Lancaster University research informs major new report on UK industrial and innovation policy

The UCL Commission for Mission-Oriented Innovation and Industrial Strategy (MOIIS) launch of A Mission-Oriented UK Industrial Strategy © Kirsten Holst/UCL
The UCL Commission for Mission-Oriented Innovation and Industrial Strategy (MOIIS) launch of A Mission-Oriented UK Industrial Strategy

Research from Lancaster University has helped to shape a major new policy report setting out an approach for the UK to tackle major 21st century challenges.

The UCL Commission for Mission-Oriented Innovation and Industrial Strategy (MOIIS) published A Mission-Oriented UK Industrial Strategy this week.

The Commission, chaired by Professor Mariana Mazzucato and Lord David Willetts, comprises world-leading academics and industry experts, including Lancaster Distinguished Visiting Scholar Professor Alan Hughes.

Its report draws on a wide range of research, including collaborative work on industry policy undertaken by Professor Hughes and Professor Martin Spring of Lancaster University’s Centre for Productivity and Efficiency.

The report sets out an approach to UK investment and innovation to solve the four systemic 21st century Grand Challenges of the Future of Mobility, the Ageing Society, Clean Growth and the AI and Data Economy, identified in the UK Government’s Industrial Strategy.

Drawing on the analogy of the US mission to put a man on the Moon in the 1960s, the report’s central argument is that addressing the Grand Challenges requires a fresh, “mission-driven” approach to industrial and innovation policy. This approach would identify specific problems which must be solved and then create specific problem-driven missions within each of them. These will typically span multiple business sectors and require cross-government departmental collaboration and coordination.

Professors Martin Spring (left) and Alan Hughes

This cross-sector, mission-driven approach depends on developing strong sectoral foundations. The work of Professors Hughes and Spring asks how this can be best done, and their research has led them to advocate an innovation systems approach. This identifies the key players in sectors and their interconnections. Identifying where these players create value and how to capture that value in the UK are key to sectoral policy development. Developing sector-based industrial policy in this way is an essential complement to the mission-driven approach and is included in the Commission’s recommendations.

Professor Hughes said: “Placing societal challenges at centre stage in innovation and industrial policy is an important new way of framing policy development. Solving mission-driven problems will also require that the UK develops its sectoral and technological capacity to deliver against those missions and foster newly emerging, in particular general purpose, technologies with potential applications across multiple sectors.

“Industrial policy must tackle head-on the particular systemic failures that prevent UK-based firms from both creating and capturing value added in the UK. This will require a granular approach to policy and a much enhanced policy development capability in UK government.”

Professor Spring added: “The tightly-connected networks that make up industrial sectors within the UK are a fantastic resource of technological and operations know-how.

“Responding to grand challenges requires further investment in R&D within the sectors, but it also requires a concerted effort to create the right institutional environment that will make it possible for firms to develop novel solutions and business models so that they can redirect their fundamental technological capabilities toward new problems, in new ways. In other words, technology, policy and management must work in concert.”

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