UK innovation hotspot lies outside London, shows research

New statistics have shown that London isn’t the land of innovation we once thought it was.

The UK’s supposed reliance on London was further quashed when new research showed that innovation is spread widely throughout country. In fact, in terms of creation of new technologies, London is way down the list in 25th place, according to the Enterprise Research Centre (ERC).

Benchmarking Local Innovation, the ERC’s new index, surveyed data from 14,000 firms that are producing “cutting edge” technologies. The findings suggest that the UK’s innovation “heartland” is centred on an arc that stretches from Greater Cambridge and Greater Peterborough Local Enterprise Partnership (LEP) through the South-East Midlands to Oxfordshire and west along the M4 corridor.

Professor Stephen Roper, who led the ERC research, commented: “For the first time, this research gives us a picture of which localities of the UK have the highest proportion of firms introducing new products and services.

“The findings run counter to the dominant narrative of a country dependent on London, with innovation being much more dispersed across the country than was previously thought.”

London focus lies on service sectors

The index found that only 17 per cent of businesses in London introduced a new or updated product or services during the two years of the survey, which compares to Oxfordshire's impressive 27 per cent.

ERC suggested that London’s focus on service sectors, such as law and finance, could be the reason behind the surprising figures, as innovation in these fields is less easy due to strict regulations.

Oxfordshire was home to the highest levels of product and service innovation, with Gloucestershire and the M4 corridor area coming in close behind, while lower levels of innovation appeared to be associated with peripheral and coastal areas.

Quarter of Tees Valley firms claim they innovate

There were a number of better performing local areas in the South Midlands, but the report also noted that the Tees Valley was a significant exception as 24 per cent of firms in the area were innovating.

“Innovation is strongly linked to growth, exporting and productivity - all areas in which the UK economy needs to improve if we want to boost our international competitiveness,” said Professor Roper.

“The significant variation between different parts of the UK suggests that some localities are succeeding in creating a more innovation-friendly environment than others,” he added.

Meanwhile, the areas of Scotland, Wales and Northern Ireland were all lagging in terms of innovation, which all had below average levels. The lowest levels of innovation were reported in Cumbria, Northern Ireland and Eastern Scotland.