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A Science and Innovation Audit Report for the Midlands Engine, sponsored by the Department for Business, Energy & Industrial Strategy Volume 1: Main Report 01 November 2016 A Science and Innovation Audit Report for the Midlands Engine, sponsored by the Department for Business, Energy & Industrial Strategy Volume 1: Main Report Contents Midlands Engine SIA – the headlines ....................................................................................1 1. Introduction to the Midlands Engine SIA...........................................................................4 2. SIA ‘hypotheses’ and ‘framework’ ...................................................................................10 3. Regional science and innovation assets and excellence..............................................19 4. Innovation strengths and our growth priorities..............................................................30 5. Market and technology drivers of change.......................................................................53 6. Innovation networks and behaviours ..............................................................................59 7. Next Steps – unlocking our productivity potential.........................................................67 A Science and Innovation Audit Report for the Midlands Engine, sponsored by the Department for Business, Energy & Industrial Strategy Volume 1: Main Report Midlands Engine SIA – the headlines 1. In Autumn 2015 the UK Government announced regional Science and Innovation Audits (SIAs) to catalyse a new approach to regional economic development. SIAs enable local consortia to focus on analysing regional strengths and identify mechanisms to realise their potential. 2. In the Midlands Engine, a consortium was formed to focus on our strengths in Next Generation Transport, Medical Technologies and Pharmaceuticals, Future Food Processing, and Energy and Low Carbon. This report presents the results which includes broad-ranging analysis of the Midlands Engine’s capabilities, the challenges, and the substantial opportunities for future economic growth. Context 3. The Midlands Engine is the heartbeat of the UK’s economy. Built on an internationally-competitive and highly connected manufacturing base, and enhanced by a range of complementary sectoral strengths, the Midlands Engine is positioned perfectly to drive improved productivity performance for the UK in the rapidly evolving and increasingly digitised 21st century global economy. 4. The Midlands Engine is home to almost 12 million people, 18% of the UK’s total. The diversity of our population is also one of our key strengths. We are a £230 billion economy, generating approximately 15% of the UK’s GVA. 5. The region’s sectorally diversified economy includes a strong manufacturing base, with the Midlands Engine accounting for around 21% of the UK’s total manufacturing GVA in 2014. The region supports over five million employees, nearly one in five across Great Britain (GB) as a whole. Approximately one-fifth of all business R&D in the UK is delivered within the Midlands Engine footprint.1 6. However, despite the scale and diversity of our regional economy, our productivity performance lags behind national levels. The latest data (for 2014) indicate GVA per employee in the Midlands Engine at £44.6k, compared to £49.85k across the UK as a whole. Productivity deficits are evident across our economy, in both manufacturing and service-based sectors.2 7. Driving-up productivity has framed this Science and Innovation Audit and is the key long-term priority for the Midlands Engine. This will mean capitalising on the existing strengths in our business base, and leveraging fully the critical mass of world-class science and innovation assets across the region. 1 A Science and Innovation Audit Report for the Midlands Engine, sponsored by the Department for Business, Energy & Industrial Strategy Volume 1: Main Report Our SIA Framework for long-term productivity growth Three Enabling Competencies Advanced Manufacturing and Engineering: covering the region’s pervasive leading-edge technical knowledge, and practical know-how, in designing, validating, producing, and servicing new products and industrial processes, across a diverse and increasingly integrated range of sectors and markets. Digital Technologies and Data: covering the strengths in the region’s academic, research and industrial base in exploiting and understanding data and information, including satellite-enabled data, and the use of digital technologies in product, process and service development and research commercialisation. Systems Integration: covering the strengths in the region’s academic, research and industrial base on how increasingly complex systems – from energy and transport systems, through to manufacturing and service delivery – can be better designed, managed and operated. Four Market Driven Priorities Next Generation Transport: covering aerospace/space, automotive, motorsport and rail sectors, with a focus on high performance system simulation/modelling; advanced digital design/physical validation; advanced materials/processes; and digital manufacturing, supply chain and service management Medical Technologies and Pharmaceuticals: covering medical devices, diagnostics (including in vitro diagnostics and diagnostic imaging), software as a medical device, and pharmaceuticals Future Food Processing: covering the areas of ‘food processing efficiency’, ‘delivering a zero waste food chain’; and ‘food product innovation’ in the food and drink sector Energy and Low Carbon: covering geo-energy, thermal energy systems, nuclear, energy storage and smart integrated energy systems. 2 A Science and Innovation Audit Report for the Midlands Engine, sponsored by the Department for Business, Energy & Industrial Strategy Volume 1: Main Report Moving Forwards 8. This audit has created the opportunity for the key players around the Midlands Engine area to come together and identify clear and current opportunities for growth. Unsurprisingly, in a region of the reach and vibrancy of the Midlands, significant efforts are already underway that provide a close match to some elements of the market opportunities we have identified. In particular: Midlands Innovation’s thinking on ‘Transport Innovation for a Low Carbon Economy’ that takes forward aspects of the Next Generation Transport theme The proposed National Space Park, which would bring a step change to space research and space-enabled data service provision Proposals for Life Science Opportunity Zone status for the former AstraZeneca site at Charnwood Emerging proposals for building on the significant investments made in the region through the Energy Research Accelerator (ERA). 9. These projects are welcome early steps in taking forward key elements of this ambitious audit. However, in order unleash our full productivity potential and deliver the economic transformation that this SIA has shown is possible, more will need to be done. 3 A Science and Innovation Audit Report for the Midlands Engine, sponsored by the Department for Business, Energy & Industrial Strategy Volume 1: Main Report 1. Introduction to the Midlands Engine SIA 1.1 Our strategic spatial location, and the quality, scale, and export-oriented nature of our economy, make the Midlands Engine the heartbeat of the UK’s economy. Built on an internationally- competitive and highly connected manufacturing base, and enhanced by a range of complementary sectoral strengths, the Midlands Engine is positioned perfectly to drive improved productivity performance for the UK in the rapidly evolving and increasingly digitised 21st century global economy. We are also well equipped to make a substantial and lasting contribution to the Government’s developing industrial strategy. Leveraging fully our science and innovation excellence is a prerequisite for success in delivering on these key intents. The place 1.2 A diverse and substantial economy, the Midlands Engine covers 11 Local Enterprise Partnership (LEP) areas. The region contains important urban centres, including internationally significant core cities like Birmingham and Nottingham, and growing regional hubs like Stoke-on-Trent, Derby, Milton Keynes, Lincoln, Coventry, Leicester and Wolverhampton. The region also has a high quality natural environment, including the Peak District National Park, and market and county towns like Shrewsbury, Stafford, and Northampton, serving as economic, leisure and service centres. Figure 1-1: The Midlands Engine 1.3 Our strategic road and rail networks such as the M6, the M1, the West Coast Mainline, the East Coast Mainline and the Midlands Mainline are of national importance. They are used to transport people and goods across the Midlands as well as across the country; HS2, with Phase One providing a high-speed link between Birmingham and central London, and proposals for an additional station between Derby and Nottingham, will strengthen further our offer at the centre of the UK’s strategic transport network. 4 A Science and Innovation Audit Report for the Midlands Engine, sponsored by the Department for Business, Energy & Industrial Strategy Volume 1: Main Report 1.4 The Midlands Engine also links the UK to the rest of the world: Birmingham Airport handles more than 10 million passengers annually; East Midlands Airport is the second largest freight airport in the country; Luton airport is the fastest growing in the UK; and the airport at Cranfield University is favoured by senior business
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