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Consultation Response | Industrial Strategy Department of Business, Energy and Industrial Strategy

industrial strategy

Industrial Strategy Green Paper Consultation

A response from Don Spalinger, Director, Research & Innovation Services
University of Southampton | April 2017
 
Read the call for evidenceDownload the response

Written evidence submitted by Don Spalinger, Director, Research & Innovation Services

This response to the Industrial Strategy from the University of Southampton is divided into the major chapters/Pillars of the document. The red numbers at the beginning of each paragraph reference the ‘Questions for Consultation’ which we believe is most relevant.

Summary

• (Q1) The University of Southampton whole heartedly embraces the Industrial Strategy’s foundation being the UK’s globally recognized science base. The University of Southampton is recognized for its innovation along with its research and teaching excellence. Therefore, as a leading organisation we accept the responsibility to drive the industrial strategy to accomplish its challenges:
o Build on our strengths and extend excellence into the future,
o Ensure that every place meets its potential,
o Make the UK one of the most competitive places in the world to start and to grow a business.

• (Q1) The University of Southampton has an annual turnover of £556 million, employs 6,000 full time equivalent staff, and has a full-time student population of 23,500, making us a significant contributor to the economy of the City of Southampton and the local region. In 2015/16 the University generated £2.4 billion GVA for the UK economy and supported 31,150 jobs, which included:
o £1.1 billion GVA and 17,500 jobs in the local region;
o £837 million GVA and 13,600 jobs in Southampton;
o Our economic impact has seem a double digit increase in the past 3 years.

• (Q3) As a local leader and major contributor to our local and regional communities, the University of Southampton brings together key stakeholders at city, regional and national level, as well as, drawing on much wider international networks. We therefore act as a
coordinating hub where all pillars of the industrial strategy can be brought together and actioned.

• (Q3) As the Industrial Strategy highlights, the UK is a world leader in education and UK universities are a premier destination for overseas students. Total UK educations exports are well over £20 billion per year, making higher education the fifth largest export sector in the UK, ahead of both insurance services and ICT services. Thus UK universities must be viewed as a major industrial sector with respect to the Industrial Strategy.

Pillar 1: Investing in Science, Research & Innovation

• (Q5) The Government’s commitment to provide an additional £4.7 billion of funding by 2020-21 will contribute greatly to ensuring that our research continues to be world class, but it should also incentivise all UK organisations to increase their level of investment in their R&D. The University of Southampton along with the CBI want to see the UK’s investment in research and innovation increased from the current 1.7% of GDP to 3%.

• (Q5) Increased R&D investment by Government and businesses will enable greater collaboration between businesses and universities. The University of Southampton has for many years been a leader in business-university collaboration. Our collaboration with Lloyd’s Register (LR), has resulted in LR relocating hundreds of its engineers to our Boldrewood Campus. Our recently announced strategic relationship with BAE Systems also exemplifies our close relationships with large commercial organisations. Our top HEBCIS ranking on collaboration with SMEs demonstrates that we collaborate with organisations of all sizes.

• (Q8) We also endorse the announcement in the Budget to fund an additional 1000 PhDs. As the Industrial Strategy states, “today’s PhD students are often tomorrow’s research leaders, entrepreneurs and industrial researchers”.

• (Q7&8) The Green Paper specifically notes that innovation requires the commercialisation of the UK’s strong research base. The University of Southampton in conjunction with the SETsquared Partnership has demonstrated how this process can be turbo-charged with the ICURe (Innovation and Commercialisation of University Research) program that we have been executing over the past two years. The ICURe program takes researchers (generally recent PhDs) out of their laboratories and into the marketplace in order to validate that their research results do have commercial viability. Having worked with 100 research teams from 30 different universities across the UK, 35 new spin-out companies have been formed, and they have already raised £30 million of funding to commercialise their research. These teams have engaged with over 6,000 businesses around the world and over 50 technology licenses have been or are being negotiated with industry. The ICURe program has enabled many young researchers to also now be innovators.

• (Q7&8) While the ICURe program is providing a key step in the commercialisation of research undertaken within the universities, incubation of the start-up companies is the next step in this critical chain. The SETsquared Incubation /Business Acceleration Centres, are ranked as the best university incubators in the world by UBI. There is a SETsquared Incubator at the University of Southampton, and each of the partner universities (Surrey, Bath, Bristol, and Exeter) also have one. In our efforts to broaden the reach and impact of our Globally #1 Business Incubators, we are establishing Business Acceleration Hubs in other locations, with Basingstoke and Penryn now operational. The SETsquared Business Accelerators not only work with spin-out companies from the universities, but also with “spin-in” companies in the communities, thus coupling the universities with local and regional companies. The SETsquared Business Accelerators continue to work with companies through the ‘scale-up’ phase of their growth. SETsquared recently highlighted the scale-up of some key companies by recognizing the “Top 50 at 15”. From the more than 1000 companies that SETsquared has worked with over its 15 year history, the Top 50 were recognized for their growth through the scale-up stage into companies that are making major contributions to the UK economy.

• (Q6) The Industrial Strategy Challenge Fund definitely holds the promise of enabling the UK to capitalise on its research strengths to create the industrial sectors of the future. Priority areas that were investigated in the initial workshops that were conducted by EPSRC and the KTN around the country certainly included some key opportunities, such as clean energy technologies, materials of the future, space technologies, bio-technologies , and quantum technologies. The three initial areas selected for funding - medicine manufacturing, batteries, and robotics & AI - each hold fantastic opportunities. The University of Southampton will be making major contributions to each of these three selected areas as we have substantial research activities generating new IP and research results in each.

• (Q5&6) Artificial intelligence potentially offers the UK the ability to take a global leadership position in a very large emerging sector. The University of Southampton’s Professor Dame Wendy Hall, as part of the Digital Strategy, is leading a major review on how to capitalise on the UK’s status as a world-leader in the science underpinning AI technology.

• (Q8&9) Working with the Solent LEP, we are establishing the Z21 Web Science Innovation Fund. The Web Science Institute at the University of Southampton has been a global leader in the development of Web Science for over 20 years, and is a magnet for attracting the best and brightest students from around the world. The Z21 Innovation Fund will support the post graduate students, post docs and early career researchers to advance the development of web science research activities and early stage commercial initiatives toward commercialisation and angel funding. The Fund will identify the next generation of research leaders and entrepreneurs and provide support to those ideas needing more work to reach commercial viability. The Fund will combine research excellence with entrepreneurial talent to navigate the pathway from idea to impact and invent the future.

• (Q6&9) In 2016, we, along with the Solent LEP, other universities in the region and key regionally based businesses, developed an innovation evidence base which identified smart specialisations that have the greatest potential for generating economic growth in the Solent region.

o The University of Southampton has a 60 year history of research excellence and commercialisation in Photonics. Our research has led to the creation of a new business sector in fibre laser and amplifier technology and manufacturing, which is generating billions for the economy in diverse fields of communications, high value manufacturing, medical devices, space applications, aerospace and defence.
o The aerospace and defence sector has always had a focus in the region, and the University has made major contributions to the sector in areas such as reduced noise and vibration of aircraft, airframe design and fabrication, automated systems and controls, space craft and systems, communications, and cyber security. As the UK is the second largest supplier to this global sector, further investment in science and innovation will maintain that position and provide for significant future economic growth.
o The region has a rapidly expanding digital cluster with the Solent having one of the highest location quotients in the UK. Further investment in our digital cluster will expand our global market position. The Z21 Innovation Fund is an example of our focus on future growth in Web Science and the broader Big Data arena.

• (Q7&9) The University of Southampton is a driving member in the Innovation South consortium currently engaged in the Wave 2 of Science and Innovation Audits. The Innovation South region encompasses the Solent in a region that goes along the South Coast from Dorset in the West to Kent in the East and from the English Channel in the South to the M4/M25/Thames in the North. The Innovation South region accounts for over 55% of all digital sector employment in the UK. Therefore as the Innovation South Science and Innovation Audit progresses, it will dramatically expand on the evidence base already compiled in the Solent to show that this expanded region holds the greatest potential within the UK for significant economic expansion in emerging sectors where the UK can be globally leading.

• (Q6) Being on the South Coast where a significant amount of the UK’s marine and maritime sector is located, we would like to see the marine and maritime technologies be a priority area in the Industrial Strategy Challenge Fund, particularly marine renewables, such as tidal and wave, and marine intelligent systems, which is a rapidly developing industry where the UK already has a globally significant position.

• (Q6&7) Fibre composite materials are positioned to continue expansion into a very large and technologically-based industrial sector, particularly as they are finding broader use in large structures, such as airplanes, boats/ships, bridges, oil and gas pipes, rail carriages, commercial building structures, large scales natural gas storage, etc. A key to this industrial sector expansion are changes to the regulatory environment for composite materials in these applications. Assistance by multiple Government Departments will be essential to deal with these regulatory issues.

• (Q7) Predicting the exact benefits of individual research activities and the role of serendipity in scientific discoveries is virtually impossible. It is critical therefore that there is sustained investment in fundamental blue-sky research to allow ground-breaking innovation to occur. Quality-related (QR) research funding supports strategic thinking and provides us with flexibility to deploy resources into new research areas. QR complements challenge-based approaches to research funding by ensuring there is a sustainable pipeline of new ideas in areas which may not have emerged as global challenges. QR has historically been a facilitator of university-business collaborations, and therefore must be continued.

• (Q7&9) It is important to ensure that the funding associated with the Industrial Strategy is focused on supporting UK-based companies to develop genuine competitive advantages. This does not generally arise from supporting failing companies, with non-competitive technology bases and non-competitive practices. The Industrial Strategy must be focused on identifying and nurturing science and technologies which are world-leading and companies which are prepared to compete globally. The same applies to funding research conducted at universities and its translation to economic and societal impact. In an increasingly globally competitive research environment, only the strongest will prosper. Previous industrial strategies have failed because they have not had a sufficiently ruthless focus.

Pillar 2: Developing Skills

• (Q10&13) The University of Southampton is a research-led university and, and a member of the Russell Group. We draw upon our research and collaborations with industry to provide our students with the quality education that is envied around the world, and that equips them to be productive employees in our rapidly changing technological world.

• (Q10&13) Teaching costs for STEM subjects are higher than other subjects because of the need for laboratories, equipment and hands-on experience in the field. The developed skills that these enable are highly valued by employers. Tuition fee income alone does not cover these higher costs. Funding bodies must make long-term commitments to boost and maintain funding levels needed for this high-level skills pipeline.

• (Q10&11) We also note that schools and colleges providing R-13 education are not sufficiently well supported to ensure that the work force of the future are sufficiently well equipped with the fundamentals of science and mathematics, as well as, the language skills to engage globally. A key element of this is ensuring that an appropriate fraction of high quality science, mathematics and language graduates are encouraged to become teachers in primary and secondary education.

• (Q10&14) The University works closely with many employers and business collaborators to ensure courses are targeted to their business needs.

Pillar 3: Upgrading Infrastructure

• (Q17) The University of Southampton supports the Government proposal to develop an R&D capital spending roadmap to provide the modern infrastructure to support research activities across the UK. It will be important to ensure sustainable funding for the on-going resource costs associated with operating, maintaining and upgrading world-class capital facilities, as without these, large-scale capital programmes will not be viable in the long-term. Having a resource element tied to the original capital investment to ensure facilities and equipment can operate to full capacity for the long-term would be required.

• (Q17) UK universities, such as ours, currently have access to large-scale infrastructures supported by the EU, and these underpin many large, complex and collaborative research projects, adding to the UK’s competitiveness. The Government should endeavour to secure continued access to EU research infrastructures. European Structural and Investment Funds (ESIF) also support the construction of research infrastructure in the UK. Clarity on the replacement of ESIF at the national level once the UK leaves the EU is urgently needed.

• (Q16&17) The University of Southampton is home to the National Infrastructure Lab which is a significant part of the UKCRIC (UK Collaboratorium for Research on Infrastructure and Cities) which will be providing capabilities needed for rail, road, power and other infrastructure in the future. The Industrial Strategy should incorporate how good practice developed by this collaboration of universities, Government, local authorities, citizens, commercial policy makers and investors could be shared and built on further.

• (Q16&17) Much of the world’s infrastructure has been built with steel and concrete. New materials such as fibre composites could dramatically improve the structural integrity, the reliability, the longevity, the lifetime costs, while reducing the weight. The University of Southampton in collaboration with the Solent LEP, and manufactures and designers across many diverse sectors are developing plans for the creation of a Large Structures Composites Centre to further the development of processes and techniques for commercial large structure composites. We encourage the Government to support the activity in conjunction with the Industrial Strategy.

• (Q16&17) High quality infrastructure is a crucial factor for improving connectivity across our region (the South of England) and between key cities, and reducing congestion will raise productivity by widening the labour market accessibility and improving the efficiency of supply chains. Improving connections in our local region between the cities of Southampton and Portsmouth will drive growth. Upgrading transport links between the cities of the South Coast to London could provide access to a population of 9 to 10 million.

• (Q16&17) The Solent region has a range of assets of national and international significance, most notable the Port of Southampton, which has taken on increased importance in the drive to increase and diversify UK exporting and connectivity to these assets to optimise their geographic proximity to global trade routes is of critical importance. These key assets will underperform for the UK unless connectivity with rest of the UK is upgraded and enhanced. The Industrial Strategy should reflect new approaches to infrastructure funding, including utilisation of British Wealth Funds and ‘infrastructure supplements’ that may come forward when business rates are devolved to local areas. This alone will not help areas such as the Solent which has suffered from historic underinvestment as there is a case for public intervention to address infrastructure deficits in the area, particularly where they will help to unlock development land for housing and employment.

• (Q16&17) Congestion is a top priority not just for the Solent area, and it should feature in the Industrial Strategy as it has the power to:

o Reduce journey times
o Deliver agglomeration benefits including improving business links and supply chains
o Widen access to a broader range of markets and suppliers
o Improve air quality.

• (Q17) Digital connectivity is extremely important given its unique capability to connect people and goods to new markets locally, regionally, nationally and internationally. Ensuring the digital infrastructure is prepared for the future is pivotal to productivity gains. The University of Southampton is leading the world with its photonics research for super-high speed internet using new configurations of optical fibres. In high speed wireless communications, we, along with the University of Surrey, are leaders in 5G technologies.

Pillar 4: Supporting Businesses to Start and Grow

• (Q21&22) The Industrial Strategy notes that the UK already possesses two key strengths in starting and growing businesses. The UK is a success story on business start-ups, ranking 3rd in the world, and the UK is one of the world’s leading financial centres. The University of Southampton has a long history of coupling these. We had been creating spin-out companies during the second half of the 1900s, but at the beginning of the 21st century, the University undertook several key innovative steps that produced a step change in starting and growing businesses coming out of our research base. Leveraging the modest funding available from the University Challenge Funds, the University along with the universities of Bristol and Bath, created an investment fund to invest in spin-out opportunities from the combined universities. This ‘deal flow’ led to an association with a newly created ‘patient capital’ company now known as the IP Group. The consortium of universities was then further expanded to become the SETsquared Partnership (comprising the Universities of Southampton, Surrey, Bristol, Bath and Exeter) where we have built a very successful commercialisation activity that shares the best practices of the partnership universities. Over its 15 year history, SETsquared has incubated over 1000 companies; assisted those companies to raise over £1 billion of investment, and enabled them to generate £4 billion of GVA for the UK economy. These accomplishments have led to SETsquared being ranked as the Global #1 university business incubator by the respected Swedish independent University Business Incubator Index (UBI). SETsquared has put the UK on the map as the leader in business incubation ahead of competitors in the USA, Asia and Europe.

• (Q22) Start-ups obviously start ‘small’ but inevitably need to scale-up through global channels, and one of the mechanisms that we provide to achieve this next stage of growth is through the SETsquared Open Innovation Programme. This is a challenge-based programme that is focused on a fundamental issue facing both innovators and major businesses: that is, how to build effective, time and cost efficient, and productive interactions between the two communities:

o Innovators are typically time, resource, cash and contact poor. They need to find pathways to reach quickly and easily into key business units of major Corporates, forming rapid and productive dialogues that lead to early agreements on how best to develop and commercialise innovation that meets defined sets of business needs;
o Even the largest global businesses are constrained in the resource they can expend on innovation. Their key challenge is to sort the ‘wheat from the chaff’ and so they are keen to interact with those innovator communities where they have confidence that their corporate objectives and requirements can be effectively addressed. As noted previously it is vital that businesses are only supported where there is the commitment to compete and to grow and a clear understanding of where their competitive advantage lies.

Progress has been very positive:
The Critical Success Factors include:

SETsquared continues to expand this Open Innovation Network, and is embracing more business and universities to engage.

• (Q22) Innovation is enhanced when organisations are co-located in an open and encouraging environment to exchange ideas. The University of Southampton Science Park has been providing such an environment for 100’s of companies. Spin-out companies from the University are located alongside spin-in companies created by local entrepreneurs with divisions of large innovative multinationals located just next door. The University’s SETsquared Incubator/Business Accelerator provides desk spaces for individuals wanting to develop new business and technology ideas to integrate with this innovating environment. Networking events regularly bring all the occupants of the Park together with business support professionals and subject experts. Science parks are not just commercial real estate, but are an innovative state of mind that happens to also have physical buildings. In order to realize the objectives of the Industrial Strategy, more of these environments will be needed. We propose that the Government particularly increase the number of Enterprise Zones across the South of England.

• (Q19,21,22) The Government is to be congratulated on maintaining a tax environment that incentivises investment in innovation and which is the envy of the world – Research and Development Tax Credits, the Seed Enterprise Investment Scheme, and Enterprise Investment Scheme have provided a stable and predictable UK environment that encourages investment and investors in this sector. Private sector initiatives that have developed as a direct result include Crowd funding; S/EIS managed funds and business angel clubs and syndicates. Providing investment stability and certainty is key to unlocking future economic value.

• (Q19,21,22) To further deepen the pool of innovation finance, Government should examine how to amplify the opportunity ‘pipeline’ that programmes like ICURe (further discussed in our Pillar 1 section) provide to the private sector. Creating a spotlight for investors, from around the world, on the merits of investing in UK commercialisation.

• (Q21&22) Removing the current cap on HEIF or raising the allocations to the top performing universities would provide further resources to support business start-up around these key research intensive universities such as the University of Southampton.

• (Q21&22) Creating a ‘proof of concept’ fund to help take research ideas through to commercialisation would also spur further start-up companies. An evaluation commissioned by InnovateUK of proof of concept funding (IP Pragmatics, ‘Review of UK Proof of Concept Support’ September 2015) available to businesses and universities has shown that such funding tends to be fragmented and is not consistently available.

• (Q22) Universities must maintain autonomy to manage their own intellectual property. The successful exploitation of IP is complex and a single, one-size-fits-all approach is not going to be effective or even viable. The University of Southampton looks forward to engaging in the research that the Government is commissioning on the principles and practices on commercialisation and IP.

• (Q21&22) The University of Southampton in collaboration with other universities, local authorities, development organisation in the South of England are awaiting the final ERDF contracts from DCLG in order to expand and enhance our innovation eco-system networks. These innovation networks and innovation support activities will couple fast growing and scaled-up companies with resources in the universities and in their peer businesses.

• (Q22) The University of Southampton along with our SETsquared partners is looking forward to engaging in the upcoming review into entrepreneurship being led by Professor Tim Dafforn. We have developed many well proven concepts and techniques from undergraduate student enterprise activities to research spin-outs to industry generated start-ups which we are eager to share across the UK.

Pillar 5: Improving Procurement

• (Q23&24) Innovation is frequently spurred on when there is a burning market need for a product or service that does not exist. As one of the objectives of the Industrial Strategy is to develop and supply new and innovative global markets, it is very logical that the Government play a major role by being an early adopter of innovative products and services. By their very definition, new and innovative products and services are not ‘tried and proven’, thus requiring that the Government procurement processes be modified to accept a higher level of risk. The University of Southampton collaborates with companies of all sizes in the development of new products and services, and we know that with the Government, as an open and enthusiastic customer, more innovative products would come forth quicker.

• (Q23&24) The University is very supportive of the on-going review being led by David Connell of the UK SBRI programs. The SBIR program in the US has been very successful in both bringing forward innovative products and services, and providing early revenue opportunities for small innovative companies. The success of the US’s SBIR program did not come immediately; it required a lot of persistence and top down commitment from the highest levels, but is now a vital component of that country’s innovation ecosystem. Similar commitment, work and patience will be required to make the UK’s SBRI program a success.

Pillar 6: Encouraging Trade and Inward Investment

• (Q25&26) Higher Education is the UK’s fifth largest service export sector, and the Government should be capitalising on this strength, which will result in a substantial increase in UK global trade. Unfortunately growth in international student numbers is stalling across UK universities on average and numbers of international students from some key markets have even fallen. To maintain the UK’s position in global higher education, Government policies must support the University of Southampton and other UK universities to attract the best students, academics and researchers from around the world. With the Industrial Strategy, the Government must implement a comprehensive communication strategy to promote the message that the UK remains open and welcoming to international students researchers and members of academic staff. This must be supported by minimising visa burdens for students, academics and researchers.

• (Q25&26) It is also important to recognise that the University of Southampton, and other leading UK universities attract some of the best and brightest international students. Many of the students educated in the UK go back to their home countries to become the business and government leaders of the future. The relationships formed while at university tend to last for a lifetime. The University of Southampton has been expanding its activities and collaborations in a number of countries around the world, and many of these activities have been facilitated and encouraged by our alumni in these countries. These international alumni are an important resource for opening opportunities for trade and investment and their value should be appropriately recognised.

• (Q26) Universities are a magnet for inward investment into the UK and their local regions. The University of Southampton with its world beating photonics research activity and cluster of spin-out companies has attracted £100’s of millions of investment into the UK, and the location of several international companies’ photonics divisions into the region. Government encouragement and investment in other globally leading research areas will result in substantial inward investment.

Pillar 7: Delivering Affordable Energy and Clean Growth

• (Q29) The Industrial Strategy aims for the UK to capitalise on its strengths in the energy industries, which will require investment in new technologies and innovations. The University of Southampton and other UK universities are at the cutting edge of clean-tech and energy research working closely with our industry partners. We can help the Government maximise impact by utilising and building on established partnerships. The National Infrastructure Lab on our Boldrewood Campus works with National Grid in the UK and similar organisations in countries around the world. Our Southampton Marine and Maritime Institute is working with a multitude of companies on tidal, wave and offshore wind.

• (Q29) The UK has an almost unprecedented opportunity to move into a globally leading position in the transport sector. Transport is a huge market that due to escalating energy costs and environment factors must reinvent itself over the next few decades. The very visible and successful reinvigoration of the UK automobile industry over the past couple of decades, shows that the UK can take the initiative in integrated transport systems, be they ground, sea or air oriented. The decision to make battery R&D a focal point is important. Further decisions and commitments to focus on areas such as autonomous systems; strong, light-weight materials such as fibre composites; clean, efficient and quiet propulsion systems; and integrated systems for rail, road, air and sea transport will enable UK companies to take and maintain leadership positions on a global scale. Drawing upon the commitments in Pillars 3 and 5 and have the Government develop, trial, and implement these technologies and products on the UK transport and infrastructure networks will be ground breaking. The University of Southampton has strong research activities in many of these critical areas, and is up for the task of working in collaboration with Government and UK businesses to take this leadership position.

• (Q29) The University of Southampton along with other like-minded companies and organisation in have formed Green Tech South and are promoting the development and expansion of clean tech activities including local energy generation in the South of England. The European Secretariate for Cluster Analysis has issued Green Tech South a Bronze Label Award for Cluster Management Excellence (the only one in the UK in Cleantech). In addition, Green Tech South is the only UK member of the International Cleantech Network. The Green Tech South cluster is a focal activity to leverage the extensive clean tech activities to delivery more and cleaner energy for the South of England. Government support of Green Tech South would enable it and other activities in the UK to drive this Pillar’s objectives much faster.

Pillar 8: Cultivating World-leading Sectors

• (Q33) The University of Southampton is taking a proactive leadership role in driving economic development at the local, regional and national level. We are drawing together our strengths in educating graduates, research excellence, driving innovation and collaborating with diverse stakeholders on initiative such as city deals, growth hubs, local growth deals with the LEPs, enterprise zones, and science and innovation audits. A specific request that would greatly assist with these economic development activities would be greater flexibility in the use of Local Growth Fund (LGF) funding by allowing a much greater proportion to be used for revenue expenditure.

• (Q31,32,33) Aerospace and Defence Sector – The UK is globally competitive in this sector, but is continually challenged in continuing to maintain a pipeline of skilled workers and innovative supply chain companies. The University of Southampton has a long history of
contributing to this sector, particularly noting our decades of contributions to the reduction in the noise produced by aircraft and in computational engineering, as well as, emerging capabilities in autonomous systems. We have long and close relationships with key companies such as BAE Systems, Rolls Royce, and Airbus, but of equal importance is our continuous collaboration with the smaller and innovative companies of the sector’s supply chain. The Farnborough Aerospace Consortium (FAC) has for many years been a focal point for these supply chain companies. We are working with the Enterprise M3 LEP, the Solent LEP, the Defence Growth Partnership, FAC, and many other stakeholders in the creating a dynamic Aerospace and Defence Sector Deal.

• (Q31&33) Marine and Maritime Sector – The south coast and more specifically the Solent region contains a large percentage of the UK’s marine and maritime assets. Most notably, the Port of Southampton, has taken on increased importance in the drive to expand and diversify UK exporting with its proximity to global trade routes. The Port is the UK’s leading automotive export hub, the cruise capital of Europe, and accounts for 50% of all UK trade with the growing Far East market. Portsmouth is the home of the Royal Navy and has a range of strategic defence assets of national significance. The Southampton Marine and Maritime Institute (SMMI) and the National Oceanography Centre-Southampton (NOCS) are internationally renowned, providing connectivity to the global community. The clustering of marine and maritime businesses in the region justify the development of a sector deal. Unfortunately, the SIC code classifications do not recognise this sector, adding a degree of difficulty in refining the sector. The Marine and Maritime sector is not only made up of ports, logistics, and vessel design and construction, but also propulsion systems, advance materials (such as composites), insurance, regulatory, finance, maritime law, communications (under water and long distance), autonomous systems, and many more.

• (Q31&33) Digital Sector – Digital technologies have an enormous market presence in addition to being the enablers for an increasing number of other sectors. The Innovation South’s Science and Innovation Audit is currently focusing on the regional cluster of digital enabling technology activities. Over 55% of all digital sector employment is located in the regional cluster. Digital businesses are an increasingly vital component of the growth of the UK economy, and the increased productivity that the digital technologies bring to virtually all elements of the economy make the digital sector the most important in improving our productivity. The University of Southampton has been a global leader in digital technologies for many decades, leading the way in digital electronics, digital processing, digital communications, computer sciences, web sciences, and big data analytics. Creation of a Digital Sector Deal is absolutely mandatory for the UK.

Pillar 9: Driving Growth Across the Whole Country

• (Q35) Although the South East and London tend to be the most prosperous and are the most productive regions in the UK, these characteristics are not uniform across the regions. In fact, Southampton and the larger Solent LEP area have similar characteristics to many of the more deprived areas in the north of the UK. The Solent economy in 2015 grew at only 1.6% compared to the UK average of 2.2%. Many areas in the Cities of Southampton and Portsmouth along with the Isle of Wight are still dealing with the structural decline of the 1980’s. The UK Competitiveness Index 2016 ranks the Solent as the second least competitive LEP area, and within the Solent, Gosport is ranked 208th and the Isle of Wight is ranked 339th out of 379 areas across England. Therefore when the University of Southampton is working in close collaboration with our local and regional areas, we are helping to improve the economic wellbeing of some of the UK’s most deprived areas.

• (Q35) The University of Southampton is working very closely with the City of Southampton to create more start-up companies in high value sectors. These start-ups are being coupled into the vibrant high growth clusters in the region, such as marine, aerospace, bio-medical, and digital. The growth of these clusters is leading to expanding investment sources, both private and public. This collaboration with the City of Southampton is support by their £3 billion City Masterplan bringing forward significant commercial space alongside residential, cultural, hospitality and infrastructure development.

• (Q35) The University of Southampton is one of the UK’s strongest universities in both research and innovation, and in those areas we work not only with the local and regional areas, but also nationally and internationally. Thus we contribute to the economic growth on a very broad basis. As examples, we work very closely with companies, both large and small, in the aerospace and defence sector and many of these operations are located in the North of the UK, so we are driving growth across the whole country, and in some of the UKs most deprived areas. While it is right that Southampton and other UK research-intensive universities should be expected to contribute to their local economies, as we do, we also need the freedom and support to compete nationally and world-wide in order to provide the maximum value to the UK as a whole.

Pillar 10: Creating the Right Institutions to Bring Together Sectors and Places

• (Q37&38) The SETsquared Partnership is specifically noted in the Industrial Strategy (p.124) as an example of how the universities of Southampton, Surrey, Bath, Bristol, and Exeter joined together 15 years ago, forming a consortium to commercialise the research outputs of the member universities and to stimulate the economic growth of South Central and South West regions of the UK.

• (Q37&38) SETsquared has shared best practices among its member universities, resulting in UBI ranking SETsquared as the Global #1 university business incubation program.

• (Q37&38) SETsquared has developed the ICURe (Innovation and Commercialisation of University Research) program addressing the challenge of commercialising more of the research outputs from the universities in a more timely manner. The ICURe program is proving to be even more effective than initially envisioned and SETsquared is offering the program to universities across the UK. In a little over a year, teams from 25 non-SETsquared universities have taken advantage of the ICURe program, and now BEIS and DCMS are providing additional funding to expand the program to even more of the UK universities with research that has commercial potential.

• (Q37&38) SETsquared with its ICURe program and expanding incubation/business acceleration hub programs, is already expanding its reach, providing its proven capabilities and expertise across the UK, to help close the gap between the most productive universities, companies, industries, places and people and the rest of the UK.

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