The first half of 2023 has been busy for UK research and innovation policy. The newly minted Department of Science, Innovation and Technology – the first appearance of “technology” in a central government departmental title since the 1960s! – published its UK Science and Technology Framework in March. Alongside, it published the Independent Review of the Research, Development and Innovation Organisational Landscape by (Nobel prize-winning) Paul Nurse. Days later, we had Budget 2023 including details of the re-purposed investment zones focused on knowledge-clusters, and Innovation Accelerator projects. We’ve also had a Quantum Strategy, a White Paper on AI, a Green Finance Strategy, and a DSIT report on boosting innovation diffusion and adoption. At the same time, local areas have been developing plans for UK Shared Prosperity Fund monies, including – although by no means only – to support local innovation.
With so much to read and review it’s hard to know where to look … and how to join the dots. However, thinking about one element of this evolving landscape, a new research report published by the Enterprise Research Centre (ERC) in May 2023 on the ‘spillover’ effects of Catapults is timely given this backdrop, with implications both nationally and locally.
‘Catapults’ and the role of translational research organisations
Established by Government, Catapults are “physical centres with a unique combination of cutting-edge R&D facilities and world class technical expertise” (see here). They span a range of different technologies, including high value manufacturing and offshore renewable energy, cell and gene therapy and medicines discovery (and much else besides), and are distributed widely across the UK’s nations and regions; for an overview of the network see here. Catapults are an important example of ‘translational research organisations’ which help promote and implement innovation, and provide R&D and innovation services to businesses, and form a key element of the broader research and innovation system.
These translational research organisations were a particular focus of the Nurse Review. Given their important role in translating research excellence to innovation and the adoption of new practices in the business base, the Review recommended that Government should support more of them, widen access to them, and promote their benefits more fully, including regionally. However, it also recognised that previous research had found more could be done to leverage their role in supporting local economies and building innovation clusters.
Evidence on the local impacts of Catapults
This links us back to the ERC report, which considered the evidence on the local ‘spillover’ effects of Catapults; put simply whether firms in the areas where they are based benefit from their presence in any way, even if they have not previously directly engaged with the Catapult. This would seem to make intuitive sense, given the potential for supply-chain linkages, and knowledge sharing between people and across networks in local areas. Further, we know from our own work at SQW that Catapults have played important roles in driving local growth in particular places; indeed, I discussed two notable examples – the Advanced Manufacturing Research Centre (part of the High Value Manufacturing Catapult) in Sheffield, and the Cell and Gene Therapy Catapult Manufacturing Centre in Stevenage – with colleagues on a recent episode of SQW’s Insight for Impact podcast. The Cell and Gene Therapy Catapult for example has been found to have played a key role in driving the development of a globally significant cell and gene therapy cluster in Stevenage (see here for more).
However, the Catapults are also national assets, specialised in particular technologies and disciplines, which may have limited direct links to the broader cohort of businesses in areas they are based. Quantitative evidence on their impacts locally, outside of the firms they work with directly, has therefore been limited.
The ERC findings are noteworthy in this context. As well as increasing the likelihood that unsupported firms will in future engage with the Catapults, the report suggests that the presence of a Catapult in an area leads to employment and turnover growth, and an increase in labour productivity through knowledge spillovers. Specifically, using econometric techniques, the report estimated there was a 2% increase in productivity for unsupported firms after the opening of a Catapult centre within a 1-kilometer radius. Further, Catapults were found to stimulate the birth of new start-ups in the immediate proximity of their centres, and there are potential indirect ‘demonstration effects’ as unsupported firms see other local firms engaging and benefiting from engagement with the Catapult network, and this encourages them then to engage. Put simply, as summarised in the report, “Catapult centres generate positive local spillovers both directly and indirectly through the firms they work with.
Joining the dots …
Although care is needed in using precise estimates of impact given the inherent uncertainty in such analyses, these findings from the ERC are a valuable addition to the evidence base on the impacts of Catapults in the context of the levelling-up agenda, considering how to address sub-national imbalances in research and innovation and productivity, and boosting issues of diffusion and adoption across the wider business base.
Whilst complex at a local level, with different places more or less able to benefit from spillovers, and it does not mean there should be a Catapult, or similar translational research organisation in “every” local area – at some point there must be a risk of diminishing returns – the findings do help to strengthen the case made by Nurse to increase the UK’s translational research organisation capacity, given both the direct, and the indirect benefits they can generate for local businesses. It also highlights the need for Government to think about the spatial as well as the sectoral/technology distribution in responding to this recommendation, helping to join the dots across agendas, and delivering against both its research and innovation, and levelling-up ambitions.