Do UK Research and Collaborations in R&I Promote Economic Prosperity and Levelling-up? An analysis of UKRI funding between 2004-2021

Executive Summary

Motivation

During the last decades, research and innovation (R&I) public funding schemes have been crucial for driving economic prosperity and development. Among other objectives, such as premium research excellence, R&I funding encourages establishing research partnerships to increase the value for money by benefiting from the synergies and potential multiplicative effects of supporting R&I in a multidisciplinary context. Apart from allowing complementarities between public and private sectors, R&I partnerships can also be instrumental for a more balanced spatial distribution of public research funding. R&I partnerships can also contribute to levelling up local innovation and research across space to ensure more spatially balanced economic prosperity.

Research objective

• We analyse the impact of public funding on research-related investments in the UK and its contribution to regional development and interregional convergence.
• Our project attempts to understand if UK Research and Innovation (UKRI) funding schemes have promoted levelling-up by providing a more balanced spatial distribution of funding over time and the contribution to regional prosperity (measured by GDP per capita) and levelling up (reduction in regional economic divergence).

Data and Methodology

• We analyse the repository of UKRI funded projects between 2004 and 2021. Our database incorporates all collaborative research and development (R&D), feasibility, smart and innovation voucher grants, and Knowledge Transfer Partnerships granted to UK ITL2 regions.
• The number of publicly funded R&D&I projects in the UK has grown steadily during the last decades. Government R&D spending in the UK is currently highly concentrated in those parts of the country that are already more prosperous (Greater South East).
• With social network analysis (SNA) techniques, we create a database of R&D&I partnership collaborations supported by publicly funded projects granted to the UK 41 ITL2 areas, including information on partnership composition, partnership leadership, project type, and university involvement.
• We implement a novel methodology, multilevel-mediation modelling, that enables us to identify direct and indirect effects between publicly funded R&D collaboration, economic prosperity and levelling up.
• Our methodology allows us to measure the potential mediation effect of private sector R&D (measured as Business Research and Development, BERD) in explaining the effects of publicly funded R&D collaborations on regional growth and levelling up.

Results and Discussion

• We demonstrate that publicly-supported R&D leverages regional private R&D (BERD) in the UK, and this relationship differs between regions.
• Our results support the argument that knowledge collaborations have a positive effect on regional economic prosperity, and this effect is moderated by the effect of regional business R&D. Interregional collaboration appears to be the main contributor to economic prosperity over other types of regional collaborations (intraregional collaboration, public-private collaboration or university-industry collaboration).
• We have been able to capture the intended effects of UKRI public support policy programme (increase in private R&D) measured as the positive effects of public support for R&D&I (and collaboration) on regional business R&D.
• Our analysis provides some interesting insights about the unintended effects (promoting regional development and convergence) of these programmes. UKRI public support policy programmes do contribute to increasing regional economic prosperity in certain regions. However, our results only provide weak support to conclude that UKRI public support may have contributed to reducing regional economic prosperity differences in the UK (levelling up).

Authors Raquel Ortega-Argilés, Pei-Yu Yuan