FST JOURNAL

Summary:

• The Innovation Zones Programme in the Liverpool City Region means that when companies come to Liverpool, they get a good deal, including tax breaks, purpose-built facilities and skills support to supercharge their prospects
• The Liverpool city region has a rich economic history and modern assets of innovation but our economy needs to catch up with the South East, and we need to give residents the jobs and opportunities they deserve
• We have a stretch target that we can move towards allocating five percent of our economy’s gross value added to research and development
• We argue strongly that there should be greater transparency in the allocation and spending of nationally supported R&D across regions, and more influential involvement of the regions in setting priorities and making decisions. 

If you want to devolve money, what are you devolving into? What will make it worthwhile? 

I am the Vice Chair of the Liverpool City Region Innovation Zones Programme, and along with the board, we work with the Metro Mayor, Steve Rotherham to help promote innovation and help create good jobs for communities right across the conurbation. 

 The Innovation Zones Programme is a new approach, and it is one of the largest regeneration initiatives in the UK. Bringing together two programmes with national recognition (Freeport, plus Investment Zone), our integrated programme combines capital funding from our colleagues in central government with valuable and significant tax incentives for businesses. When companies come to the Liverpool City Region or expand here, they get a compelling package that can supercharge their growth. We also have skills and innovation funding to make a more attractive package overall—drawing on national support from the “Freeport” initiative established by the UK Government a couple years ago, and from a similar national initiative called “Investment Zones”. 

 We already have business parks and sites that are expanding or coming on stream, and they provide ripe locations for new and expanding companies to establish and grow. The sites are designed for the needs of key sectors which are targeted for our economy to grow. Life sciences is a prominent sector where Liverpool and its region have obvious world-class assets, including in a city centre location known as the ‘Knowledge quarter’. We also have other sectors, particularly ‘modern logistics’ and ‘advanced manufacturing’ where current assets are strong and ripe for expansion. For example, some of our investment is setting up a new business park in Parkside, St Helens, at the edge of the conurbation. 

 At the moment we are wrapping together site locations, financial incentives, and skills and innovation support which can be accessed by new investors and growing companies. This combined approach is entitled the Innovation Zones Programme, because it is innovation which is the element of the wider strategy for the economic future of Liverpool City region to be an innovation superpower. We already have many of the ingredients. For example, Unilever (one of our great companies in the locality), founded its first laboratory in the early 1900s in the Liverpool City region and they have 850 scientists here in the area. We also have our fine universities. The University of Liverpool has the Materials Chemistry Research, with 99% of it rated as world leading or internationally excellent.  We have the Liverpool School of Topical Medicine (LSTM). This attracts very substantial research funding per academic employed, at a rate which compares favourably with other leading institutions, even Oxford. 

 It is clear that when it comes to innovation, the Liverpool City Region has got the history, it has productive assets (people, facilities, intellectual prowess and business entrepreneurship) that make innovation part of our DNA today, but what about tomorrow? Well, we need to do better, because our economy needs to catch up with the South East—to help drive national economic growth in a broader, more sustainable way, and importantly to give residents the jobs and opportunities they deserve.

 What’s next for Liverpool and its City Region?

 We are striving for our stretch target for our economy to devote some 5 percent of gross value added to research and development. That is higher than the average UK performance and so is a heavy lift. Yet the Metro Mayor Steve Rotherham has put it forward because we believe that this type of change is needed to drive the economy for the benefit of those living in the region. What are some of the ways this will come into practice, including through the Liverpool City Region Innovation Zones Programme of which I am vice-chair?

 One compelling opportunity is in important strands of the life sciences industry. It would be fantastic if the UK's preparedness to use vaccines and other therapeutics to take on the next pandemic was anchored here in Liverpool, using our strengths in research & development and in bio-manufacturing. This is why the Innovation Zones Programme is putting capital funding into infrastructure, including new high tech commercial labs here in the Liverpool Knowledge Quarter, and at the Sci-Tech campus in Daresbury. We are also expanding partnerships with globally significant national companies that manufacture vaccines and other medical therapeutics. 

 Indeed more broadly, for the UK and its corporate base, almost 50% of trade with North America goes through Liverpool.  That can grow substantially, but it would be better if it could be expanded and made more cost-effective with greater digitisation of customs and the trade regime. That is the type of challenge that we are putting innovation funding into with Liverpool University and its consortium partners. Our local resources are limited, however, and this is why we come to the debate about how to get more devolution and a more equitable distribution of national R&D spending to the city-region level.

 A case for devolved budgets

 I left Liverpool in the early 1980s and this place was struggling then. The contrast with London was quite extreme. I worked overseas for nearly three decades and on my return I am really quite proud to see how Liverpool and the city region has rebounded, re-organised and regained their civic pride. That is very encouraging, and we are moving forward at pace, but we know our competitors are not standing still. 

 That is why we, as a national community across the country, have to tackle the issue of making national research & development investment more purposeful for growth in places where it is needed most. We need new and improved national policies and budgets which drive research and development in a better and more equitably targeted way across English regions. That change needs to happen quickly and decisively. 

One way of doing it would be through integrating it within wider political moves for devolution to city regions (metropolitan combined authorities). Certainly, in the Liverpool City region, that would play into a wider canvas of our enhanced capability to deploy combined local and national resources for locally determined economic and social needs. We have the Liverpool City Region Combined Authority that has been around for almost ten years now. The Combined Authority led by Metro Mayor Rotherham has experienced staff, solid financial systems, and operational capacity to take charge of devolved R&D spending allocations. A change in the approach nationally does not have to move to a blank canvas—we have actually got the institutional and financial strength here in the Liverpool City Region to take this on without delay.

 Another important advantage of devolving national R & D to city regions, is that we are much better placed to match up national programmes with other sources of finance that we already have, or are coming on stream. Now I recognise there are arguments in favour of elements of the existing centralised system because some elements of policy are probably more sensibly set nationally rather than at the local level. However, my plea would be that there can be greater transparency in allocations and spending across regions, and more influential involvement of the regions in priority and decision making. 

 We are keen to be involved in a constructive conversation on this and to change the status quo. There is a way to deliver it, whether it is the full scale reform of devolution or a hybrid approach which combines national and devolved resources. There is a way to make a change so that the Liverpool City region and other places can have a fairer slice of the “national R&D pie” that we contribute towards. That will be a major step to ensure that the power of innovation, of research and development can be better harnessed, as it was in the industrial mercantile age. That was a time when Liverpool and other northern cities flourished—and our future will see them flourish again.