- This HEPI blog was kindly authored by Helen Turner of Midlands Innovation. This is the final blog in the Foreign Direct Investment (FDI) series. You can read the previous blogs here:
- High quality skills as a means of attracting FDI and reducing regional inequality.
- Stronger together: the power to attract overseas investment through partnership working
- Beyond the transactional: Three lessons from Australia for Foreign Direct Investment in research and development
- Research security, a vital aspect of Foreign and Direct Investment
HEPI’s report, The Role of Universities in Driving Overseas Investment into UK Research and Development, published on 7th March 2023, provides national analysis of what is happening in this space. This blog discusses the key considerations for policy makers and the Higher Education sector on increasing investment into regional R&D through universities.
Midlands Innovation is a collaborative partnership of the universities of Aston, Birmingham, Cranfield, Keele, Loughborough, Leicester, Nottingham and Warwick. The ethos of our partnership is Together We Are Stronger. HEPI’s recent report: The Role of Universities in Driving Overseas Investment into UK Research and Development highlights the importance of universities working together or hunting in packs to attract Foreign Direct Investment (FDI), even if it that means individual institutions initially missing out on funding. But why should they? That’s one of the questions a pilot in the Midlands is looking to answer.
The Universities as Drivers of Trade and Investment pilot is examining how universities can play a more central and deliberate role in attracting FDI on a regional scale through the global connections that universities have and to tap into their expertise in supporting businesses through innovation. The pilot, which provided the inspiration for HEPI’s report, involves fifteen universities across the Midlands Innovation and Midlands Enterprise groupings. We are working jointly on the pilot with the Midlands Engine, the government’s pan-regional growth partnership.
Our initiative is co-funded by the universities, the Department for Levelling-Up, Housing and Communities (via the Midlands Engine partnership) and the Department for Science, Innovation and Technology (via their Tactical Fund).
In 2022-23, our focus is on the role of universities and FDI into R&D. Other activity is also taking place to look at how universities can support local trade and visitor economy priorities.
We are delivering an ambitious programme of activity that both demonstrates and advocates for the role that universities can play in helping drive international trade and investment into their local and regional economies.
Why does this matter and why is Midlands Innovation taking part?
The Midlands Engine has identified increasing investment into the region as a priority for closing the regions productivity gap – we want to work with our partners to help universities to play their part in addressing this need.
In 2020/21 the Midlands benefitted from 217 FDI projects – 17 per cent of England’s total. This resulted in the creation of over 6,500 new jobs – 20 per cent of England’s total according to the Midlands Engine Global Investment Scorecard, while investment levels in the East Midlands have recovered to their 2019 position, in the West Midlands the figures have not yet recovered to pre-pandemic levels.
We believe that the Midlands has a huge amount to offer and see promoting the region’s many R&D strengths internationally as part of our role in championing the region.
We believe this is an agenda that plays to collaboration – we want to get to a place where we can work together to attract big investments into our region that will support all of us. In 2022 I blogged for HEPI about Midlands Innovation’s collaborative work in nationally championing the role of technicians and, wrote that sometimes it is more efficient to deliver activity in collaboration. Working together to attract FDI enables us to present a stronger, more coherent narrative and is more efficient and more impactful.
As one of our space experts says – compared to what US cities and states can offer overseas investors, one university cannot fully satisfy the entire appetite of significant global investors. However, as a wider region, the Midlands could. Collectively we have nearly 1000 experts across Midlands Innovation in the fields associated with space. This combined with our research facilities and the wider manufacturing strengths in the region, starts to create a compelling cluster opportunity which builds on the world-leading space expertise of the University of Leicester and Space City Leicester. Such clusters pose a very attractive proposition for overseas investors looking to tap into academic expertise, a pipeline of talent, access to facilities and much more.
The HEPI report – which also highlights that FDI in English regions happens on an ad hoc basis and in the absence of a national policy framework – provides the insights and recommendations for the start of a dialogue. We hope the provocations drawn out through the blogs in this series for HEPI build on that by offering further perspectives and considerations for national policymakers and the sector.
We have hosted an online interactive webinar discussing the HEPI report, with the Ministers for Science, Research and Innovation and Investment providing a live introduction, if you are interested, you can view a recording of the session here.
As the Midlands pilot progresses, we look forward to sharing further insights. We want the UK to attract FDI into regions beyond the investment which, HESA data shows, has largely been attracted into London to-date. This will help regions to level up, to drive growth across the UK, increase our country’s productivity, and to create the highly skilled jobs that we know FDI is capable of providing.
Midlands Innovation is a strategic research partnership of eight research intensive universities across the Midlands. 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.