The EU2020 strategy looks to take Europe out of recession by “smart, sustainable and inclusive growth”. The message from an on-going European research project is that different places are taking different routes, and that there are wide variations between UK regions in provision of knowledge intensive services.
R and D is not the whole story
The ESPON project on Knowledge, Innovation and Technology (KIT) strongly advises those involved in planning for economic development to get beyond the idea that the knowledge economy is all about scientific research and development. The view that boffins in laboratories shriek “Eureka” as a light bulb illuminates above their head has long been regarded as outmoded in the literature on innovation. Nor does it follow that even a viable commercial idea results in the capture of the market , especially by firms local to the area where the idea came from. The fax machine was invented in Germany but it was the Japanese who cornered the market.
Thus R and D investments are not necessarily the right way to grow a knowledge economy – and are certainly not the only way to approach that challenge. It is interesting to find that the region with the highest % of employees in R&D sectors is North Eastern Scotland (UK) (5.71%), though Caledonia also has the region with the lowest percentage in the UK, Highlands and Islands (0.18%).
The KIT researchers, which include teams from the London School of Economics and from Cardiff University, take a much more sophisticated and multi-dimensional view. They do not deny that sectors like “science based” and high technology industry can be important. Indeed they identify “technologically advanced regions” where these are strongly represented. The UK has 17 out of the 62 regions in Europe in this category, though there are 21 in Germany, and others in Belgium, France, Switzerland, Finland, Denmark and Sweden.
However, there are also what they call “scientific regions”. These are places where there are big and often famous scientific institutions and a strong regional R&D base. These are concentrated in the centre and in the north of Europe, and most of them are in Western countries. This equation of knowledge with scientific research is at the core of the EU2020 view of “smart growth”. However, few regions are actually achieving – or likely to achieve – the 3% GDP investment in R&D that EU2020 aspires to.
The third way?
Thirdly, there are “knowledge networking regions”. These are places where information and ideas may well originate outside the region, but the region is adept at taking such stimuli and converting them into innovations and products. This may come about through markets and or through patterns of co-operation. Importantly, there are more regions in this category (123) than in either of the previous two. This suggests that it is perhaps that this route may be accessible for a wider range of regions, though Eastern and Southern Europe still perform badly in this category.
By understanding these differences – and relating them to local and regional strengths – policy makers and practitioners have a better chance of supporting and realising local potentials.
Some of the messages from the researchers are as follows:
- Some regions may be highly specialised in advanced knowledge sectors, but others can play the role of knowledge nodes;
- Although “scientific regions” have a high innovation rate, it is only slightly higher than that of regions in the other two categories: invention, innovation and diffusion do not necessarily march in step together, and regional situations seem to make a difference;
- There seems to be a case for a strong regional level input into the aims and policy instruments of an innovation policy;
- Europe will very quickly find that its competitors in research activity are not just the US, but the emerging economies of Asia, where strong concentrations of R&D activity are emerging .
How might Europe and the UK respond? In the former the idea of a European Research Area promises to be “an open space for knowledge”. In the UK, Peter Hall has recently been writing about the regional implications of the concentration of major research institutes in the “golden triangle” of Oxford, London and Cambridge, epitomised by the development of the multi-disciplinary centre of medical research excellence, the Francis Crick Institute, next to St. Pancras Station in the heart of London. Other regions, faced with the vagaries of higher education policy and the uncertainties of private sector research investment, will need to cherish and work closely with their innovators and knowledge generators.