its high- quality facilites, convenient locaton and the opportunity to network with other drug discovery researchers. Most fnance has been secured through angel investors and crowd funding.

Venomtech today

Current ofers include ant-coagulants and diabetes medicaton, with customers including Pfzer and AstraZeneca. Around 60% of sales are for export, especially to the United States and more recently Japan. In spring 2017, it launched its frst product for sale to the cosmetcs industry, opening up a new market. This past year, the frm has recruited its frst full-tme director of business development.

The impact of Digital Enabling Technologies...

Venomtech’s new cosmetc product has been developed through the analysis of multple public sources of data to identfy protein paterns in animal venom that could then be replicated synthetcally. Accessing and analysing data on this scale has only recently been possible.

... and the value of the Discovery Park ecosystem

In principle, Venomtech could have located anywhere – the reason for choosing East Kent related to Steven’s original place of residence and that of the frst staf. But being based within a community of life science businesses has contributed to Venomtech’s growth: Discovery Park ofers a community of like-minded businesses and “people who have bought into that community understand you”. Links between businesses on the Park are proactvely supported by the Park’s management, and this has been important in helping to overcome what can be a ‘lonely existence’ as a small young company in a very specialised market. Several of Venomtech’s projects have involved collaboraton with other researchers based at Discovery Park, and there is a concentraton of businesses within the frm’s supply chain (such as a specialist pharmaceutcal packaging and dispatch company). The PhD student employed by Venomtech is based at Canterbury Christ Church University’s Industry Liaison Lab at Discovery Park, and the frm has also employed apprentces via East Kent College’s Discovery Park site.

Relatonships with Canterbury Christ Church have grown over tme. Currently, Venomtech partcipate in fnal-year undergraduate programmes at the University, and Steven ofers lectures at the University – ‘spinning in’ commercial drug discovery expertse.

The future

Venomtech has promising opportunites in both cosmetcs and drug discovery and has a growing range of markets – and is on course to achieve £1 million turnover by 2019.

64 6.18 There are also signifcant commercial assets term, the contributon to growth can be very in the food, plant and animal health sector. signifcant, ofen afer the original innovaton Syngenta, a global agribusiness, maintains has been commercialised by the major its largest R&D centre at Jealot’s Hill near pharmaceutcal companies139. Bracknell. Combined with Tozer Seeds, UK Head Ofce in Surrey, they oversee the 6.20 Opportunites to co-locate small research majority of seeds grown for crop producton in businesses with larger corporates (such as the UK. Both work closely with Royal Holloway. at Discovery Park) has been highlighted by Syngenta also works closely with Reading and partcipants in the development of this Audit Southampton Universites. Syngenta deploys as important in enabling them to secure digital technologies by coupling big data investment and the commercialisaton of their analytcs with drone monitoring to tackle weed research140. growth. Bayer’s UK and Ireland operatons (including animal health and pharmaceutcals) 6.21 The distributon of Innovate UK grants in are based at Reading. In distributon, Bracknell, bioscience provides a way of looking at Berkshire is home to Waitrose a chain of innovaton within the sector. Innovaton Britsh supermarkets, which forms the food South insttutons have won 10 per cent of retail division of Britain’s largest employee- those in recent years. Between 2010 and owned retailer, the John Lewis Partnership. 2017, grants to the value of £36.7 million were allocated in the Innovaton South area Evidence of innovaton within the bioscience, healthcare and agri (broadly, plant and animal science) – 10% of 6.19 The bioscience sector is inherently innovatve – total UK grants allocated to these themes. The although the future economic and commercial majority of these were directed towards SMEs; beneft of the early stage research driving some examples including Digital Enabling breakthroughs ofen goes unrecognised. As Technologies are: a recent industry report notes, in the long

Table 6 2: Examples of Innovate UK grants in bioscience

Lead partner Descripton

Rescon Ltd, Hart Development of a low-profle microphone system to detect heart abnormalites Siemens, Surrey Heath Development of an online allergen sensor to detect allergen materials in processing equipment University Hospital, Southampton Integrated digital platorm for the management of chemotherapy in hospital

University of Reading Tackling barriers between the development of assistve living products aimed at older adults and their take-up by target groups University of Southampton/ Oxford Gene Tumour profling based on next generaton sequencing of genes and variants Technology OptSense Ltd, Horsham Development of a system for rapid detecton of hazardous bacteria in foodstufs Fruiton PO Ltd, Canterbury Developing a vision system to enhance phenotyping in apples

Lucite Internatonal, Southampton Genome-scale metabolic modelling to optmise biomanufacturing (in partnership with Cambridge University)

139PricewaterhouseCoopers (2017), The economic contributon of the UK life sciences industry, p.14 65 140SQW, interview with Centauri Therapeutcs, April 2017. Networks and clusters 6.25 FortsNet is part of a growing body of evidence of signifcant med tech business and 6.22 The network of Academic Health Science innovaton actvity in the South. Research Networks (ASHNs) exists to bring NHS health carried out for the University of Southampton providers, bioscience companies and academic identfed over 300 med tech companies in researchers together to develop practcal the Solent and Enterprise M3 areas, many of solutons to health and social care problems. which were involved in product innovaton, In the Innovaton South area, the Kent, Surrey but which may not have previously appeared and Sussex ASHN is partcipatng in one of fve on the radar of the innovaton support natonal ‘test bed’ initatves, sponsored by agencies142’. In West Sussex, the County Council NHS England to assess the potental for the has facilitated the creaton of the West Sussex introducton of new technology into health Health and Life Sciences Cluster; so far around and social care. The Technology Integrated 140 related companies have been identfed143. Health Management (TIHM) project links the Further east, Discovery Park operates as a ASHN with University of Surrey, Royal Holloway cluster, underpinned by Pfzer’s contnuing University of London, Surrey and Borders presence. The recent initatve to develop NHS Trust, the Alzheimer’s Society and ten the Biogateway network aims to extend links technology companies to provide patents and between business and academia to the wider carers with wearable sensors and monitors to life science sector in Kent, while the OBN life increase their ability to live independently. science network has a substantal membership base around Reading and the Thames Valley144, 6.23 The TIHM project highlights the potental where there is also a cluster of health-related to build links between the South’s digital contract research organisatons. innovaton capabilites and the healthcare system. For example, the frst phase of the Skills and talent project saw the devices tested at the 5G Innovaton Centre in Guildford before they 6.26 The bioscience industry is highly research- were rolled out across a network of 350 intensive, and increasingly so. Skills required by homes. It also highlights how Digital Enabling the industry tend to be quite highly specialised Technologies are blurring traditonal sector and increasingly driven by the need to manage boundaries: of the companies involved in and interpret data. As a recent report by the project, some (such as Docobo, based at the main biopharmaceutcals industry body Leatherhead) are established specialists in highlights: “new medicines are now less digital health; others (such as Arqiva, a major likely to have been identfed through high- communicatons infrastructure company based throughput screening of banks of compounds, at Winchester) are using their wider range and are more likely to have been created of digital capabilites to develop applicatons following mining of data... These changes will specifc to personalised care141. have greatly infuenced the skills required by the industry”145. Broadly, the report calls for a 6.24 Other networks include FortsNet, supported greater emphasis on mathematcs skills at all by the Insttute for Life Sciences at the levels. University of Southampton, which links med tech businesses engaged in developing solutons to musculoskeletal difcultes with clinicians, academics and patents.

141Surrey and Borders Partnership NHS Foundaton Trust, TIHM for dementa htp://www.sabp.nhs.uk/thm/partnership 142University of Southampton Insttute for Life Sciences, Enterprise actvites in the life sciences (presentaton submited through call for evidence) 143Stakeholder Workshop 5 144OBN, www.obn.org.uk 145Associaton of the Britsh Pharmaceutcal Industry (2015), Bridging the skills gap in the biopharmaceutcal industry: Maintaining the UK’s leading positon 66 in life sciences, p. 5 CONCLUSIONS health and social care and plant and animal health. In biopharmaceutcals, the way in 6.27 Bioscience is an industry in which the UK has which the life science industry in the South has global strengths. The way in which the sector ‘bounced back’ from the shock of restructuring works has been transformed in recent years, (for example in the transformaton of Discovery partly due to a wave of signifcant corporate Park) is impressive. restructuring over the past decade, and partly due to the impact of new technology, both on 6.29 More specifcally to the core theme of the products that can be brought to the market this Audit, there are opportunites to link (such as connected medical devices) and on the South’s strengths in Digital Enabling the way in which research is carried out (with Technologies with the growth of the sector. the creaton and management of complex data There is evidence that this is happening – increasingly central to the research process). for example, in the case of the Technology Integrated Health Management project 6.28 In the South, bioscience is a signifcant, highlighted above – and there are likely and high-value, sector. There is strong to be wider opportunites in the security representaton from the larger bioscience and management of data as well as in the businesses and the region has partcular development of new products and services. capabilites in med tech, and digital health The challenge for Innovaton South is to bring applicatons linked to changing demand for about the optmum conditons to enable that growth.

How does the evidence in Chapter 6 help us capture the full economic potental of Digital Enabling Technologies?

• Disruptve innovaton in bioscience shows how Digital Enabling Technologies are blurring traditonal sector boundaries – this process must be supported in order to fully exploit opportunites for further innovaton • The bioscience industry will only transform important areas of daily life – health/social care and food security, for example – if the high level digital skills needed are in good supply • It will be important that public confdence is built in the use and security of data and the range of benefts that might follow is fully artculated and understood • There will be a need to ensure that clusters and innovaton “hotspots” are supported and collaboratve linkages stmulated

67 7. APPLYING DIGITAL ENABLING TECHNOLOGIES – IN ADVANCED ENGINEERING

CHAPTER 7 – KEY MESSAGES

• The South has an outstanding depth of expertse in relaton to advanced engineering, much of it stemming originally from the defence sector – and the assets within and around Farnborough/Fleet and in the Solent need to be recognised fully • Research strengths in advanced engineering are considerable and go deep and wide across the region. Insttutons like the University of Surrey and the University of Southampton have some of the strongest engineering research in the UK. Several smaller, younger universites (e.g. University of Portsmouth, University of Brighton and University of Greenwich) are also ranked very highly in relaton to aspects of advanced engineering. It is a region-wide competence and asset with considerable depth • The South is the chosen locaton for a number of the UK’s leading engineering businesses, such as BAE Systems, Airbus, QinetQ, Roke/Chemring and Jankel which are predominantly defence-related. Other types of leading-edge and research-intensive engineering frms are well-represented too: Ricardo (based in Shoreham), for example, supplies the McLaren Formula One team (based in Woking) and there is a huge array of specialist engineering SMEs. • The relatonship between advanced engineering and Digital Enabling Technologies is symbiotc. Advanced engineering disciplines are key to unlocking leading-edge Digital Enabling Technologies and digital enabling technologies are the key to future innovaton in advanced engineering. In the region, there are many examples of this relatonship, and business growth is following • The current success of the sector is self-evident but the potental for greater innovaton and growth is considerable if the disparate areas of expertse in digital enabling technologies can be harnessed in an integrated fashion

ADVANCED ENGINEERING AND ITS PRESENCE IN 7.2 Advanced engineering harnesses digital THE SOUTH enabling technologies and at the same tme is transformed by them. The combinaton of advanced engineering and new digital 7.1 Advanced Engineering is the applicaton of technologies is driving the next wave of knowledge and advanced technologies to industrial revoluton, commonly referred solve industrial problems and create wealth. to as Industry 4.0146. In the future “industry It underpins all industrial sectors that involve 4.0” world, the creaton of value is focused manufacturing, design and technology-based on the manipulaton of data for the designs services. It translates creatvity and ideas into of systems, processes and products all of physical realites and new products. which can be digitally transmited to the most appropriate and cost efectve manufacturing locatons and/or operatonal centres as

146Cornelius Baur and Dominik Wee (2015), Manufacturing’s Next Act, McKinsey 68 needed. The elements of the supply chain will manufacturing), Thames Valley Berkshire, be connected in an internet of everything, Surrey and North Hampshire150. Three of the where all dependencies are considered, waste South’s local enterprise partnership areas are is minimised, and compettve advantage goes in the top ten natonally for manufacturing to the owner of the most innovatve product GVA per worker151 and this refects the designs with the most integrated systems for importance of the South’s concentraton the delivery of the product or service. The of advanced engineering actvity in driving impact of this to the intellectual economy of manufacturing productvity elsewhere in the the UK will be signifcant. UK. 7.3 Natonally, the contributon of advanced DIGITAL ENABLING TECHNOLOGY DRIVERS AND engineering to innovaton and productvity growth is signifcant. The manufacturing CHALLENGES... sector alone accounts for 68% of business 7.5 Advanced engineering is increasingly expenditure on research and development dependent on the utlisaton of digital and has a high propensity to export (around technologies to maintain competveness in 25% of output is exported), while over the the global marketplace. Engineering design is past decade, productvity (measured in GVA largely digital with modelling and simulaton per hour worked) has grown around three capable of allowing complex products to tmes faster than in the economy generally147. be developed, manufacturing planned, Over the long term, general manufacturing and products tested and certfed without employment has declined substantally as the numerous stages of prototyping and physically UK’s role in mass producton has reduced – but testng. employment in advanced engineering is rising and as a consequence, average manufacturing 7.6 Manufacturing, quality inspecton, earnings are substantally above those in the maintenance, monitoring of products and economy overall148. Increasingly, digitally- reliability is all dependent to varying degrees enabled advanced engineering actvites are on the use of robotcs, sensors, on-line located away from sites of producton, with telemetry and simulaton. A combinaton of R&D taking place in diferent locatons to the big data sets, machine learning and artfcial physical output. intelligence allows process optmisaton, cost reducton, enhanced reliability and 7.4 The South is a powerhouse of UK advanced improved supply chain logistcs. The internet engineering R&D, historically driven by a of everything152 allows data to be transmited concentraton of defence interests and civil across the supply chain between companies marine, telecoms, automotve and aerospace and within companies, linking machinery to industries. It has major innovaton assets - the design studio, the materials supplier to the leading universites, research and innovaton recycling facility. insttutes, established blue chip natonal and multnatonal engineering companies with a 7.7 Products can be monitored in real tme proud record of nurturing engineering start-up remotely. Simple feedback loops used to businesses supported by an extensive network control machinery and adjust processes are of business parks and enterprise centres149. now replaced by predictve algorithms. Rolls- The data show 113,500 people work in Royce knows how each of its aero engines advanced engineering across the region (15% is performing at any one tme and can take of England total) with strong concentratons of pre-emptve acton to address performance advanced engineering employment in Solent problems; car companies can predict when a and North Kent (both traditonal centres of

147EEF (2016), UK manufacturing 2016/17: The facts 148ONS, ASHE (2015). Mean gross annual pay in manufacturing in 2014 was around £31,500, compared with around £27,600 across the economy. 149ONS, BRES (2015) 150ONS, BRES (2015) 151Coast to Capital LEP (2016), Advanced Manufacturing and Engineering: Sector Report, p.20 69 152The Internet of Everything has become a catch-all phrase to describe adding connectvity and intelligence not only to almost every device but to people, processes and data as well in order to give them special functons. Also see cisco FAQs body press is going to go out of specifcaton beforehand allowing down tmes to be scheduled; McLaren monitors its formula 1 cars contnuously using advanced telemetry to dynamically determine race tactcs. As the link between a product and its suppliers is maintained over tme, the business models for advanced engineering companies is evolving to embrace the supply of a service rather than on just the manufacture of a product – a process that is critcally dependent on digital enabling technologies.

7.8 Key technology driven catalysts for the future153:

• Flexible manufacturing – the introducton of 3D printng (additve manufacturing) which allows rapid changes in product design (no tooling needed) and the distributon/dispersion of manufacturing sites. • The internet of things applied to industrial Robotc Arm processes linking the entre supply chain, facilitatng Industry 4.0 and prioritsing data as 7.9 Advanced engineering is partcularly the key value asset. For businesses producing susceptble to cost and compettve pressures high-value products, such as BAE Systems, and this afects the nature of the South services now contribute around 50% of partcularly, because it is a high-cost locaton. revenues154. Contnual innovaton and disrupton is a core • Advances in robotcs – resultng in greater consttuent of growth within this sector and human-machine interactons and machine this comes from the R&D facilites which learning. This will result in robots engaging in dominate the South. more complex tasks to reduce cost, increase precision and reliability. The consequence being 7.10 Government support within the South for this to reduce the need for semi-skilled labour but sector is most strongly impactul in the area increasing the need for technical skills in the of defence procurement and the approach workforce. taken by Government to the commercialisaton • Developments in new materials – which can of defence-related innovaton. As well as result in sensors, nanostructures, designer impactng on overall demand for fnal products, composites are tools that facilitate new product Government purchasing policy also afects the concepts, underpin the practcal realisaton of way in which Digital Enabling Technologies are technologies such as autonomous systems but deployed, with prime manufacturers cautous may require high precision manufacturing155. about investng in untested technologies (such • The need to protect digital supply chains – the as some applicatons of quantum technologies) emergence of a digital engineering landscape untl demand is refected in the procurement makes critcal processes vulnerable to atack, process. The Government should be aware of increasing the need for enhanced cyber the investment in R&D made by the intellectual security for IOT devices, especially advanced assets and the businesses located in the South technologies, such as autonomous vehicles and and the impact on GVA, job security etc. which connected cars. results in this actvity.

153This secton is partly drawn from The Manufacturer (November 2016), Five trends reshaping manufacturing; Stephanie Shipp et al (2012), Emerging global trends in advanced manufacturing, Alexandria, Virginia: Insttute for Defence Analyses; Marian Mueller et al, (2017), 2017 Industrial Manufacturing Trends, PricewaterhouseCoopers 154Aston Business School (2014), Servitsaton Impact Study 155Bill O’Neill (2014), ‘Small is beautful: Why ultra-precision manufacturing is such a big deal’, Insttute for Manufacturing Review 1 70 ADVANCED ENGINEERING INNOVATION ASSETS IN power, according to the Research Excellence THE SOUTH Framework, while the University of Surrey is the second highest ranked university. In general engineering, Southampton is again Universites the UK’s highest ranked university by research power. Overall, the South contains fve 7.11 The South has some outstanding university insttutons ranked in the top 20 natonally research assets, which are judged as world- in relevant research areas (Greenwich, class. In the feld of electrical and electronic Portsmouth, Southampton, Surrey and Sussex), engineering, metallurgy and materials, the and a further four ranked in the top 30: University of Southampton is the highest- ranked university in the UK by research

Table 7 1: Research Excellence Framework, 2014: Insttutons ranked within the top 30 natonally

Insttuton rank (of all UK insttutons)

Subject area Research power Grade point average Portsmouth (16) Greenwich (14) Aeronautcal, mechanical, chemical and Greenwich (19) Brighton (17) manufacturing engineering Brighton (21) Portsmouth (18)

Chemistry Southampton (8) Southampton (12) Reading (28)

Electrical and electronic engineering, Southampton (1) Southampton (6) metallurgy and materials Surrey (2) Surrey (14) Reading (23) Reading (23) Greenwich (27) General engineering Southampton (1) Southampton (15) Surrey (14) Surrey (25) Sussex (26) Physics Southampton (17) Southampton (11) Surrey (24) Surrey (21) Royal Holloway (27) Portsmouth (24) Sussex (30) Kent (29)

7.12 The South’s strengths in Digital Enabling consultancy and certfcaton company based Technologies are directly relevant to its at Shoreham) has led to the establishment research strengths in advanced engineering. of the Sir Harry Ricardo Laboratories at the Examples of university research centres include University’s Advanced Engineering Centre, the Rolls-Royce University Technology Centre specialising partcularly in low carbon internal for Computatonal Engineering, the Microsof combuston systems. Building on this, the Insttute for High Performance Computng, University has recently become the internal applied to Engineering, and the Zepler combuston ‘spoke’ for the UK Advanced Insttute, the UK’s largest photonics research Propulsion Centre. Refectng the importance insttute, at the University of Southampton156; of the defence sector in the South, the and the Centre for Automotve Engineering at University of Brighton’s Vectronics Research the University of Surrey, which has research Centre is also the only academic centre of links with McLaren (based at Woking) as well excellence conductng research in vehicle as the major automotve manufacturers. electronics sponsored by the Ministry of At the University of Brighton, partnership Defence. with Ricardo plc (a technical engineering

156The University of Southampton also has strategic partnerships with both Network Rail and the Natonal Grid, focused on high-voltage work, infrastructure and distributed electrical systems. htp://www.southampton.ac.uk/news/2016/07/green-electrics.page htp://www.southampton.ac.uk/engineering/research/themes/geomechanics_and_environmental_geotechnics.page 71 htp://www.highvoltage.ecs.soton.ac.uk/research/conditonMonitoring.php BOX 7-1 4-1 RICARDO157

Early days – and the formaton of Ricardo

Ricardo plc is a global engineering and environmental consultancy business. Founded by Sir Harry Ricardo in 1915, the company has a long history of innovaton, startng in the First World War with the development of the frst Britsh-designed tank engine to be mass produced. From the 1920s onwards, Ricardo was a leader in automobile engine design, with a signifcant presence in the motorsports industry. In 2010, this included collaboraton with McLaren on the design and development of the M838T engine. Ricardo also has a long history of innovaton in the eliminaton of waste and the efcient use of natural resources, as well as in the supply of technology to the defence industry.

Ricardo now employs over 2,700 engineers, scientsts and consultants worldwide.

The signifcance of Digital Enabling Technologies

Ricardo Rail’s range of ‘Intelligent Rail’ sofware uses data to contnually monitor rail track conditons. Ricardo Sofware ofers simulaton and analysis tools for engineering in a range of industries. While not a manufacturing business, Ricardo uses digital technologies to add signifcant engineering value.

Key collaboratons

Firms working with Ricardo on engineering solutons include McLaren, Volkswagen-Audi Group, Jaguar Land Rover, Ford, Aston Martn and Toyota; in additon, the business acts as an advisor to several governments and runs the UK’s Natonal Atmospheric Emissions Inventory.

Afer placing test equipment at the University of Brighton in 1995, the Sir Harry Ricardo Laboratories were established in 2006, linked with the part-funding of a Brighton academic post158.

Plans for the future – and key challenges

Ricardo’s foresightng and analysis of future trends partcularly focus on the impacts of digital technology. The frm’s current focus is on energy and infrastructure; the use of advances in online technologies and autonomous vehicles to relieve the pressure on transport networks; and waste minimisaton.

Defence, Space, Satellite & Sea SMEs. For example, the University of Surrey has pioneered research into small, low-cost 7.13 Linking engineering and data science, the space mission since the 1970s, leading to the South has partcularly strong capabilites in establishment of SSTL (see case study 7-1 space-enabled technology. Whilst civilian below). space assets tend to be coordinated from the Satellite Applicatons Catapult in Harwell, 7.14 Currently, Surrey Space Centre conducts military space assets and R&D are provided research into satellite design, control and by a number of defence organisatons in the applicaton, with close contnuing collaboraton South, including Airbus, Lockheed Martn, with SSTL. The Satellite Applicatons Catapult Serco, L3-ASA, SSTL and a large number of also supports the South Coast Centre of

157Drawn from www.ricardo.com and www.ricardo100.com 158University of Brighton, Case study: Sir Harry Ricardo Laboratories at the University of Brighton 72 Excellence in Satellite Applicatons, based 7.15 Surrey Research Park is a university-backed at the University of Portsmouth: refectng asset within the region that is partcularly the cross-sectoral nature of digital enabling relevant to the development of advanced technologies. Key market areas for the use of engineering. As the case study below satellite data and technology developed by highlights, the Park has been successful the Centre include the marine sector as well in incubatng and developing a number of as manufacturing. Surrey also maintains the companies operatng at the interface between Surrey Technology for Autonomous Systems advanced engineering and Digital Enabling and Robotcs (STAR) Lab, which builds on the Technologies, some of which have gone on to University’s expertse in ‘small sat’ engineering become genuinely internatonally signifcant to develop autonomous systems and robotcs and which remain based within the region: for space.

BOX 7-2 4-1 SURREY RESEARCH PARK

Early days – and the formaton of Surrey Research Park

In the 1970s, the University of Surrey decided to extend its scope to work closely with industry by developing a new science park, to lower the barriers for entry to new, technology-focused businesses. From the outset, the Research Park aimed to facilitate the commercialisaton of research, moving beyond simple ‘technology transfer’.

Surrey Research Park today

The Park is currently home to around 500 businesses, around 300 of which are broadly ICT-related. To date, over 90% of the Park has been developed. By 2015, the University had invested around £52 million (although the Park had contributed over £96 million in unrestricted independent income for reinvestment by the University), and around 4,000 people were employed on site.

Successes in Digital Enabling Technologies

These include:

• IDBS, established in 1989 by two entrepreneurs with a biochemistry background and is now a leading provider of advanced sofware for research organisatons to capture, manage, share and exploit structured and unstructured data. Headquartered at the Research Park, it now operates globally, with ofces in the US, Europe and Japan • Surrey Satellite Technology (SSTL), established by the University of Surrey in 1985 as a spin-out company to commercialise the University’s success in demonstratng that small and inexpensive satellites could be developed to perform complex missions. Currently, SSTL has around 40% of the world’s small satellite export market. Now employing around 600 people, and stll based at the Research Park, Airbus acquired a 99% stake in SSTL from the University in 2009, enabling it to expand further. • BAE Systems Applied Intelligence, established as Smith Associates in the 1970s and subsequently renamed Detca. Based at Surrey Research Park since 1986 and beneftng in its early days from a loan from the University, Detca became a leader in cyber security and communicatons intelligence and was acquired by BAE Systems for a reported £531 million in 2008. Re-branded as BAE System Applied Intelligence, the company remains based at the Research Park, where it employs around 1,000 staf

73 Non-university research insttutons 7.18 This area of the South has strong functonal and operatonal links with other parts of the 7.16 Within the defence sector, the South has UK, for example with defence, aerospace several Government scientfc research and security related actvites in the West of establishments, which form part of an England and the North West. This creates important defence-related cluster in the a cohesive interdependent workforce and region. These include the Atomic Weapons supply chain located within a relatvely small Establishment (AWE) at Aldermaston, near geographic area within the South. Reading, and the Defence Science and Technology Laboratory (Dstl) at Alverstoke 7.19 The scale of actvity around Farnborough, near Gosport and Portsdown West near including the Internatonal Airshow which Fareham. As well as its core mission to in 2014 atracted orders and commitment deliver technical support and research to over $204bn159, has led to the development the Ministry of Defence, Dstl has a mandate of Farnborough Aerospace Consortum, the to develop commercial applicatons from its longest established aerospace and defence intellectual property, and in 2005, established trade body in the UK. FAC primarily exists to a company, Ploughshare Innovatons, to facilitate supply chain links between the large manage investments in spin-outs. Ploughshare global ‘primes’ located in the region and SMEs, is based in Stockbridge, and a number of through a series of programmes focused on successful spin-outs have been developed – technology transfer and skills and training. and remain – in the South, building on their Currently, FAC supports around 300 businesses historic links with Dstl and exploitng Digital located within the South160. Enabling Technologies. Examples include Esroe (based at Fareham), which produces sofware 7.20 Focused at Bournemouth Aviaton Park, for military use, and Subsea Asset Locaton there is also a concentraton of aerospace Technologies (SALT), based at Portland. Dstl and advanced engineering frms in Dorset, has a signifcant SME engagement and R&D including Cobham, Meggit and Magellan outreach programme, which atracts a number Aerospace who play an important role a of businesses to the South where they can be natonal and internatonal supply chain. close to customer and supply chain/ partnering engagement opportunites. Space + 5G technologies - “A golden opportunity for Innovaton South & the UK to lead the world” Commercial – rooted in Innovaton South; resonatng throughout the UK 7.21 The Innovaton South region has a partcularly strong space industry. In the report “The Size 7.17 The South has a concentraton of and Health of the UK Space Industry 2016”, internatonally-signifcant engineering the South East region was top for the number businesses, with a large number of aerospace of organisatons engaged in space-related & defence companies around Farnborough, actvites, and second only to London for space such as QinetQ, headquartered in Cody industry income for 2014/15. The South East161 Technology Park, Farnborough (and with other also had the second highest number of people sites in the South such as Alverstoke, Chertsey employed in the space industry. and Fort Halstead, near Sevenoaks); Thales UK, in Reading; BAE Systems, also headquartered 7.22 This strength in the space sector, combined in Farnborough has operatons in Surrey, with the Innovaton South assets in Hampshire, Dorset and Kent; Airbus UK, whose digital enabling technologies in the defence and space operatons are based at telecommunicatons sector, enables a golden Farnborough and Portsmouth; and Lockheed opportunity for the region to exploit the Martn UK. emerging 5G infrastructure ecosystem.

1592015 study by Repucom on behalf of Farnborough Internatonal Ltd. See link to media release 160Farnborough Aerospace Consortum 161 South East fgures are the closest proxy for Innovaton South. Ofcial South East data do not refect Dorset. They do include the rest of Innovaton South, 74 plus Oxfordshire, Bucks and Milton Keynes. Any additonal numbers for Dorset will be included in fgures for the whole of the South West Innovaton South has the opportunity to towards 5G, partcularly in areas where it will become the global lead for 5G infrastructure prove very challenging to do so terrestrially development by developing this integrated (e.g. dense city centres and rural areas). The terrestrial/space ecosystem in the region. 5GIC facility is already providing leadership for terrestrial 5G, and Airbus Defence & Space has 7.23 For example, space technology is an ideal an established working relatonship with the candidate for resolving capacity and coverage University of Surrey. issues faced by the cellular network evoluton

BOX 7-3 4-1 QUANTUM SATELLITE162 CASE STUDY

Quantum is an innovatve advanced telecommunicatons spacecraf designed to provide a fexible in- orbit reconfgurable payload for GEO satellite applicatons. Quantum is being implemented in a public– private partnership between ESA, Airbus Defence & Space and Eutelsat.

• Quantum is a pioneering mission that will infuence how telecom satellites are procured and built in Europe by ofering a new, generic payload design. It is intended to be more fexible, faster and cheaper • The frst Quantum satellite will be delivered in 2018 and operated by Eutelsat to serve government, mobility and data markets. Airbus DS will be the prime contractor, using a new platorm from Surrey Satellite Technology Limited (SSTL). Both developments are supported by the UK Space Agency. • This approach will have a far-reaching efect on European compettveness in the commercial fexible communicaton payloads market across a large range of payload sizes.

Communicatons satellite

7.24 Beyond aerospace and defence, the South also design of advanced automotve systems. has commercial strengths in the development of technologies for the automotve sector. The 7.25 There are automotve companies in the South region hosts Rolls-Royce Cars, at Goodwood, that are seizing opportunites for disruptve McLaren at Woking, Gordon Murray Design innovaton by deploying their expertse in at Shalford, Alexander Dennis (Bus Chassis) digital enabling technologies and diversifying at Guildford and Delphi (diesel systems) at into other lucratve sectors. A good example is Gillingham, all of whom are involved in the McLaren:

162Note that the satellite was named Quantum by Eutelsat. To be clear though: whilst this satellite features much advanced technology, it does not use 75 quantum technology BOX 7-4 4-1 APPLYING TECHNOLOGIES ACROSS SECTORS: MCLAREN163

McLaren Technology Group is a high-technology company based in Woking. Best known for the development of Formula One racing cars and (more recently) a range of luxury high-performance sports cars, McLaren Applied Technologies uses the Group’s R&D and technical expertse to improve innovaton in a range of other industries.

McLaren’s strengths draw on its partcular expertse in data collecton and analysis, high performance design and the development and manufacture of advanced electronic control systems. In McLaren’s historic ‘core business’ of motorsport, this has involved developing a standard set of Formula One electronics and linking complex electronic and mechanical components with embedded sofware to support new racing car and bike design.

Beyond the automotve sector, McLaren is using its digital technology strengths to address challenges in health, wellbeing and energy. McLaren’s experience in installing advanced sensors in racing cars, and its success in collectng and analysing data has led it to work with GlaxoSmithKline to develop wearable technologies. Recently, these have been used to monitor patents recovering from strokes and managing neurological disorders and in improving sports safety standards.

In the energy sector, McLaren is also working with a large operator in the Ekofsk oil and gas feld in the North Sea, developing a computer model that takes real-tme data direct from the drilling head to provide constant insights to support decision-making. Building on this, McLaren is working on a new project to build a drilling simulator. Simulaton technology is also the focus of a partnership with the Natonal Air Trafc Control Service (based at Swanwick), developing a system that enables air trafc controllers to optmise the fow of air and ground trafc. Using high performance design expertse, the frm is also collaboratng with IO, one of the world’s largest data centre technology companies, to improve data centre design.

These examples take McLaren into felds very diferent from those envisaged by Bruce McLaren when he developed his frst Formula 1 car in 1966. But they illustrate how the combinaton of engineering expertse and digital technologies are blurring conventonal sector boundaries - enabling some of the South’s most innovatve businesses to address a wide range of challenges.

7.26 A revoluton in mobility is taking place through public trust and acceptance of automated the introducton of connected and automated vehicle technologies through real world vehicle technologies with the promise of demonstratons and trials. This is one part safe, cleaner and more efcient movement of of a current portolio of project work in this people and goods. Research organisatons in area with value exceeding £50m. BAE Systems the Innovaton South region are at the cutng also have a long history in automated vehicle edge of this revoluton. TRL (the UK’s Transport development and are contributng to the £8m Research Laboratory) based at Wokingham Venturer project to demonstrate automated is highly prominent in developing how vehicles in Bristol. Thatcham Research, automated vehicles will deliver an improved located near Newbury, the motor insurance transport system. Having worked in automated automotve research centre, is heavily engaged vehicles for more than 50 years, TRL is leading with the car manufacturers (partcularly Volvo) the £8m GATEway (Greenwich Automated in developing the standards for automated Transport Environment) project, investgatng vehicle safety, operaton and repair. Another

163Drawn from www.mclaren.com/appliedtechnologies 76 key regional asset is Ricardo plc, based at Skills and talent Shoreham, with strengths in the development of systems for autonomous vehicles, through 7.30 Despite the natonally-signifcant concentraton Ricardo Agent Drive, simulaton sofware to of advanced engineering actvity around test complex driving situatons for autonomous Farnborough and the M3 corridor, industry road vehicles164. members, who contributed anecdotal evidence in Audit discussions, considered that 7.27 Key university contributors to autonomous engineering is ‘less visible’ in the South than vehicle research include the University of in other regions such as the North West165. Southampton with work on driver behaviour This may refect the fact that traditonally, and the University of Sussex on ethical the South (with exceptons, such as North issues related to artfcial intelligence and Kent) has not been seen primarily as a automaton. The University of Surrey’s 5G manufacturing locaton, and has a generally centre is playing a critcal role in determining buoyant service sector. how connected and autonomous vehicles communicate with one another and with 7.31 This appears to have impacts on the ability to infrastructure as part of an integrated recruit new entrants to the workforce, given transport system using high speed, large the general strength of the labour market in bandwidth and low latency networks. Cyber the South; and the competton for people security will be essental in such networks with strengths in Digital Enabling Technologies and the region is well placed to address this for advanced engineering up against the issue with resources such as Royal Holloway’s “glamour” of rapidly growing media- Informaton Security Group (ISG) and industrial related sectors, such as gaming. Responding concerns such as Thales, based at Crawley. to perceived STEM-related skills gaps, considerable eforts are being made to expand 7.28 The marine and maritme and med tech the higher educaton teaching ofer in support sectors have been highlighted earlier but it is of the economic opportunites associated with notable that the Universites of Southampton, advanced engineering. Notably, the University Solent and Portsmouth are both recognised for of Chichester is developing an Engineering their work in autonomous marine systems. and Technology Park (due to open in 2018), including a School of Engineering and Applied 7.29 The physical locaton of test facilites for Design. Canterbury Christ Church University connected and autonomous vehicles defned has also recently secured funding for a similar by the UK government has a degree of overlap facility, based on extensive involvement from with the Innovaton South region, including engineering employers in East and North Kent. the A2-M2 corridor and the ofces of TRL and the University of Surrey. Furthermore, 7.32 Royal Holloway University of London has it is clear from the expertse and capabilites just launched an Engineering School with a highlighted above that organisatons outside of new Department of Electronic Engineering the defned region yet within Innovaton South at its Egham campus where it is stressing can provide signifcant technical input to the the creatve element of engineering in test actvites undertaken there – for example, order to atract more women into the feld. modelling and simulaton input from University The University of Winchester is one of the of Southampton or cyber security input from pioneering insttutons in the UK for the design Thales at Crawley. and development Degree Apprentceships, and in partnership with employers, CGI, Fujitsu and SMEs has established a portolio of degree apprentceships in Digital and Technology Solutons. The Isle of Wight College has opened

164Ricardo plc (2016), White Paper: Key enablers for the fully autonomous vehicle, www.ricardo.com/connected 77 165SIA Stakeholder Workshop 3 a specialist educaton Centre of Excellence for manufacturing, and this is underpinned by Composites, Advanced Manufacturing and evidenced world-class strengths in engineering Marine (CECAMM). research, which are closely connected with, and regularly inseparable from, the region’s CONCLUSIONS strengths in Digital Enabling Technologies. 7.35 Given the South’s specialism in the high-value, 7.33 The South’s advanced engineering capabilites innovaton-intensive end of engineering, are at the centre of the UK’s defence and sustaining its positon depends on maintaining aerospace sector, an area in which the UK has its ‘leading edge’ in a highly compettve a strong comparatve advantage; serves as the internatonal market, and being able to recruit base for several major engineering corporates high quality engineers. In the view of the and contains a substantal stock of smaller Innovaton South consortum the development engineering frms with high demand for Digital of strategies for rising to these challenges Enabling Technologies. would be a highly valuable outcome of this Audit. 7.34 While the South does not, generally, contain major producton facilites, it is a signifcant locaton for the innovaton in design and

How does the evidence in Chapter 7 help us capture the full economic potental of Digital Enabling Technologies?

• The cross-cutng deployment of digital enabling technologies has great potental for innovaton across sectors. The region should cultvate an environment which maximises these opportunites • Advanced Engineering is an important sector region-wide and is increasingly dependent on digital technologies to maintain global compettveness. Businesses need the engineering and digital skills to match • In the future, collaboraton is likely to be increasingly important: Digital Enabling Technologies will be both a catalyst and a requirement and the sector (which has been quite disparate) will need to respond • In encouraging the growth of smaller businesses, appropriate links to the region’s network of innovaton centres and incubators will be important • With an existng R&D market – given links to defence – the advanced engineering sector is one in which Quantum technologies will start to be adopted and it will be important that the region is ready to respond, as these technologies mature one afer another over the next couple of decades.

78 8. CONCLUSIONS, KEY FINDINGS AND GAP ANALYSIS

INTRODUCTION 8.5 The intrinsically collaboratve nature of the 8.1 This Audit confrms Innovaton South is a 5G Innovaton Centre and the track record region with outstanding strengths in the of SETsquared, as evidenced in this report, Science and Innovaton of Digital Enabling are just two of many shining examples. The Technologies. It demonstrates a high Audit process has galvanized a strong regional performing “commercialisaton chain” and ambiton to maximise and spread best practce shows the South is intrinsically equipped to in collaboraton, commercialisaton and growth compete in internatonal markets. support.

8.2 The examinaton of the commercial applicaton 8.6 The opportunites to build on existng networks of Digital Enabling Technologies, in four of and forge new ones are clear. The innovatve the South’s high tech, sectors: (Advanced creatve digital community in Brighton, and Engineering, Bioscience, Connected Digital the cohesiveness of the high tech marine and Marine & Maritme), shows current and maritme sector on the South Coast are performance and potental opportunites are exemplars. There is a substantal “innovaton, vast. productvity and growth prize” to be won by forging new networks and greater connectvity 8.3 This Science and Innovaton Audit in biosciences in the South, specifcally focused demonstrates how these strengths and its on taking full advantage of the region’s digital high-performance positon Innovaton South as technologies. a UK-wide natonal asset. The evidence builds a robust and tmely case for ensuring the 8.7 The South specialises in high-value, digitally strengths of Innovaton South reach every part enabled, innovaton-intensive actvity. of the South; impact across the UK and are This regional distncton is the route to maximised and sustained. globally compettve growth in each of our themes: advanced engineering and design, OPPORTUNITIES IN INNOVATION SOUTH’S FOUR bioscience, connected digital and marine & maritme. A specialist economy provides great KEY SECTORS opportunites to those with the specialist skills to match - the supply of that talent is key. 8.4 Following the trail of evidence in this Audit, there are clear signposts mapping ways 8.8 Further analysis of the key fndings and to maximise the region’s strengths in the opportunites for Innovaton South are set out applicaton of digital enabling technologies in below. the four chosen sectors. Innovaton South has a proven “culture of commercialisaton” of its science and technology; and outstanding capabilites in the support of business growth to match.

79 KEY FINDINGS & OPPORTUNITIES

• The evidence gathered through this Science and Innovaton Audit of Innovaton South leads to three overarching conclusions: 1. Although there are local variatons, the economy is intrinsically internatonal, underpinned by valuable connectvity and a highly-qualifed workforce 2. The relentless drive for higher value – which is imperatve within the South – means that Digital Enabling Technologies are crucial for future compettveness 3. The South has demonstrable excellence in producing and developing Digital Enabling Technologies, and it has vast potental to apply and commercialise them • To unlock and accelerate this process, fve opportunity areas are identfed, and all fve should be advanced. These are: 1. Knowledge-to-Market Accelerator – to augment the commercialisaton process region- wide 2. Linking Innovaton Hot Spots – to ensure the infrastructure to support the process of innovaton is consistently excellent region-wide 3. Developing the 5G Innovaton Centre – to build the capacity and reach of the 5GIC even further, unlocking a new generaton of high growth digital businesses in the South and other UK regions, ft for a global compettve market 4. Quantum supply chain initatve – focused on the research market in antcipaton of the full commercial applicaton of quantum technologies 5. Advanced skills in Digital Enabling Technologies – led by the private sector to ensure digital businesses operatng across all sectors in the South are able to recruit the workers they need

OVERARCHING CONCLUSIONS 8.11 This underlying patern of global connectvity 8.9 From the preceding analysis, three overarching equips the region’s digitally-enabled economy conclusions stand out: to compete in global markets, and many businesses in the Innovaton South region The South’s economy is intrinsically internatonal, are performing strongly internatonally. The underpinned by valuable connectvity and a highly- challenge is to maintain and increase this qualifed workforce number.

8.10 The internatonal connectvity which 8.12 Brexit carries potental opportunites and characterises the economy of the South risks, not least in the supply of high skilled has been demonstrated in this Audit labour. Knowledge-based businesses which are through high level data relatng to exports, nurtured and grown within the South must be foreign direct investment and paterns of recognised as a part of a global economy and company ownership166. Looking across the they need access to a global labour market: on themes and sectors under examinaton, that basis, they will fail or thrive. the internatonal nature of individual frms’ workforces is evidenced; as is the extent to 8.13 Costs are a challenge – partcularly during the which technology-based businesses in the early stages of the commercialisaton process. South – even very small ones – are developing Across much of the South: labour, housing and commercial links with customers around the employment sites/premises are relatvely world.

166As noted in Chapter 2, there are local variatons in relaton to this overall picture. On most indicators, Thames Valley Berkshire stands out in terms of internatonal actvity. Performance is more variable elsewhere within Innovaton South 80 expensive. Along with major issues base and competence in relaton to Digital around infrastructure and congeston, they Enabling Technologies. This can be seen pose challenges. Advancing the process throughout the “commercialisaton chain” – of commercialisaton - always difcult from the science in the region’s universites and uncertain - in a relatvely high cost and research insttutons, through the early environment adds pressure. The positve applicaton of that science in research- upshot is these high costs - to some extent, intensive businesses, to its wider deployment inevitable consequences of a strong economy downstream. The process of translaton is - provide powerful incentves to pursue extra challenging and the South benefts from a growth and innovaton. generally efectve supportng infrastructure. As a global region, it must rise to the challenge The relentless drive for higher value means Digital of benchmarks that are both high and rising Enabling Technologies are critcal for future incessantly. compettveness

8.14 It is because the South is a relatvely high cost OPPORTUNITY AREAS locaton that the imperatve to achieve gains 8.18 The evidence of this Audit and its conclusions in productvity is relentless. Resources must highlight areas of opportunity to ensure be used well. This in itself is a driver for the the region’s Digital Enabling Technology adopton of Digital Enabling Technologies capabilites are nurtured and harnessed such region-wide. that they appropriately shape the economy of the South over the decades ahead. Highlightng 8.15 In marine and maritme, for example, digital areas of opportunity – and returning to the solutons need to be found for the “dirty, inital hypothesis set out in paragraph 1.4 – the dangerous and dull” elements of the sector, queston that follows is what more could and and the South is leading the way. In bioscience should be done. and healthcare, the possibilites surrounding digital health are partcularly important for a 8.19 Five responses stand out. All fve are grounded sector that is struggling with recruitment and, in the evidence of specialist strengths, assets as elsewhere, has an ageing populaton. and opportunites in the fve areas identfed for examinaton in the Innovaton South 8.16 Although there are societal, regulatory and Audit. While all address market failures and other barriers linked to the fuller adopton of are likely therefore to require some level of Digital Enabling Technologies (see Table 3 1), public subsidy, partners across the South the possibilites for the South are vast. The – in the universites, research insttutons, efectveness with which these challenges local enterprises and local authorites – are are navigated will fundamentally shape the prepared to commit their own resources region’s well-being for decades to come, as to driving them forward. The expectaton much in relaton to the overall quality of life, also is that the private sector will play a very as to more immediate processes of wealth substantal role (in cash or in kind) in advancing creaton. them. The South has demonstrable excellence in 8.20 The fve opportunity areas are summarised (in producing and developing Digital Enabling no partcular order) in the paragraphs below. Technologies, and it has vast potental to apply and In each case, a more detailed high level outline commercialise them business case is presented in Annex A. 8.17 The main fnding from this Audit is that Innovaton South has an outstanding asset

81 KNOWLEDGE-TO MARKET ACCELERATOR

Outstanding assets in Digital Enabling Technologies. The full, disruptve, A business university- Cross-cutng Innovatons applicaton of Digital backed body to identfy, and & working collaboratons Technologies requires a co-fnance, joint projects can be enhanced. Regional cross-sectonal and pan- to increase the commercial co-ordinaton mechanisms applicaton of Digital need to refect the South’s regional response. EVIDENCE

PROBLEM/ Enabling Technologies. scale and diverse economy. SOLUTION OPPORTUNITY

8.21 The purpose of the proposed Knowledge- business community (including both SMEs and to-Market Accelerator is, fundamentally, to corporates). This will lead to more systemic harness the region’s outstanding research innovaton, probably of a disruptve form. It assets in relaton to Digital Enabling will be seeded through small-scale innovaton Technologies with applicatons across the projects within the region, overseen by a body four key sectors, highlighted in this Audit, and which will morph out of the Innovaton South beyond, to efect greater levels of collaboraton Science and Innovaton Audit stakeholder – both among research insttutons across the partnership. South, and between researchers and the wider

LINKING INNOVATION HOTSPOTS

Across the South, the There is an opportunity to support available for ensure that best practce A project linking innovaton innovatve SMEs is is shared by sector and/ centres, incubators and EZs impressive but tends to or region-wide and that all to ensure innovatve SMEs parts of the South nurture are supported and grown work in relatve isolaton innovatve SMEs EVIDENCE PROBLEM/ SOLUTION OPPORTUNITY

82 8.22 The South can claim some of the most efectve and beyond. The inference is opportunites are systems of support for small, innovatve being lost and innovatve small businesses are businesses anywhere in the UK; in this context, not being supported on a consistent basis. The the work of SETsquared and the model it has aim of this interventon is to remedy this by developed has been widely applauded167. exploitng the underpinning science asset base However, it is also true to say that region- more fully, and to create stronger innovaton wide, paterns of provision are very variable. clusters across the theme areas of this Audit. SETsquared itself works through the University There is a partcular need to link the innovaton of Southampton and the University of Surrey hot spots more efectvely in Bioscience, – but there are 14 universites in the region in although the ambitons for this interventon total. Elsewhere, approaches to the support would include all the sectors studied in this of early stage businesses tend to be more ad Audit and, longer term, beyond. hoc, both within the ambit of the universites

SME 5G DEVELOPING THE 5G INNOVATION CENTRE

5G is an emerging The 5GIC is a world class technology which should be asset and brand, but The further development of rolled out within 3-5 years it could potentally be ‘spokes’ linked to the 5GIC The 5GIC is a unique asset, ‘worked harder’ across the hub to increase the regional and commercial impacts are footprint following South SOLUTION EVIDENCE PROBLEM/ OPPORTUNITY

8.23 As described in Chapter 3, through the 5G is to develop this network of “spokes” more Innovaton Centre, the South has a major fully across (and potentally beyond) the resource in developing the full potental of geography of Innovaton South. 4G and 5G, and businesses like AccelerComm are leading the way. From its base at the 8.24 Potentally, this venture could connect with University of Surrey, the 5GIC has recently “Linking Innovaton Hotspots” to provide a invested in a demonstrator in Basingstoke, region-wide infrastructure for small businesses providing frms engaged in 5G applicatons seeking to commercialise and use world- access to the latest technology. The intenton leading Digital Enabling Technologies.

167This was considered in Box 2-2. See also the discussion in Chapter 2 83 QUANTUM SUPPLY CHAIN INITIATIVE

Quantum technologies will be transformatonal A supply chain initatve UK Government and global in their impact – but not which will build capacity corporates are investng immediately within the South’s SMEs substantally in quantum The South needs to build to respond to the growing technologies research capacity to be able to research market for EVIDENCE

PROBLEM/ quantum technologies respond fully SOLUTION OPPORTUNITY

8.25 Quantum technologies will be transforma- research demand in preparaton for the longer tonal, and the South has great potental to term expansion of commercial opportunites? take advantage of this. However, while much of the underpinning science is understood, 8.27 The Government recognises the need to bridge end-applicatons are generally some way from the gap between the potental of quantum full commercial applicaton and the need for technologies and their commercialisaton – for research funding will contnue for some tme. example, the Natonal Quantum Technologies It is likely that defence applicatons will be the Programme aims to make the UK “a leading frst to come forward, but the major defence player in the global quantum technologies companies (such as BAE Systems, Thales and supply chain”169. In the South, there is an QinetQ, all of which have a strong presence in opportunity to take a lead in this, complement- the South) are unlikely to invest untl there are ing scientfc research investment. This might strong procurement signals from Government. take the form of a “Quantum Technology Park”, In short, there is likely to be a huge commercial actng as a hub for an inclusive region-wide market in the future, but this is stll develop- network to deliver the following objectves: ing – although the cluster in the South is well placed to respond. • Enable start-up and scale-up SMEs to utlise the outstanding facilites held with the region’s 8.26 The scale of pure investment into the science universites and Government labs to accelerate, is creatng an immediate and signifcant for example, prototype device manufacturing, opportunity to sell into the research market. digital design, and testng The South has existng commercial strengths • Provide targeted fnancial and advisory assis- in this area168, and this market is likely to tance to quantum technology SMEs, where they grow. This will be important for the South’s are seeking to enter new markets in the UK or – and the UK’s – ability to build a presence in overseas quantum devices when their wider commercial • Facilitate stronger links between SMEs and applicaton takes of. New applicatons, primes, partcularly in the advanced engineering especially in advanced engineering and marine and marine and maritme (especially defence-re- and maritme, will require a supply chain, lated) sectors. and an existng stock of expertse will help to NB There is synergy between this and the “Inno- atract future investment. So how can we build vaton Hotspots” initatve. a quantum supply chain based on existng

168For example, Covesion (based at Romsey), which supplies non-linear optcal crystals; Fibercore (based at Southampton), which is a major producer of optcal fbres; and MSquared (based at Guildford), which develops and manufactures lasers and photonic instruments 169EPSRC, UK Natonal Quantum Technologies Programme 84 FUTURE SKILLS IN DIGITAL TECHNOLOGIES

The development and The South has a strong skills Projects to develop applicaton of Digital base, but labour markets and promote career Enabling Technologies are tght and specialist skills opportunites linked requires high level skills are scarce with Digital Enabling – frms in the South reply Partcularly with Brexit, Technologies, and to on an internatonal labour more specialist skills must aggregate evidence on EVIDENCE PROBLEM/ market for specialist skills be grown locally SOLUTION demand OPPORTUNITY

8.28 The South benefts from a well-qualifed 8.29 The supply of skills is a shared responsibility working age populaton and high employment between the private (corporates and SMEs) rates compared with the rest of the UK. and public sectors at the natonal, regional However, a strong supply of high-level skills and local levels. The full advantages of digital in digital enabling technologies is critcal to enabling technology will not be realised unless future compettveness in the South’s high- there is a workforce outside the immediate value economy, where substantal growth research base to take up the innovatons. will depend on innovaton. Signifcant There are two broad areas of acton where skills shortages and gaps threaten the full we believe regional leadership can make a development and exploitaton of digital diference in the South. enabling technologies. In the SIA workshop discussions, a theme emerged that fnding 8.30 First, inspiring the next generaton of advanced digital skills is challenging, technologists – and ensuring that they are partcularly in less “visible” sectors. Gaming is aware of the scale and range of opportunites very successful in the South and it generates in digital enabling technologies – is vital. much interest from young people, but Major events in the South, such as the embedded sofware for example, perhaps Farnborough Airshow, Land Rover BAR (Ben within the maritme sector or within an Ainslie Racing) and the Goodwood Festval of advanced manufacturing frm, is a less Speed, are important opportunites to inspire immediately-atractve propositon, and young people. There is an ambiton to link these sectors – which are important in the the region’s major corporates and smaller South – fnd recruitment especially difcult. businesses in a coordinated programme to Potentally, the labour market could tghten promote and champion the South’s digital if there is greater difculty in recruitng from future and the excitng employment and overseas, further strengthening the case for business opportunites it will bring. commitment to home-grown talent.

85 8.31 Second, in a tght labour market and with MOVING FORWARD strong competton for talent, businesses and providers share a mutual interest in stmulatng 8.32 The Innovaton South Science and Innovaton the supply of advanced level digital skills. This Audit has generated substantal local is critcal to the future compettveness of the enthusiasm and commitment. Through the key sectors identfed in this Audit. The process workshops that were at the centre of our of developing the Science and Innovaton evidence gathering process – and through fve Audit has already opened up new dialogue meetngs of a Strategic Steering Group and between businesses and universites. Looking wider Advisory Group – connectons between to the future, we would like to build on this businesses (both SMEs and corporates), and develop a more sophistcated approach universites, research insttutons, local to skills demand aggregaton to help address authorites and local enterprise partnerships skills gaps. One way we propose to address this from across the Consortum have been is through a brokerage programme backed by developed and strengthened. Substantal universites and industry. momentum has been generated and the Consortum is commited to driving forward the agenda set out in this report. It will now devote its own tme and resources to furthering this venture. In additon, it is keen to work closely with Government in seeking to unlock fully the opportunites and potental linked to the region’s Digital Enabling Technologies both for the beneft of Innovaton South and the whole of the UK economy.

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