Abstract
The West of England Combined Authority (henceforth, WECA) is responsible for the economic development and strategic planning of the region. To effectively support the region's economic growth and competitiveness, the WECA recognises the need to enhance innovation and productivity in its area of jurisdiction. To achieve this, the current report provides analytical insights on the productivity, Research and Development (R&D) and innovation landscape in the West of England. We hope the report would effectively inform the development of WECA’s regional economic strategy and the implementation of its Plan for Innovation.
The WECA comprises a diverse ecosystem of businesses, ranging from large enterprises like Rolls Royce and Airbus to a significant proportion of SMEs. However, there is currently a lack of region-specific analysis on business productivity, R&D, and innovation. Therefore, conducting research in this context is crucial to gain a deeper understanding of the local innovation ecosystem and to design targeted programmes and funding initiatives to improve the economic performance of the WECA.
In particular, we aim to answer the following eight research questions:
1. How productive are businesses in the WECA?
2. How does productivity in the WECA compare to productivity in other authorities?
3. Does the WECA punch above or below its weight as determined by its population and skills/qualifications in the local economy?
4. How widespread is innovation in the WECA?
5. What types of innovation are WECA businesses most likely to engage in? Also, how common is it for WECA businesses to engage in R&D activities and form R&D collaborations within their business group?
6. How does the WECA compare to other authorities in terms of innovation?
7. Which industries in the WECA exhibit the greatest innovation capability?
8. How does the WECA compare to other authorities in terms of the innovation capability of their industries?
In answering these questions, we use publicly available data published by the Office for National Statistics (ONS) and the Smart Specialisation Hub (SSH). For productivity, we used the subregional productivity data published in the Annual Business Survey (ABS), for innovation we used the UK Community Innovation Survey (UKCIS), for local skills we used the Employers Skills Survey (ESS), for local qualifications and local population we used data from the Census 2021, and for innovation capability we used data from the Smart Specialisation Hub. However, not all data are available at the Combined Authority level (i.e., WECA). In these cases, we use data at the Local Enterprise Partnership (LEP) level which correspond to a wider geographical area to the WECA, i.e., the West of England LEP (henceforth, WoE LEP).
Overall, we show that the WECA is the most productive Combined Authority (excluding the London area) and more productive than the LEP in which it belongs to (i.e., the WoE LEP). We also show that the WoE LEP is among the 10 most innovative LEPs in England but not among the 10 most productive LEPs which naturally poses the question on how the WoE LEP can effectively use its innovation-capable industry in generating productivity gains thus not missing out on further growing the local economy. In this respect, the significant UKRI funding in the wider Gloucestershire, Wiltshire and Bath Bristol area (as we also present) can play an important role. We also find that the WECA punches above its population weight in terms of productivity, while the WoE LEP above its population weight but below its human capital (qualifications) weight.
In feeding WECA’s regional economic strategy and the implementation of its Plan for Innovation, we hope this research will contribute towards better informing regional policy decisions, shaping targeted funding programmes, and facilitating collaborative initiatives that could turn the West of England into a beacon of excellence in R&D whilst effectively transforming innovation into productivity gains. This, in turn, would lead to job creation, increased competitiveness and economic growth benefitting not only residents but the wider community.
The WECA comprises a diverse ecosystem of businesses, ranging from large enterprises like Rolls Royce and Airbus to a significant proportion of SMEs. However, there is currently a lack of region-specific analysis on business productivity, R&D, and innovation. Therefore, conducting research in this context is crucial to gain a deeper understanding of the local innovation ecosystem and to design targeted programmes and funding initiatives to improve the economic performance of the WECA.
In particular, we aim to answer the following eight research questions:
1. How productive are businesses in the WECA?
2. How does productivity in the WECA compare to productivity in other authorities?
3. Does the WECA punch above or below its weight as determined by its population and skills/qualifications in the local economy?
4. How widespread is innovation in the WECA?
5. What types of innovation are WECA businesses most likely to engage in? Also, how common is it for WECA businesses to engage in R&D activities and form R&D collaborations within their business group?
6. How does the WECA compare to other authorities in terms of innovation?
7. Which industries in the WECA exhibit the greatest innovation capability?
8. How does the WECA compare to other authorities in terms of the innovation capability of their industries?
In answering these questions, we use publicly available data published by the Office for National Statistics (ONS) and the Smart Specialisation Hub (SSH). For productivity, we used the subregional productivity data published in the Annual Business Survey (ABS), for innovation we used the UK Community Innovation Survey (UKCIS), for local skills we used the Employers Skills Survey (ESS), for local qualifications and local population we used data from the Census 2021, and for innovation capability we used data from the Smart Specialisation Hub. However, not all data are available at the Combined Authority level (i.e., WECA). In these cases, we use data at the Local Enterprise Partnership (LEP) level which correspond to a wider geographical area to the WECA, i.e., the West of England LEP (henceforth, WoE LEP).
Overall, we show that the WECA is the most productive Combined Authority (excluding the London area) and more productive than the LEP in which it belongs to (i.e., the WoE LEP). We also show that the WoE LEP is among the 10 most innovative LEPs in England but not among the 10 most productive LEPs which naturally poses the question on how the WoE LEP can effectively use its innovation-capable industry in generating productivity gains thus not missing out on further growing the local economy. In this respect, the significant UKRI funding in the wider Gloucestershire, Wiltshire and Bath Bristol area (as we also present) can play an important role. We also find that the WECA punches above its population weight in terms of productivity, while the WoE LEP above its population weight but below its human capital (qualifications) weight.
In feeding WECA’s regional economic strategy and the implementation of its Plan for Innovation, we hope this research will contribute towards better informing regional policy decisions, shaping targeted funding programmes, and facilitating collaborative initiatives that could turn the West of England into a beacon of excellence in R&D whilst effectively transforming innovation into productivity gains. This, in turn, would lead to job creation, increased competitiveness and economic growth benefitting not only residents but the wider community.
| Original language | English |
|---|---|
| Publisher | Institute for Policy Research, University of Bath |
| Number of pages | 51 |
| Publication status | Published - Oct 2023 |
