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No innovation system is an island

To maintain its globally-recognised leadership role in international innovation, the UK must now, as a minimum, commit to Associate with the Horizon Europe programme, and to an innovation-friendly immigration system.

The UK’s research and innovation system is highly internationalised. Across research collaborations, Foreign Direct Investment in UK research and development (R&D), and UK government support for innovation, the UK is a major player in the global network and ecosystem of innovation.

But Brexit challenges and a changing international innovation landscape potentially threaten the UK’s strong global position, with the recent Brexit extension being described as leaving the UK’s R&D funding position ‘in limbo’. The publication last week of the long-awaited ‘Smith / Reid Review’ of UK international collaboration for innovation provides some welcome insight into the potential routes forward, but the UK must remain maximally engaged with the global innovation system if it is to retain its current - central - global role.

Nesta have developed a range of recommendations for how the Government should rebalance public R&D spend in order to fuel the future of UK innovation. Of those, specifically to help maintain the UK’s international innovation standing we urge that:

  1. The UK works to ensure it has the closest possible relationship to the next phase of EU Research and Innovation funding - the so-called ‘Horizon Europe’ programme; that is, taking a leading strategic role if we remain in the EU, and committing to at least ‘Associate’ membership of the scheme if we leave.
  2. The UK commits to an innovation-friendly immigration regime: both in the specifics of visas for innovators, and in the formal culture of welcoming those from around the world who contribute to the UK’s innovation strengths.

Below, I make the case for these recommendations in the context of the UK’s international innovation position.

The UK’s role in international innovation

In major international comparison studies, the UK’s innovation systems tends to rank fairly highly: usually in the top 5 countries in the large-scale ‘Global Innovation Index’, and near the top of the OECD for ‘percentage of research outputs that are an international collaboration’ (some quoting figures as high as 62% of outputs - most opt for ‘over 50%’).

The UK has achieved this largely despite being an ‘efficient’ innovator: e.g. its world-leading innovation output is achieved while investing only modest public and private amounts compared to other OECD countries. But now attempts have been made for us to ‘catch-up’ with those comparative countries, with the UK government using its Industrial Strategy to create a ‘2.4% R&D intensity target’ to be reached by 2027. While there are some who find this insufficiently ambitious to catch the leading innovation nations like Israel and South Korea, the Campaign for Science and Engineering suggests that even hitting 2.4% would require annual R&D investment to roughly double between 2018 - 2027, from £33billion a year to £65billion; a massive increase in both percentage and real terms, and elicited from the private sector as well as investment by government.

At the same time the UK has been expanding its range of international collaboration programmes on science and innovation, building on existing well-known international science collaborations such as CERN and the JET, and long-standing international innovation support networks such as the Foreign Office’s Science and Innovation Network, to its recently-developed suite of collaboration programmes such as the Newton Fund, the Global Challenges Research Fund and the Fund for International Collaboration - each of which assigns hundreds of millions of pounds a year to innovation collaboration.

Brexit uncertainty and the EU’s ‘Horizon’ research and innovation programmes

But the largest collaborative endeavour in international science, technology and innovation has undoubtedly been the UK’s role at the heart of increasingly-massive European Commission (EC) and then EU research and innovation programmes, of which there are a range, but the core have more recently been branded the ‘Horizon’ Framework programmes: Horizon 2020 (2014-2020), where the UK has been a core and full member, and the forthcoming Horizon Europe programme (2021-2027).

Indeed, the UK has been a highly successful participant in the Horizon 2020 programme, including through shaping and steering its direction, and benefiting from it. Although sources differ somewhat, it seems clear that the UK has been a net strong financial beneficiary from Horizon 2020, despite being one of the richer donors, securing €5.5 billion of funding to date (13.5% of the total) to-date.

EU Science and Innovation collaboration has therefore represented the most comprehensive engagement by the UK innovation system in international innovation collaboration across all types of research, R&D and accompanying exchange and collaboration activities. As such it has tended to be seen as offering a blueprint for strengthening science and innovation ties for other nations - for example those non-EU states such as Norway and Turkey who have had ‘Associate’ membership of the Horizon programmes.

With potential EU exit still on the horizon for the UK, the UK is rethinking how it maintains its central role in international innovation, particularly in relation to the EU model. So Associate membership, where a nation makes contributions and organisations from that nation can be a full partner in almost any EU science and innovation project, is the clearest option for maintaining such close links.

The UK has already (sensibly) dealt with current uncertainty by unequivocally agreeing to match or cover Horizon 2020 programme costs for UK-based organisations, regardless of the outcome of Brexit. But in terms of future arrangements, while a Commons Science and Technology Committee report from back in 2018 makes the case strongly that ‘the Government should explicitly commit to seeking Associated country status for Horizon Europe’ - a quick review of subsequent language from the Government has been rather more circumspect: the March 2019 International Research and Innovation Strategy talks of ‘wanting to explore’ Association; at the 23rd October Commons Science and Technology Committee hearing, the then-Science Minister expressed his ‘clear preference’ for Association, while his 9th October speech talks only of not being able to engage properly until both Brexit and the Horizon Europe arrangements are ‘finalised’. And last week’s Smith / Reid Review manages ‘If the government decides not to Associate...’, ‘If the UK does not Associate...’ and ‘Whether or not the UK Associates...’ as the starts of three out of the first six paragraphs of its executive summary. Coupled with the BEIS cover gloss on the Smith / Reid Review noting only that the government ‘will seek to maintain a close relationship’ with Europe on research and innovation, the overall picture is rather vacillating and hardly gives the sense of the UK taking a leadership role in international innovation collaboration.

A key cause of the reticence seems to be some of the specific emerging terms of Horizon Europe, such as whether it continues an exclusive focus on excellence rather than on rebalancing, and on the UK’s ability to ‘secure a suitable level of influence on the programme’ if it leaves the EU.

Although clearly - as Horizon Europe develops - some decisions would favour the UK’s innovation system while others might be less favourable, it remains the UK’s best opportunity to continue building on 40 years of connections and large-scale collaboration with close international neighbours . We recommend the government gets off the fence and commits explicitly to continuing the UK’s central role in Horizon Europe if we remain, and to Associate membership (which the EU could technically refuse but would be highly unlikely to) if we leave.

An innovation-friendly visa and immigration system

The March 2019 UK International Research and Innovation Strategy places front and centre the UK’s role and ability to ‘bring together talent’ in science and innovation. But then it only makes one mention of the visa and immigration system’s role in this, noting that the UK is ‘ensuring our visa arrangements support international researchers, innovators, their teams and their families’. But as UKRI chair Sir John Kingman has noted in relation to the 2.4% R&D target, ‘50% more research will require 50% more researchers’. Although research intensity isn’t perfectly correlated with researcher numbers, clearly such a vast increase in funding will need to be absorbed by a broadly commensurate increase in human capacity to research, particularly researchers based in industry.

A UKRI roundtable I attended on the 2.4% target and international innovation late last year saw experts consistently focusing on the visa and immigration regime as a clear barrier to the UK’s global innovation potential, including the ‘signalling’ effects to globally-mobile innovators regarding the UK as a desirable hub - or otherwise.

In a similar vein, government has frequently said that it wants to make the UK the best place in the world for startups. However, as our Digital City Index illustrated, the cost and availability of technical talent in the UK are problems for many young firms, and cited by many scaleups as key constraints for growth.

So while recently announced changes to visa rules are welcome and a step in the right direction - including a ‘fast track scheme for top scientists and researchers’ which removes the cap on numbers under the Tier 1 Exceptional Talent Visas and ensure dependents have full access to the labour market - that announcement is in the context of seemingly almost weekly news stories of academics and innovators being deported or separated from their families, or senior global experts being denied access to the UK even while the UK was paying for them to come share that expertise.

We recommend - particularly in the face of Brexit uncertainty - that the government pushes more explicitly for an innovation-friendly visa and immigration regime. This would include not only important specific changes to immigration rules, but also steps to reverse the ‘hostile environment’ broader messaging. In fact a more explicit campaign to position the UK as open to innovation should be undertaken - but one where the underlying experience of innovators engaging with the UK matches the messaging.


Benjamin Reid

Benjamin Reid

Benjamin Reid

Head of International Innovation - Development Programmes

Benjamin was head of the International Innovation team within Nesta's Policy and Research division.

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