Newly funded Council of Expert led projects

This research project aims to analyse the role and impact of state subsidies on the UK economy, focusing specifically on innovation and firm performance from 2021 to 2023. In recent years, UK government subsidies have grown significantly in the UK, especially after Brexit, with debates on their necessity continuing. The project will map the landscape of UK subsidies, assess their distribution across sectors, regions, and firm characteristics, and investigate their short-term impact on innovation, productivity, and internationalisation. Using a novel dataset that combines financial and innovation data, and a battery of machine learning and econometric methods, it will evaluate the subsidy allocation and effectiveness. The findings will guide policy development, shedding light on how public funds support private R&D and inform future interventions. This study also aims to fill gaps in understanding subsidies’ role in the UK, offering insights into the broader debate on industrial policy and state intervention.

Project team: Professor Jun Du, Xingyi Liu, Michail Karoglou and Professor Sourafel Girma

This project aims to understand what role Innovate UK (IUK) funding has had on the development and growth of AI new ventures in the UK. We leverage unique data from an ESRC funded project that has developed a comprehensive dataset of all UK AI new ventures founded since 2000 combined with IUK internal records.

This project’s goal is to cover the whole innovation funding lifecycle, focusing on three main areas:

1. The selection into application: why certain AI new ventures apply for IUK funding and others do not.
2. The assessment of the applications: whether rejection discourages re-applications and how applying for IUK funding affects future outcomes.
3. The effects of funding: What is the causal impact of IUK funding on non-traditional measures of firms’ outcomes, including the scientific and innovation output, use of its open-source code, and the likelihood of securing additional venture funding.

Project team: Professor Ammon Salter, Dr Federico Bignone and Stefano Baruffaldi

The UK must ensure a reliable supply of critical minerals, such as lithium, to meet net zero commitments. The UK is currently reliant on sourcing such materials globally, but there is the possibility to “onshore” critical mineral extraction and refining, building on a rich history of mining, whilst respecting social, environmental and cultural assets.

The technical challenges of building the UK’s capability in this vital area are well understood, but the other elements of a healthy innovation ecosystem for critical minerals are missing. This project supports existing industry and new investment in UK critical minerals and metals by improving understanding of the non-technical challenges and opportunities (legal, social and environmental) and how to respond to those challenges. The research gathers data from the firms trying to create the innovation ecosystem we need and offers a framework to help this important sector work in harmony with local communities and the environment.

Project team: Professor Alice Owen, Dr Laura Smith,Dr James van Alstine and Dr Taija Torvela

The main objective of the project is to explore the new era of central-local relations in innovation policy following the election of a Labour Government. In summary terms, it consists of three empirical components: (i) mapping the new macro policy context for devolution, innovation and regional economic development; (ii) assessing city-regional strategies in the new place-based innovation policy mix, which consists of the traditional Science + Technology model (eg triple helix arrangements in university-industry partnerships, cluster building, startups and scaleups etc) and the emerging Social Innovation model (eg new heterodox challenge-led experiments in community wealth building and foundational economy initiatives etc); and (iii) the new roles that universities are beginning to play in brokering and convening place-based partnerships in the new innovation policy mix. In principle the two models are complementary, but in practice they can trigger tensions within city regional partnerships given their different constituencies and metrics (Morgan and Henderson, 2023).

Project team: Professor Kevin Morgan, Professor Rick Rick Delbridge, Dr Katherine Parsons, Professor Elvira Uyarra and Dr David Waite

This project aims to provide novel evidence on the role played by public R&D grants in supporting regional technological development, reflecting the diffusion of knowledge and the branching into new technological specialisations across regions.

The project will match data on UKRI funded collaborative R&D and innovation projects with measures of technological innovation output, proxied by patent data, using machine learning techniques. First, we will estimate the direct effects of public R&D funding in supporting regional technological development. Secondly, we will identify indirect effects generated by collaborative networks, which are stimulated by exchange of knowledge between a wider set of partners, including private businesses and public research institutions located in different regions of the UK.

Findings from the study will provide important insights for innovation policies to support a more equal diffusion of innovation and spur long-term development across regions.

Project team: Dr Enrico Vanino and Professor Carlo Corradini

Rural businesses account for 23% of businesses in England (Defra, 2024) but are often neglected in the innovation research and policy agenda, with rural areas often considered inferior to cities in bringing about innovation. However, the effect of rurality on firm-level innovation – which includes “improved or new types of production and processes, business models or innovations that are not uniquely profit-driven” (OECD, 2023, p.14) – remains a matter for debate, with the evidence base mixed and incomplete.

This project therefore seeks to fill an evidence gap regarding innovation in UK rural economies. First, we examine profiles of rural innovators and how they move from being non-innovators to being innovators. Second, we seek to understand the effect of rurality on innovation adoption and invention by exploring the enabling and inhibiting factors from firms’ internal and external environment. Third, we investigate the outcomes of innovation on firms’ performance. Throughout the process, we will also draw a comparison with urban firms and identify the implications for innovation support strategies and actions.

Project team: Professor Jeremy Phillipson, Dr Thao Nguyen, Natalie Partridge and Professor Matthew Gorton

This project explores how UK businesses can increase their involvement in setting global technology standards – such as 5G and IoT standards – in key fields like artificial intelligence, semiconductors and future telecommunications. These standards are vital as they help companies adopt new technologies, ensure compatibility, reduce risks, gain market access and remain competitive in global markets. However, UK businesses are less involved in developing these standards than their US and Chinese counterparts. The project has two main objectives: first, to understand how participating in standards-setting benefits UK companies, and second, to explore why fewer UK companies engage in this process and the enablers for greater participation. By learning from successful strategies in other countries, we aim to help UK businesses play a more active role in setting technology standards, strengthening the UK’s position in global production and innovation networks and ultimately supporting its long-term technological leadership in these strategically important areas.

Project team: Professor Cher Li, Dr John Moffat and Dr Xin Deng

Innovation involves turning new technologies and ideas into commercially viable products and services. Firms who develop and adopt such technologies and ideas, often find this part of innovation difficult. Hence, special organisations, called Innovation Support Organisations (ISOs), are sometimes needed to bridge this gap. We think that many ISOs concentrate on the development of the technology without also developing or making the markets that enable adoption to be successfully scaled. It is only when technologies and ideas are adopted at scale that they can significantly affect productivity and growth.

Using theories about market-making, this study examines different forms of ISO (including catapults, incubators and accelerators), to see how they might better be able to support the development of markets for the technological innovations they are supporting. It will advise the bodies who fund ISOs (e.g. UKRI) on how to adapt existing ones and to establish new ones that are more effective.

Project team: Professor Katy Mason, Professor Martin Spring, Nicole Bulawa and Dr Francine Morris

Innovation is central to the UK’s future economic growth through its impact on productivity growth. It is associated with better quality jobs, a richer and more diverse range of new products and services, superior internal processes, and resilience in supply-chains. It follows that creating an environment in which more firms are innovative and more innovation is successful will have far wider impacts on the economy by strengthening the UK’s global competitiveness.

This research will provide detailed insights into the full life-cycle of equity backed firms from immediately prior to their initial funding round onwards and establish how equity funding is initially attracted to innovative firms and how subsequent equity funding acts to enhance further innovation, growth, and productivity. It will also explore the impact of different types of equity funding (including Government VC) and identify when in a firm’s innovation life-cycle different types of equity serve the innovative firm best.

Project team: Professor Marc Cowling and Professor Nick Wilson