Call for targeted innovation funding to unlock economic growth for Yorkshire

Earlier this month the Government's Spending Review suggested promise of some limited devolved funding to close the "productivity gap", rebalancing the innovation economy.

Now, with new economic modelling, there are calls from the Northern Powerhouse Partnership (NPP) to focus on targeted growth.

Some £6bn a year, carved out of the wider Spending Review settlement, could unlock up to £206bn for the northern economy, its new report claims.

Jessica Bowles, vice chair of NPP and director of strategy at Bruntwood, said northern cities are rich in potential around sectors such as clean energy – but need help to fully realise it.

"The foundations are already in place, but what’s been missing is government making a strategic, long-term commitment to help these clusters scale and thrive," she said. "Our report shows that the North has the assets to deliver, but it needs the tools to do the job.”

Today's report, Innovation in the North, is published by NPP with Durham University Business School and is launched in the House of Commons.

It maps innovation and strengths across dozens of clusters, evaluating each region's performance on skills, technology, infrastructure and capacity.

This is the "most comprehensive assessment to date" of the North’s innovation ecosystem, it claims, providing a power tool in driving economic returns.

It comes after some £22.5bn a year was outlined towards wider research and development (R&D) funding by 2029/30, in this month's Spending Review.

Targeted investment into the North's most promising sectors, the modelling suggests, could unlock vast sums over the next decade up to £206bn.

The NPP is calling for a "tilt" in Government funding, to focus on this northern innovation.

Sectors such as clean energy, health, digital and advanced manufacturing are all centred in the North but "underperform" in productivity potential without more support, it claims.

The report sets out five recommendations around business rates for lab space to support start-ups and scale-ups, and building on pan-Northern initiatives such as Made Smarter.

Some £3bn a year is needed across the North to drive greater levels of ambition, it claims, while the Local Growth Fund should be targeted regionally to correct funding decline.

Henri Murison, NPP chief executive, highlighted Yorkshire's strengths from financial services and digital in West Yorkshire to defence metals in the South and clean energy in the North.

"In every sub region including the Humber there are many more sectors where they are already above average productivity or employ large numbers," he insisted. "Either growing the scale or increasing productivity could have huge benefits in raising regional productivity.”

Prof Kieran Fernandes, executive Dean of Durham University School, said this is a "critical" step in reshaping the UK's approach.

"The economic evidence is clear: rebalancing innovation spending is not just a question of fairness, but a national economic imperative.”

And to Ms Bowles, unlocking potential means backing the North not just with funding but also with infrastructure and skills.

"We know that innovation doesn’t happen in isolation, it’s embedded in our places, our businesses and our universities," she added.

"Devolved, place-based investment and greater control for local leaders are essential if we want to turn that embedded strength into meaningful economic growth."