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NESTA CEO highlights recession busting strengths of UK

29/10/2008

"The ingredients for survival in a downturn hinges on the ability to connect with markets that focus on new science, technology and innovation within and beyond the UK."

Innovation is the key weapon for the UK to beat the economic downturn according to Jonathan Kestenbaum, Chief Executive of the National Endowment for Science, Technology and the Arts (NESTA).

New research published by NESTA today shows that connecting with new markets and exploiting international opportunities will be the key ingredients for UK regions to remain competitive in recessionary times.

The NESTA analysis maps the UK's innovation strengths region by region. It demonstrates that regions most likely to thrive are those with strong international networks to other innovative nations and the ability to share that knowledge across the region.

The UK regions best equipped to come out of the recession are London, the South East, East of England and Scotland's central belt. This is because they are globally well connected and less dependent on their resources coming from any one particular country.

The report cites the West Midlands and North West as being among the strongest to access knowledge and business players globally, while Wales and Northern Ireland were among the weakest placed to benefit from global networks and learning opportunities.

Jonathan Kestenbaum, Chief Executive of NESTA, said,

"This research is important because it demonstrates that no region, with the possible exception of London, will be able to withstand the economic crisis in isolation. The ingredients for survival in a downturn hinges on the ability to connect with markets that focus on new science, technology and innovation within and beyond the UK.

"Traditionally, the keys to successful innovation were considered to be the ability to create knowledge and exploit it. However, the dynamics are changing. Those who can access knowledge, bring it home and share it around are more likely to build a healthier economy."

Jonathan Kestenbaum also warned that if the UK does not connect with new markets, then it risks remaining stagnant: "At a time when budgets are tightening and profit margins are shrinking, the UK is naturally starting to make decisions about where to cut costs. However, we must resist the temptation to think there is a tension between driving efficiencies and supporting innovation, and instead learn to respond flexibly and creatively."

Analysis highlights:

Best connected UK regions: The Greater South East, West Midlands and the North West have the strongest ability to access knowledge and business players globally.
Best knowledge sharing UK regions: London, South East, Scotland, the North West and Wales are the best at spreading new learning among the local population, workforce and firms.
Best knowledge creation UK regions: London, East of England, South East and Scotland have a high concentration of Russell Group universities and R&D intensive firms making them leaders in knowledge creation.
Best knowledge exploitation UK regions: London, the South East, South West and Yorkshire & Humber have a large number of firms that utilise new processes, products and services resulting in a strong competitive advantage.

"A surprising outcome was to see Yorkshire & Humber come out as one of the strongest knowledge exploitation regions. Contrast to popular perceptions, Yorkshire and the South West emerge as having a larger than average seed capital investment going into the exploitation of new ideas."

NESTA's Jonathan Kestenbaum stressed that to avoid a stagnating economy, the UK must:

Ensure UK cities, regions, and nations have access relevant national and international sources of new knowledge, ideas and innovation.
Draw on knowledge of local firms and universities that are currently the leaders in a specialised field and exploiting that across the region.
Make greater investment in organisations and firms that have the capacity to spread knowledge in the local economy which will ignite increased innovation.
Cease the creation of one-size-fits-all regional development strategies and instead focus on the regional strengths and weaknesses to develop cross-regional innovation plans.

"These lessons are not new. History tells us that some of the world's strongest economies established their economic fortunes during their darkest times by connecting through key markets A crisis can be a powerful stimulus for brilliant ideas and new opportunities, but the UK must be flexible and use innovation strengths if it is to come out of the recession stronger."

Contact:

NESTA Press Office: Jo Oakes on Tel: 07891048915, email Jo.Oakes@nesta.org.uk.

Notes to editors

NESTA
NESTA is the National Endowment for Science, Technology & the Arts. Its mission is to transform the UK's capacity for innovation. With the largest portfolio of early-stage businesses in the county, it is a leading authority on how to support and grow new ideas. NESTA also devises radical approaches and shapes policy to address today's pressing economic, social and environmental challenges. www.nesta.org.uk

Innovation by Adoption - Measuring and mapping absorptive capacity in UK nations and regions: This report was conducted by collecting data for 26 indicators for each of the UK administrative regions and nations and assigning these to the five dimensions within the report framework. View the full report here.