With an ambitious aim of tackling regional inequality, the Levelling Up White Paper (LUWP), published in early February 2022, presents the Government’s vision for regeneration and economic growth. Key to its policy programme will be investment and growth in the Research and Development (R&D) sector.

The LUWP commits to an overall national R&D investment target of £20 billion by 2024-25, while the Government’s Life Science Vision (July 2021) sets out its target for the UK (across government, industry and philanthropy) to invest 2.4% of GDP in R&D by 2027.

Alleviating the bottleneck through decentralisation

A key plank in the Levelling Up agenda is to 'boost productivity, pay, jobs and living standards' by increasing the R&D spend outside the South East by 40% by 2030, while leveraging 'at least twice as much private sector investment over the long term to stimulate innovation and productivity growth.'

The reason for this is that historically these high productivity jobs have landed in the ‘Golden Triangle’ made up of London, Oxford and Cambridge. Over the last decade, approximately 80% of the venture capital raised by life sciences companies was headquartered in London, the South East and the East. The last three years have seen this rise to 86%, driven by Oxford, Cambridge and London. This is significant considering that the UK has seen capital investment in life science companies grow from £5.75 billion in 2010 to £16.7 billion in 2020, a rise of 372%. However, core markets are experiencing severe real estate bottlenecks and constraints. In 2021, Oxford reported 3.8% lab space availability, while Cambridge reported close to 0% availability.

Decentralisation of R&D funding, along with the significant increase in investment in R&D real estate, infrastructure and skills and education, could alleviate these bottlenecks. Many top life science research institutions, centres of academic excellence and companies are spread throughout the UK and are key hooks on which to base this decentralisation strategy.

As noted in the White Paper, 'Levelling Up will only be successful if local actors are empowered to develop solutions that work for their communities'. There are many cities that stand out as credible and strong growth prospects for the life science and human health sectors. The LUWP proposes to target £100 million of investment in Innovation Accelerator pilots in Greater Manchester, the West Midlands and the Glasgow City Region to foster clusters which leverage private-public academic partnerships.

Bridging the skills and education gap

For regions to access the promised public sector R&D funding, and the potential private sector co-funding this could potentially unlock, regional areas will need to bridge skills and education gaps.

Research by PricewaterhouseCoopers for the Life Sciences sector in 2017 reports a multiplier effect of +2.5 for the UK. The life sciences supply chain presents a massive opportunity to attract manufacturing and services jobs, however, at its core will still require access to in-demand advanced STEM degrees. So, while research funding is key, and so is its decentralisation, so too is the funding of new universities, colleges and advanced degrees, which will need to access funding beyond levelling up.

The role of planning in attracting talent and investment

At the heart of facilitating this growth is the ability to attract and retain talent from national and global labour pools. There is a clear commitment in the LWUP to “set a more positive approach to employment land in national policy to support the provision of jobs”.

The importance of the planning system to delivering land in the right places and creating environments where people want to live, and work should not be overlooked. Planning policy and decision making should ensure a sufficient supply of employment as well as housing land in the right places. Delivering high-quality and well-designed communities with access to public transport and social amenities is important to attracting and retaining talent.

Local planning authorities could be proactive in engaging with businesses and institutions in their locale to understand their needs. While zoning has now been squarely dropped by Government, the White Paper’s suggestions of further devolution and planning reform should provide even more tools for local planning authorities to deliver what is needed. More use could be made of tools such as Local Development Orders and Brownfield Land Registers to simplify planning and accelerate employment development.

Unlocking potential requires local leaders to identify and promote the hooks or beacons that will attract investors and provide catalysts for growth, and to ensure the right environment is created to support it. The opportunity here is not just the productivity boost of increasing education funding or feeding the R&D sector’s labour needs, but the opportunity for new institutions and campuses throughout the UK to anchor new Innovation Districts which attract private sector funding, and large indirect/spill-over benefits via boosts to productivity.

While this will take upfront public sector investment, the return over the lifetime of these projects has the potential to repay the public sector several times. When assessing these projects, the business case needs to consider the wider social and economic benefits and effects that can occur.

_{Read the articles within Spotlight: Life Sciences – Trends & Outlook below.}