Final report to the Commission for the New Economy, NWDA & AGMA
Manchester City Region’s scientific research strengths: their relationship to the wider UK economy and existing non-university public sector research
Final report to the Commission for the New Economy, NWDA & AGMA
Contents
Executive Summary 1
1: Introduction 6
2: Non-university public sector research: Overview 10
3: The rationale for strengthening regional research agglomerations 16
4: The Manchester City Region 27
5: MCR and non-university public sector research: the possibilities going forward 37
6: Conclusions and recommendations 43
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Manchester City Region’s scientific research strengths: their relationship to the wider UK economy and existing non-university public sector research
Final report to the Commission for the New Economy, NWDA & AGMA
Executive Summary
Introduction
1. This is the final report of a study of the potential benefits to the UK and the Manchester City Region (MCR) arising from closer connections between the MCR research and skills base and non-university publicly funded research. The study was commissioned by the Commission for the New Economy (CNE), the North West Development Agency (NWDA) and the Association of Greater Manchester Authorities (AGMA) and undertaken by SQW Consulting. The report is based exclusively on desk-based research undertaken between mid-September and mid-October 2009.
What is non-university public research?
2. We have interpreted non-university public research to mean research which is undertaken within an establishment or institute which is part of a (public) organisation sponsoring the research[1]. It includes establishments owned by government departments but also centres and institutes funded by the research councils. Expenditure in Government laboratories was on a declining trend up until 2002, but has become more stable since. Total expenditure in government and research council laboratories amounted to around £2.2 bn in 2007. In comparison, research in the universities was £6.5 bn[2]. Twenty-eight per cent of non-university public research is undertaken in the South East and a further 13% in the London region. While the study has been concerned with non-university public research, we would note that many of the benefits to the MCR and the UK arising from additional investment in the City Region would also be generated by other sources of science and technology funding.
Strengthening regional research agglomerations
3. The success of the UK economy is increasingly dependent on knowledge-based industries and on capabilities in science, technology, innovation and research. This has been the case for the manufacturing sectors of the economy for many years, but STI has become increasingly important for other major sectors of the economy, particularly services. The recent reports from the Royal Society ‘Hidden wealth’ and from the National Endowment for Science Technology and the Arts (NESTA) and others demonstrate this changing role of science and research in the wider economy including services. The UK needs to ensure that all its research capabilities are functioning as effectively as possible, building on existing research strengths and investing in agglomerations of research strength that can form the basis for future success and prosperity.
4. There are major research strengths in regions outside London and the South East. Additional public sector research establishment (PSRE) investment would directly benefit these regions through the additional highly qualified employment they provide, thereby helping to close to wealth gap between regions, and through helping the regions achieve a critical mass in technology-based employment. Additional investment would also help to ensure an efficient allocation of the UK’s research investments. Centres outside London and the South East have developed effective research networks and a supporting infrastructure for the exploitation of research results. PSREs could become better integrated into these networks and would themselves benefit as well as contributing to self-sustaining growth in the regions. A bibliometric analysis[3] undertaken for this study showed that only 3% of scientific publications from organisations within the MCR were with UK public laboratories outside the City Region; substantially less than with foreign public laboratories. This demonstrates that’s links between the City Region and PSREs located elsewhere are poorly developed at present.
5. In order to maximise UK economic potential, it is important to ensure not only that centres of research within the so called ‘Golden Triangle’ have the investment to maximise their potential, but also that important agglomerations of research in other parts of the UK have the investment in facilities and in deepening their scientific and research labour markets that will enable them to be self-sustaining.
6. There are also cost arguments. The Lyons Review[4] set out the case for relocation of public sector jobs from London and the South East to other regions. The review was concerned with civil service jobs in general, rather than research establishments, but many of its findings are highly relevant to the latter. In particular:
· relocation would ease the pressure on the local economies (and also transport and housing infrastructure) of London and the South East
· there would be direct cost savings from relocation arising from lower property costs and salaries in regional labour markets. Assessments of the financial costs and benefits of actual relocations suggest these can be significant
· relocation provides an opportunity to consolidate functions and reorganise processes in more efficient ways. These benefits are in addition to direct cost savings.
7. International comparisons show that several of the large European countries, such as Germany and France, and also some of the smaller economies, such as Sweden and Finland, have relatively high numbers of regional research agglomerations.
The Manchester City Region
8. The background context for the Manchester Independent Economic Review’s (MIER’s) exploration of economic potential of the Manchester City Region was the extremely uneven geographical spread of economic activity in the UK. The Reviewers argued that “Manchester’s size and potential makes it pre-eminent amongst the cities of the North and a natural complement to the South Eastern powerhouse of the UK economy. It has essential economic assets: scale, connectivity and, in the University of Manchester, an international seat of learning of the highest quality. Whilst London will remain the UK’s largest regional economy, the UK is going to need all the areas of growth possible in the coming period.” The MIER Reviewers’ Report concluded that “Outside London, MCR is the city region which, given its scale and potential for improving productivity, is best placed to take advantage of the benefits of agglomeration and increase its growth” and the evidence suggests that “Manchester does have a route to long-term growth that would make a meaningful difference to the UK as a whole – not least as an exemplar for other agglomerations with effective governance frameworks and the size, potential and single-mindedness to drive forward their own economic growth.”
9. Manchester already has a scale of activity in several sectors which generate significant clustering and agglomerative benefits. Crucially, the MCR has the existing base of research and science, as well as the pool of knowledge and expertise to add significant value to any further investments in this field. Investment into Manchester can build on this strength, adding value and making use of the existing MCR offer, and move the city region towards a “tipping point” where a critical mass of innovative activity creates self-sustaining agglomeration impacts to the benefit of the city regional (and national) economy.
10. The science, technology and innovation landscape within the Manchester City Region (MCR) is highly diverse in terms of geographical location, facilities, capabilities and organisational bodies[5]. There are four Higher Education Institutions, over 75 research facilities and institutes, although with very different levels of capabilities and national and international profiles. Organisations within the MCR, mainly the universities, were responsible for almost 6% of all UK publication between 2006 and 2008. Forty per cent of these were produced with foreign collaborators, indicating the quality and depth of research. Three major incubator facilities are located within Manchester itself, and the Manchester Science Park (MSP ) now operates over three sites within Manchester
11. Private sector research companies across the MCR are predominantly associated with pharmaceuticals and biohealth, with AstraZeneca as the anchor for the sector in the region. It has two major sites within Macclesfield; the global R&D site at Alderley Park employing over 4,000 staff and a second manufacturing site within Macclesfield itself employing a further 3,500 staff. The main research capabilities identified outside this sector are within chemicals and aerospace (although, Bae Systems at Woodford in Stockport recently announced the closure of this site).
12. Establishing Manchester as a Science City has provided a focus and drive for the STI agenda and there is a determination on the part of the private and public stakeholders to capitalise on the City Region’s science and technology strengths. A hub of world-class research activity in the South of Manchester across a number of disciplines is known as Corridor Manchester and this provides an anchor for STI activities across the city, extending to Salford in a stretch known as the Arc of Opportunity. The unique combination of assets along Corridor Manchester include the University of Manchester, Manchester Metropolitan University, NHS Hospitals, incubator and science park facilities, along with a number of complementary organisations, and the emergence of numerous spin-out companies, many of which have become well established.
13. The City Region has demonstrated its suitability as a location for PSREs. Most recently, the National Institute for Health and Clinical Excellence (NICE) established an office in Manchester and there are plans for it to double in size from around 120 employers. The Health Protection Agency (HPA) also has a significant presence in the City and the Daresbury Science and Innovation Campus (DSIC), just outside the City region, is long established. There are also examples of inward investment by technology-based firms which will have similar requirements to PSREs so far as recruitment and access to special facilities are concerned. The Manchester Inward Investment Centre (MIIC) initiative has assisted the ‘soft landing’ of international companies into the Science Park and since 2005, some 27 companies from 11 different countries have utilised this resource, relocating from the USA, Scandinavia, Australia, Japan and 17 businesses from China. The BBC will also relocate functions, including part of its R&D activity, to the City Region.
Next steps for the City Region
14. The report identifies a number of PSREs[6] which have a good fit with research strengths in the City Region and for which there is a prima facie case for consolidation of activities. These illustrate that there is real potential for the City Region, although we are not able to say whether investment in the City Region is a real possibility.
15. The study has focused on existing non-university public research, but there may also be other opportunities for non-private (and non-university) research to locate in the MCR. These include
· research council investment in new facilities, Research Councils UK (RCUK) is currently consulting on the Large Facilities Roadmap[7] and a number of “emerging” areas are potentially relevant to the MCR
· ad hoc opportunities involving government (non- research council) investment in new facilities
· internationally mobile investments, which would not displace investment from elsewhere in the UK. This study has not considered internationally mobile investment in and depth, but many of the factors which apply to (UK) public investment are relevant
· and, more speculatively, research charities and professional and scientific bodies which employ scientifically qualified staff in research management and allied functions.
16. We believe action is required on three fronts:
· identification of internationally mobile research and development projects for which Manchester may be a prime location and where joint lobbying and project development may help secure investment for the city region. Hosting such facilities may require additional investment from the UK (as compared with participation alone) but would not reduce investment elsewhere in the country
· identification of how Manchester might play a more significant role in meeting the government’s objectives for public service reform which in this instance would mean looking at how joint collaborations, strategic joint ventures and other kinds of partnerships might be encouraged between PSREs and Manchester institutions in ways which improved outputs and lower costs. We understand that consideration is being given to establishing a new research institute for the digital industries. This could be an excellent fit with the City Region’s research and other assets
· further investigation of the specific opportunities identified in this report. Subject to further work, it may be the case that investment and estates decisions confronting difference PSREs and their parent organisations in any event could be looked at in the context of the Manchester City Region Pilot.
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Manchester City Region’s scientific research strengths: their relationship to the wider UK economy and existing non-university public sector research
Final report to the Commission for the New Economy, NWDA & AGMA
1: Introduction
This Study
1.1 This is the final report of a study of the potential benefits to the UK and the Manchester City Region (MCR) arising from closer connections between the MCR research and skills base and non-university publicly funded research. The study was commissioned by the Commission for the New Economy (CNE), the North West Development Agency (NWDA) and the Association of Greater Manchester Authorities (AGMA) and undertaken by SQW Consulting. The report is based exclusively on desk-based research undertaken between mid-September and mid-October 2009. This included reviews of recent relocations and consolidations of Public Sector Research Establishments (PSREs), developments in individual PSREs and the scientific and technological strengths of the City Region.
Setting the Scene
The Manchester City Region . . .
1.2 The Manchester City Region Development Plan (CRDP, 2006) defines the City Region on the basis of “the natural economy’s travel to work” (see Figure 11) It includes the cities of Manchester and Salford, along with the neighbouring metropolitan boroughs collectively grouped as: