New week; new Prime Minister. This time it’s Rishi Sunak’s turn.
Back in February I wrote here about Sunak’s Mais Lecture: Capital. People. Ideas. I was cautiously optimistic about his priorities then, and as Eamonn Ives, our head of research argues in an article this week, perhaps we can afford a note of optimism that he wants to “make Britain a science and technology superpower”. To achieve this he vowed, among other things, to increase the amount of lab space available, ensure we have access to the best talent, and improve and speed up the research grant process.
We have solutions for all three.
Becoming a science superpower will be impossible without adequate lab space. As reported in FT Sifted, a lack of lab space is holding back Britain’s biotech founders. “We are at risk of losing some of these companies to the states or to Europe, if there’s nowhere to actually put them,” explains Jacob Nathan, founder of Epoch Biodesign which recently raised an $11m seed round.
We identified this problem a while ago, with Aria Babu, our head of policy, writing in Strong Foundations on the impact of planning policy on entrepreneurship (which politicians should be read and heed as a clarion call):
“We seriously lack lab space, and analysis of planning data shows there are few plans to build more. To put this scarcity into perspective, according to Savills, London has only 90,000 sq ft of available lab space, while Manchester has 360,000 sq ft available. By contrast, New York has 1.36 million sq ft available. The current trend is for research teams to custom install their own lab space into generic office buildings. But labs often need bespoke design, e.g. higher ceilings to allow for fume hoods, ventilation systems, or an unusual layout of corridors. For example, ‘dirty corridors’ between labs mean that researchers do not need to ‘gown-up’ and ‘gown-down’ as they do when they’re working out of a traditional office building.”
When it comes to ensuring we have the talent to be a science superpower, we have an idea that is as close as you get to a silver bullet: expand the High Potential Individual (HPI) visa. With Immigration hawk Suella Braverman back in the Home Office, any calls for reforms to immigration are going to have to be carefully crafted. As such, now is the time to push through this hyper-targeted liberalisation to ensure entrepreneurs can access the talent they’re crying out for and the best scientists in the world can move here with ease. I’m quietly optimistic. After all, Sunak’s a fan of quoting our finding that half of our fast growing companies have an immigrant founder.
Yesterday we hosted a roundtable with Lord Clement-Jones CBE and some of the UK’s leading AI entrepreneurs. It covered a lot of ground, including the challenges of grant funding. One thing was clear – bureaucracy and delays are hindering our best entrepreneurs. The same goes for R&D Tax Credits.
As set out in the Way of the Future, we need novel funding mechanisms and a bigger appetite for risk and experimentation. Speeding up the delivery of funds is about putting more resources into fighting fraud. The relative cost is minuscule compared to the at least £132m burden being foisted on businesses by delays.
Sunak won’t have a lot of time before the election, but if he gets his priorities right, win or lose, he could leave a lasting legacy.
Import of Exporting
I’ve never been convinced by many of the policy ideas put forward over the years on how to support exporting. In part, this is because they're usually framed in mercantilist terms, despite Adam Smith teaching us otherwise, and in part because they’re weak on academic or real-world evidence.
But there may be room for high-quality interventions. After all, companies that export are typically more productive than those that don’t – around 20% more – and the academic evidence suggests this isn’t just because more productive firms are more likely to be exporters. Exporting makes firms more productive.
So where should the government focus its limited resources? Our friends at the Enterprise Research Centre shed a bit more light on this, recently putting out a report showing that the benefits of innovation support measures to stimulate exporting are greatest for firms that already have a technological advantage in the UK: “This suggests that identifying companies which are domestic market leaders but not exporting and targeting these firms for export support may create the greatest productivity improvements through greater and faster returns on their innovations.”
This may not matter as much when looking at exporting into less developed markets, where less radical innovations can still be novel. Something that’s particularly relevant given Conservative governments’ post-Brexit trade strategy and a Brexit-voting Prime Minister.
The report also finds that smaller firms may be in a better position to translate lessons from export markets into innovations, or at least benefit more from those lessons, and that export promotion policies would be most cost-effective if they encourage sustained engagements with export markets.
We’re looking to inject some economically sound ideas into this policy area, working with Enterprise Nation as part of our Access All Areas project. To that end, on Wednesday lunchtime we will host a virtual roundtable on this topic. If you have views about exporting, it would be great if you could join us (we may even use you as a case study in the report).
Not Rocket Science