- Midlands Innovation is a strategic research partnership of eight research intensive universities. Universities in the Midlands and the pan-regional growth body, the Midlands Engine, are piloting how universities can work together to attract foreign direct investment into regional research and development. HEPI’s report, The Role of Universities in Driving Overseas Investment into UK Research and Development, published on 7 March 2023, provides national analysis of what is happening.
- Here, Professor Nick Jennings, Vice-Chancellor and President of Loughborough University, writes as part of a series from Midlands Innovation on the key considerations for policy makers and the Higher Education sector on increasing investment into regional R&D through universities.
- On 25 April 2023, there will be an interactive webinar on ‘Universities as Drivers of FDI into UK R&D’. Register for a free place here.
The UK has much to offer foreign investors: diverse, cutting-edge industries, a deep pool of highly skilled talent, and a wealth of world-class research and innovation. Foreign direct investment (FDI) plays a substantial role in our economic growth, productivity and employment, and universities are key players in the efforts to secure it.
FDI is a significant source of private sector funding into university research and development. According to HESA data, in the last five years, English universities secured £1.246 billion in overseas industry income accounting for about 45 per cent of all industry income.
UK universities’ research and innovation is undoubtedly attractive to overseas investors, but in a competitive market we cannot afford compliancy. How can UK universities maximise FDI opportunities?
For me: we have to collaborate more often and more effectively to combine our complementary strengths and harness our collective power. It is said that universities do not, or will not, work together, that their competitive nature prevails – this is not true. Universities collaborate all the time on research and innovation, teaching and education and facility development. Working together to secure FDI is a natural next step.
It can be complicated though, and collaboration and partnership are key to navigating this; universities working collectively with local growth partners, regional development organisations and government departments.
I consider the way to secure FDI as a funnel. Firstly, we attract the funding into the UK, and that starts with government. They have to make sure the UK is an attractive proposition and an easy place to do business.
Then local growth partners, such as the Leicester and Leicestershire Enterprise Partnership, and organisations such as Midlands Innovation, a collaboration of eight research-intensive universities, go into bat for the regions, attracting international investment into local innovation clusters, which in turn filters through to universities.
This coordinated, multi-agency approach lies at the heart of the new Universities as Drivers of Trade and Investment Pilot – a unique initiative involving Midlands Innovation and Midlands Enterprise Universities (which represent 15 universities), local growth partners, and government. It is co-funded by the universities, the Department for Science, Innovation and Technology, UKRI (AHRC) and the Department for Levelling Up, Housing and Communities through the Midlands Engine Partnership.
The Pilot was established to provide a proof-of-concept that explores the potential for universities to be more involved in national and regional inward investment policy-making. Universities are well represented in the Midlands Investment Portfolio, a compilation of the region’s capital and FDI opportunities produced by the Midlands Engine Partnership. They are involved in 25 per cent of over 80 priority opportunities, university-linked propositions total £10.5 billion in Gross Development Value and span sectors including; transport technologies, zero-carbon energy, and health and life sciences.
Areas in which Midlands universities have real strengths and expertise that, when combined, are genuinely world-leading.
The Pilot is working with government and the Science and Innovation Network in four target markets – Australia, Germany, Singapore and South Korea – to explore the practicalities of promoting these opportunities to major international investors.
One Midlands investment opportunity is the High Potential Opportunity for Rehabilitation in Leicester and Leicestershire involving five universities. The region is a centre for rehabilitation excellence, offering a unique combination of research and innovation, development, manufacturing and clinical assets – all with potential for substantial and sustained growth. It offers investors access to pioneering academic and clinical research centres, including the Defence Medical Rehabilitation Centre, National Rehabilitation Centre, the Leicester Biomedical Research Centre and the National Centre for Sport and Exercise Medicine, to develop and commercialise rehabilitation technologies that address complex trauma and chronic conditions.
This is a perfect example of the approach we must adopt if the UK and universities, are to secure FDI –we cannot be parochial. A share of funding may come to projects involving my university (Loughborough), and some will not. I am comfortable with that. We would all like our universities to benefit from every investment opportunity, but we have to think more broadly and selflessly. We need to prioritise the benefits to the wider region.
The Pilot illustrates the benefits of universities being ready. Ready to articulate the opportunities, the immense talent and innovation assets they provide their local areas and ready to play their part in a seamless, joined-up approach with government and local growth partners.
The UK must realise that international competitors are ahead in terms of agility and responsiveness. Government needs to bring universities off the bench to form a more effective, dynamic team capable of capitalising quickly and efficiently on opportunities. Starting from scratch, having to undergo lengthy negotiations or wrangle with ‘small p politics’, means universities, regions and the UK will miss too many opportunities.
If we harness the power of collaboration to scale-up our strengths, ambitions and our offer, universities are undoubtedly stronger in the hunt for FDI. Our research and innovation is amongst the best in the world – let us do everything we can to make sure investors know it.