Earlier this week, there was some excellent news for the creative industries sector in South East Wales when the UK Government announced that media.cymru project was to be granted £22.2 million under its Strength in Places Fund.
This will bring together key stakeholders in the industry, including UK broadcasters, universities, small local businesses and freelancers in a £50m initiative to research and develop new products and services for global markets.
The Strength in Places Fund - which has been established to support economic development across the UK – is an excellent policy tool in that it funds the specific competitive strengths of different parts of the UK.
It forms an important part of the UK Government’s new innovation strategy to boost private sector investment in R&D across the whole of the UK and create the right conditions for all businesses to innovate.
It is an ambitious approach that aims to increase annual government investment on R&D to £22 billion, help develop a more proactive approach to public procurement for innovative new products and services, and introduce new visa regulations that can attract the best innovation talent from around the World.
That is all laudable at a national level but if we look more closely at the small print of the range of initiatives that the strategy will support, the co-operative approach engendered by the Strength in Places approach is largely missing.
In fact, there should be alarm bells ringing as to whether Wales and the Welsh economy will benefit from other elements of this strategy that has clearly been developed in the corridors of Whitehall and reflects the economy in that part of the World rather than those in the devolved nations and other regions.
For example, the strategy notes that the British Business Bank’s Life Sciences Investment Programme will invest £200 million through to target the growth-stage funding gap faced by UK life science companies.
Yet I would doubt if, at any stage, there has been consultation with the Welsh Life Sciences Hub on attracting the best opportunities for this funding. In addition, if this was applied proportionately, Wales would get £10 million which is hardly the level of finance that life sciences firms need.
I would also be surprised if there has been any conversation with the Development Bank of Wales for matching this fund to ensure ‘more bang for their bucks’ and actually creating something special for this important technology sector. Certainly with £500m being made available to the bank by the Welsh Government, it could now look to work with UK Government to create more funding for life sciences businesses if politicians in Cardiff Bay are willing to do so.
There is also mention of the new Help to Grow management programme which has the aim of training 30,000 senior managers of UK SMEs to boost their performance and productivity.
Unfortunately, only two business schools in Wales are certified for delivering this training and whilst both have experience in running such programmes, it will be a major challenge for their existing staff to deliver to 1,500 firms across Wales, especially as both business schools are based in Cardiff.
In addition, the Help To Grow Digital programme aims to support 100,000 small businesses to adopt digital technologies that will save them time and money which should mean that 5,000 firms in Wales should benefit from this approach. Again, there are questions of how this dovetails into Welsh Government programmes such as Superfast Broadband Wales which has been undertaking very similar interventions.
The proposal to expand Innovate UK EDGE which helps to accelerate growth in the UK’s most innovative businesses is to be welcomed. However, there needs to be much greater dialogue with the Welsh Government on how this engages with the key industrial and innovation priorities for the Welsh economy over the next few years rather than working in isolation.
Indeed, much needs to be done in ensuring that there is a greater focus and support by Innovate UK – the UK Government’s innovation agency – given that Wales has only received 2.6% of its innovation grants since 2004. Indeed, the proposal that Innovate UK should continue to strengthen its provision of support for commercialisation capability should be directed towards those nations and regions such as Wales, that need that support urgently.
Therefore, it would seem that there has been little, if any, consultation with government, businesses and universities here in Wales in the development of the UK’s Innovation Strategy. That is enormously disappointing as the sum of the parts of the UK economy definitely is greater than the whole if there is consideration of and how the funding can be applied to support the individual strengths of each nation and region.
Fortunately, the “Strength in Places” programme does just that and should be the model to follow. Yet much of the rest of the innovation strategy seems to be a centralised top-down approach developed in Whitehall that has little to do with a levelling up agenda for the less prosperous regions of the UK.
Obviously, it would be easy to blame both sides for this specific intransigence in communication and co-operation over innovation - one of the most important contributors to economic growth – especially as it is clear that much antipathy and distrust remains between Westminster and Cardiff Bay following a gruelling eighteen months of trying to work together during the Covid-19 pandemic.
Yet, if Wales is to recover over the next few years, then it is imperative that the UK Government works with the Welsh Government (and vice-versa) to make the most of the economic opportunities that we know our universities and businesses can take advantage of with the right financial support.