Professor Elvira Uyarra reflects on the importance of place for regional development.
Editor CAROLINE PAIGE
Elvira Uyarra arrived in England twenty years ago. She was a PhD student keen to enjoy the Manchester music scene. Travelling frequently between Manchester and Spain she didn’t know then that the UK would become her home. The place she’d spend a career pursuing innovation that creates real and sustainable change.
Elvira dedicated this lecture to Jaime del Castillo. Her PhD supervisor and Professor of Applied Economics at the University of the Basque Country, who passed away in the summer. She credits him with her passion for engaged scholarship. Ensuring academic work aims to make a difference and contributes to better policies. Jaime inspired her to see innovation – not as the preserve of regions with access to leading technology – as something ordinary places can do to overcome economic stagnation and decline.
The Basque Country: an example of economic and social transformation
Elvira’s home city, Bilbao, is in the Basque Country region of Spain. In her childhood it was as “a terribly polluted, dirty and grim city blighted by terrorism.” It was an area of old, heavy industry and one of the most polluted in northern Spain. But – thanks to huge political will and over €1 billion in investment – it’s now an economic and cultural centre. Bilbao is a popular case study for urban renewal. And it has shaped ideas about innovation and regional development.
In the late eighties, academics became interested in the decentralisation of old industrial regions such as the Basque Country. And the new institutions for regional development that helped them out of recession. Their research informed new ideas about regional innovation. Systems with strong regional institutions and sufficient autonomy for industrial and economic resilience. Basque scholars led a new generation of European place-based innovation policies. Their work still influences the smart specialisation (place-based) strategies used today.
Manchester: the innovation factory
Elvira chose The University of Manchester because of its reputation for innovation studies. Manchester academics were creating new approaches to science and technology policy. They were creating policy rationales with an evolutionary understanding of innovation. And they were linking those to ideas about national innovation systems.
Elvira wanted to explore the links between evolutionary innovation, regional and policy studies. And how they informed practice for regional innovation policy. She found little connection between policy theory underpinned by research and actual policymaking. Instead: “Policymakers use theory in a selective way to justify policy action. Policy choices are influenced by norms, beliefs, goals and pressures that differ from those in the academic community.”
Changing policy rationales
The most noticeable shift in policy rationale is towards addressing societal change. Policies aiming to address climate change and inequalities. Elvira explains that there’s an acknowledgement that innovation shouldn’t be the policy goal. Instead, it should be the means to reach a goal. That means measuring not only the rate of innovation, but also how much closer that innovation takes us to our goals. She tells us previous rationales based on market failures are insufficient to tackle complex policy challenges faced today.
This new framing of innovation policy (as challenge-driven) focuses on shaping rather than fixing markets. And on changing sociotechnical systems (between people and technology) to deliver more sustainable outcomes. Here, rationales for intervention are failures preventing system transformation. Those failures could be a lack of demand articulation or policy mix coordination.
The realm of policy innovation
As the realm of policy innovation grew, it became more cross-sectoral (involving sectors such as energy or education). This raised questions about boundaries and ownership. It also required new policy instruments such as regulation and public procurement.
Elvira highlights the work of Manchester University academics in this area. The work of Luke Georghiou and Jakob Edler has influenced governments to procure better. And to procure better things. Things that contribute to innovation in vital government functions and enhance innovation capacity and competitiveness. Elvira tells us that UK public procurement accounts for 16% of GDP (or £3 million). That has “enormous potential to influence the size, the sophistication and the direction of demand for innovation. For instance, driving the development and adoption of green technologies.”
Policy mix and policy coordination
First coined by economists, the term “policy mix” is now used in relation to energy policy, political science, sustainability transition and innovation policy. These mixes of policies must work in a consistent and credible way. This must be considered if we want them to meet their intended outcomes.
But UK policy suffers from:
“a lack of long-term approach, the fragmented nature of interventions, poor implementation and tendency to chop and change institutions. This doesn’t generate the industry confidence required to stimulate productive investment … [We] need to pay attention to the messiness of policy implementation. In our work, we’ve discussed the difficulties of conscious or deliberate policy mix design. But also the dangers of adopting a technocratic, top-down and place-blind approach to solving societal changes.”
Elvira explains that societal challenges (such as climate change and inequalities) differ in nature from technological missions of the past. They “can’t be solved with a centralised moonshot approach.” Richard Nelson’s book, The Moon and the Ghetto, questioned how it was possible that a country put a man on the moon, but couldn’t provide an effective education for kids living in deprived neighbourhoods affected by drug-related crime. It “begs a question of legitimacy and representation – who decides the missions and how?”
She tells us that societal challenges are also less likely to need technological development:
“They need a more mundane diffusion of adoption of existing technologies and innovations of a different nature (institutional, social or business model innovations). And yet, there seems to be a technocratic or ‘solutionist’ bias to a lot of mission-oriented innovation policy thinking. This places the emphasis on promising technological solutions at the expense of more deeply understanding the problem, its causes and consequences. Tackling these problems requires a humble, more experimental and less technocratic approach to policy … And an appreciation for the need to involve actors with a diverse set of ideas, values and experiences in collective problem-solving. This means a more inclusive and bottom up rather than top-down approach.”
The role of cities and regions in innovation
Elvira believes there’s a problematic “big science for big problems” bias. And we can find it in much of the new generation innovation policy thinking. It assumes societal challenges are best dealt with at national or supranational level. It assumes that’s where the right levers, structures, resources and competences are.
“One big problem with this solution is it excludes most people and places. It concentrates decision-making and investment in a small number of technologies, firms and locations … Even when they claim to be space neutral, innovation policies are never neutral in practice and inevitably favour some sectors and localities over others. This concentration not only increases territorial disparities, but also reduces variety of innovation. This leads to, at best, underutilising the potential of many innovative firms, people and places. And, at worst, to locking them into a vicious cycle of underdevelopment.”
In the UK, like other countries, this has resulted in worsened regional inequalities. It has created economic, social and political instability. It overlooks the untapped potential in many regions. And the importance of place as a platform for experimentation and problem-solving. Elvira explains that we need implementers “on the ground”. Those with local knowledge to better understand the problem and capability of resources to answer them.
“Global challenges play out in places. Solutions may face strong resistance if they’re not place-sensitive and rooted in a close understanding of the specific localised context in which they’re introduced. In the UK, policies are often siloed and insensitive to place. Actors on the ground are expected to deliver on a number of policy agendas that aren’t joined up – typically with few resources and limited capacity. It’s amazing how places like Greater Manchester drive policy despite the relative lack of policy levers and resources. This mismatch, between national policy making and place-based capacity for innovation, needs addressing for the UK to make real progress on ‘levelling up’.”
Elvira calls for the adoption of more progressive innovation policies. She feels societal challenges faced by people and places in the UK and Europe would be better served by a place-based approach driving innovation and economic resilience. Policies would be attuned to the differing contexts of regional strengths. Rather than imposing a centralised, one-size-fits-all approach. The European Commission’s Smart Specialisation demonstrates place-based innovation policies in action. And they’re now informing approaches to net zero challenges.
This implies innovation isn’t about high-tech sectors. It suggests regions leverage strengths including cultural, natural, institutional and civic assets. Place-specific challenges can provide opportunity for entrepreneurial innovation. But regions aren’t always aware of key assets that form part of their civic and social infrastructure.
“We must recognise that there’s a geography of problems that’s different to the geography of innovation (solutions). And that these regional problems – often more mundane or foundational – can be used creatively to encourage adoption of emerging technologies.”
The role of cities and regions in innovation
Elvira’s work focuses on improving connection between research institutions and policymakers. The Manchester Institute of Innovation Research (MIOIR) is working with the Greater Manchester Combined Authority. They’re documenting examples of regions using place-based innovation policies. The study shows foundational sectors, such as housing, can serve as large target markets for emerging technologies. For instance, Elvira tells us about Vector Homes. It’s a Manchester clean-tech start-up. It aims to produce sustainable modular homes using nanomaterial technologies such as graphene. The success of projects like these highlights the need for a broader repertoire of policy levers. As well as greater attention to demand-side policy tools.
Elvira also tells us about a study looking at policies in the Galicia region in Spain. The local government surveyed its departments asking for problems and needs that could demonstrate the application of UAV (drone-based) solutions. These were solutions such as fire prevention, control of fisheries and coastal surveillance. They used demand-side tools (such as public procurement and regulation) in a smart way. They attracted inward investment and anchored it to place. They used the knowledge and capabilities of multinational enterprises to upgrade and diversify the regional innovation ecosystem.
Place-based leadership
Place-based innovation policies need place-based leadership. That requires adequate resources and legitimacy to enact change.
“It also involves leveraging and coordinating the strengths, relations and civic character of anchor institutions – especially universities. As they can play a significant role as conveners and curators of innovation processes at the local level.”
MIOIR is collaborating with the University of Birmingham and Connected Places Catapult. Together, they’re setting up an innovation procurement competence centre. It will empower local authorities to use these levers more effectively.
To sum up, Elvira wants us to move towards innovation and industrial policy that’s more place-based, more connected and more challenge-driven.
Professor Elvira Uyarra Professor of Innovation Studies, IMP Innovation, Strategy and Sustainability
Elvira is Professor of Innovation Studies at Alliance Manchester Business School (University of Manchester) and Executive Director of the Manchester Institute of Innovation Research. She’s also adjunct professor at the Mohn Centre of Innovation and Regional Development at the University of Western Norway. And a visiting fellow at the Centre for Innovation Management Research at the University of London.
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