From innovation to industrial competitiveness

The UK has an extensive and, in important respects, effective institutional landscape for innovation. Yet outcomes are more mixed when it comes to translating innovation into industrial capability and capturing value in the UK.

A new summary report presents findings from a study commissioned by the Department for Business, Innovation, Science and Trade (DBIST) on the role of the UK’s existing institutions in that transition – from research and technology development towards production and industrial scale. It asks what those institutions are formally expected to do, how clearly responsibilities are assigned as technologies move towards industrial scale, and where responsibility lies for anchoring industrial capability in the UK.

The study builds on previous Cambridge Industrial Innovation Policy work, which identified a distinctive UK configuration: internationally strong science and early-stage innovation alongside a comparatively narrower public applied R&D institutional base, concentration of innovation activity in a relatively small number of sectors, and high mobility of firms and industrial R&D.

“The UK’s strength in science and innovation is a major national asset, but the critical question is how that strength translates into industrial capability and retained value. This study looks systematically at where responsibility sits as technologies move towards production and scale, and how existing institutions might be better connected around industrial outcomes.”

 

– Dr David Leal-Ayala, Lead Author, Cambridge Industrial Innovation Policy

Rather than seeking to identify another barrier to scale-up or asking whether the UK needs another type of institution, the study approaches the problem from a different direction. The analysis asks:

• Has the institutional system evolved alongside the widening policy ambition from technology development towards industrial capability?
• How clearly is responsibility allocated for anchoring industrial capability in the UK?
• What can be learned from UK sectors where sector-level strategic direction and industrial-development responsibilities are more explicitly organised?

Key messages

1. Previous analysis points to a structural imbalance in the UK’s industrial innovation system.
2. The conventional model of “translation” captures an important part of the challenge, but not the whole picture.
3. The analysis suggests that system-level value capture – not only commercialisation – may provide a broader measure of the UK’s innovation system.
4. Formal institutional responsibility appears to become less clearly assigned as technologies approach industrial scale.
5. The most notable gaps relate to manufacturability, domestic supply chains, and capability retention.
6. Translation institutions and industrial firms can be viewed as complementary parts of the same system.
7. The findings suggest there may be greater scope to repurpose and connect existing institutions than to create new ones.
8. Clearer sector-level accountability for industrial value capture may help address the gaps identified.

“We know that scientific leadership does not automatically translate into industrial strength. We will need to adapt the UK R&D system to support reindustrialisation in the UK, at risk of continuing excellence in some sectors but an underlying translation weakness that is a result of our systems.”

 

– Dr Dave Smith, National Technology Adviser

About this study

This summary report highlights the key findings from a study commissioned by the Department for Business, Innovation, Science and Trade (DBIST) to inform the work of the National Technology Adviser, Dr Dave Smith. The study assessed 33 cross-sector institutions and 28 organisations with sector-specific mandates in aerospace, automotive and life sciences, and included stakeholder consultations and seven international comparator cases.

Download the summary report: From innovation to industrial competitiveness

Annexe 1: Classification and evidence criteria 

Annexe 2: International institutional reviews