Researching the role of connected innovation in the UK

In a report commissioned by the Smart Specialisation Hub, Steer Economic Development presented the main findings emerging from our exploratory investigation of how the UK’s evolving Industrial Strategy can better reflect the role that ‘connected innovation’ plays in driving innovation performance through Global Innovation Networks (GINs).

This ‘connectivity’ in innovation applies to academic research and industrial participation in Global Value Chains (GVCs), helping to amplify the effects on place-based innovation. Consequently, if the nature, extent, and impact of this ‘connectivity’ is overlooked in place-based thinking, then resulting strategies risk being less effective than would be the case if they embraced the opportunities offered by ‘connected innovation’.

The first part of the report proposes a strategic framework for thinking about ‘connected innovation’, based on considering the ways in which place-based innovation benefits from participation in global academic research networks - labelled Global Innovation Networks (GINs) by the OECD, and also participation in GVCs.

The second part of the report proposes a prototype methodology for translating this strategic framework into a new evidence base to inform industrial strategy thinking. Initially to provide a ‘demonstration of principle’, UK patent data were used to illustrate how Local Enterprise Partnership (LEP)-based innovation footprints might be mapped as thinking on place-based strategy moves forward. At national and regional levels, the methodology would need to be implemented using international (mainly European Patent) data for a more accurate reflection of innovation activity.

This illustration of the prototype framework demonstrates that it is possible to produce a mapping of place-based innovation footprints cost-effectively. These footprints allow the similarities and the differences between LEPs (and, by implication, also Northern Ireland, Wales, and Scotland) to be assessed to inform industrial strategy.

The report also:

• Highlights the case for undertaking additional analytical work, using patenting data elsewhere in both the UK and the rest of the world.
• Considers some aspects of regional and national participation in GVCs to provide useful insights on how value added to imports can support exporting from a region.
• Demonstrates how OECD data on ‘Trade in Value Added’ (which captures inter-dependencies between national economies) can be used to identify broad patterns of GVC connectivity in the global economy with a pilot analysis. This shows that the concept of GVCs is not only conceptually appealing, but it can also be implemented in practice.

The report concludes by posing a set of questions for stakeholders to consider when discussing how best to proceed in the future. Responses to these questions will be used by the Smart Specialisation Hub to develop its approach to providing a richer evidence-base on ‘connected innovation’.

A full copy of the report is available on the Smart Specialisation Hub.