Devolution, R&D and Levelling Up


By Professor Charlie Jeffery, Vice Chancellor and President of the University of York

Another report on under-investment in the north was published last week, this time from IPPR North, just in time for the 2023 Convention of the North, held in Manchester on 25 January.

The IPPR report had a nifty soundbite: if the North were a country, it would, with Greece, be propping up the OECD league table on economic investment.

It followed on from others focused more specifically on R&D investment published by the Northern Powerhouse Partnership, Nesta, and Transport for the North. The message in all these reports is the same: economic imbalance between north and south will continue as long as there is an investment imbalance.

The golden octagon

This was a conversation the N8 Research Partnership picked up at the Convention of the North, working with the Northern Powerhouse Partnership. The N8 consists of eight universities across the north focused on mobilising their top quality research for economic innovation. It is the north’s “Golden Octagon”, just as vital for the UK economy as the “Golden Triangle” in the south.

So why are universities like those in N8 so important for the economy? We discover new knowledge through our research, and steer that knowledge partway, and sometimes all the way, into economic applications – products and services based on our ideas and technologies. We educate students in that cutting edge knowledge so they are equipped to use it, and drive on its application when they enter the labour market. And we convene, connect and attract: bringing together people and organisations; anchoring relationships between public and private sectors in the places we are based; and clustering economic activity around the innovations that emerge from research and the talents of our graduates.

When that works well you see, around our universities, a strong start-up culture connecting to and enriching the supply chains of existing businesses. Venture funding to support that start-up culture and scale up new business. Judicious public funding, national or local, to help attract, develop and retain businesses and talent. Inward investment as others from within and beyond the UK are attracted to a research and talent-led ecosystem.

In other words, you wouldn’t see these cluster effects without the research and the graduate talents that come from our universities.

Two way clusters

The question is: can this organic process be steered, nurtured, or accelerated more purposefully? I think it can – and increasingly, I detect, so does the government in Westminster.

For example, the York and North Yorkshire Devolution Deal has a unique element: a commitment to bring national and local partners together to further develop the bioeconomy cluster around the University of York – the BioYorkshire programme – by exploring how to capture public and private investment and to put it to work in a shared public/private investment vehicle.

One commentator called this a prototype for the devolution of R&D policy. Shouldn’t this be a core part of the devolved portfolio of mayors and combined authorities in the north, part of their levers for attracting investment and driving growth?

Additionally, the possibility for greater devolution echoes some of the thinking of the Science Minister, George Freeman. He has a list of 30 innovation-led clusters, fed by universities across the UK, with several in the north, including BioYorkshire, that he would like to see grow. He has also set out a vision of ‘cluster development corporations’.

These would be different from conventional development corporations, which focus on regenerating a former industrial site for new purposes. Clusters are not sites, but systems, distributed across different locations.

What Freeman is signalling is the ambition to bring together foundational public funding, national and local, to help anchor long term private sector commitment – such as the patient capital in UK pension funds which Solvency II reform offers an opportunity to leverage – so that it then draws in complementary investment: venture funding to incubate businesses; developer funding to give them somewhere to go when they scale up; and various locational sweeteners to get other businesses, within and beyond the UK, to relocate to the cluster.

This is a different way of thinking about investment – not just into a university, or a promising start-up, or an inward investment opportunity – but into the development of the cluster as a whole.

It is about thinking strategically, moving away from fragmented to more concerted decision-making. It is about moving away from that begging bowl and scattergun culture of government funding competitions recently criticised by Andy Street – something we heard about repeatedly at the Convention for the North.

So here’s a challenge for us in the north. Let’s make the argument for a devolved approach to R&D. Let’s build those cluster development corporations, let’s leverage the private sector into co-investment, let’s build a strategic approach to R&D investment – and begin to close that north-south investment gap.

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