Building innovation-hungry business clusters can foster collaboration between firms and spur competition, launch new products and help build skills for the future. It could be just the ticket to creating thriving regions and nations across the UK.
We asked some of the UK’s best innovators – many of them members of the CBI’s Thriving Regions & Nations Steering Committee – how more businesses can get involved in developing long-term partnerships that will drive innovation. It boiled down to a series of conversations about the value of strong and long-term partnerships and how best to make them.
Here are their top tips:
- Take one step to collaborate, it’ll open your eyes to many more opportunities.
The pandemic has opened up businesses’ understanding that collaboration is possible in many different guises – but there’s a long way to go before this becomes more of a habit, rather than something out of the ordinary.
SMEs in particular might find it hard to take the plunge. But simply putting themselves out there can help to change their perspective.
Take the government’s Help to Grow scheme – designed to boost growth prospects for smaller businesses. Dr Robert Wapshott at Nottingham University Business School, for example, believes business owners taking part in the Help to Grow: Management course have not only benefitted from sharing their experiences with peers, they’ve also realised how universities are an “open door” for innovation support. That can be through connecting them with relevant research projects and businesses facing the same challenges, or as a source of potential talent.
- Make the effort to understand what’s on your doorstep.
“One thing that frustrates me massively is that people don't know what they’ve got on their own doorstep,” says Andrew Evans, Senior Director at KLA – a business involved CSconnected, the Welsh compound semi-conductor cluster.
The cluster has been described as being at the heart of the next industrial revolution. But to start with, many of the companies now working together as part of it didn’t realise neighbouring businesses were working on complementary – rather than competitive – technology. A couple of them were even unknowingly working on different stages of the same client project.
Natural clusters form where common skills pre-exist, but creating more formal structures and processes that boost local partnerships will increase the opportunities for innovation and growth to spread so much faster.
- It’s a CEO’s job to network and cultivate relationships for the long term.
It’s how to build credibility in your company and raise the profile of what you’re doing – so that others are aware of the possibilities that could come from working with you. Find ways to stay in touch. “It’s as much about fostering relationships person-to-person, as it is company-to-company,” says Kirsty Lloyd-Jukes, from Google subsidiary Waymo, and previously CEO of Oxford spin-out Latent Logic and Director of Ventures at the AA.
- Put your egos, nerves and cynicism to one side – collaboration and competition aren’t mutually exclusive.
“Don’t be too nervous about information-sharing,” adds Lloyd-Jukes. “In general, the bigger risk is not from over-sharing, but from being too protective of your ideas and failing to get the message out there.”
As the saying goes, a problem shared is a problem halved. And according to KLA’s Evans: “When you start laying out what the issues are – or the challenge you’re trying to solve – you soon realise that it’s helpful to work together.”
“On skills, for example, if you ask a university to change their course as a single business, you’re not going to get anywhere. Go back as part of a consortium of seven or eight businesses that are employing 300 people a year, you’re going to have a lot more impact.” The same applies if you’re trying to attract project funding.
- It’s in big businesses’ interest to open the doors for smaller companies in their supply chain.
With limited resources, smaller companies may not know where to start, who to turn to or have a loud enough voice when they have a good idea or a challenge to overcome. The companies they support can have more influence than they realise in making connections, smoothing access to grants or helping firms to diversify.
Evans points out that if a big business is 95% of a supplier’s customer base, that’s not healthy for either party – and opportunities for innovation will be missed. When his company held a supplier workshop-cum-speed-dating session with participants from the Welsh government, the CBI and the Chambers of Commerce – six out of 10 suppliers went on to do something different, including accessing innovation grants and applying for patents.
- Don’t limit yourself by your procurement processes.
“The biggest problem when it comes to innovation diffusion is that we switch off our minds when we come to procurement,” says Stuart Martin, CEO of the Satellite Applications Catapult. “We’ve got this view that procurement is there to get value for money. We go for the low-risk option. That’s not going to give you innovation. It’s not going to help you find competitive advantage.”
- Piggyback on government opportunities.
The space sector could hold the key to answering big challenges like climate change and energy, health and healthcare. It’s also a sector in which the UK has a real opportunity to lead.
Crucial to that success, says Rafel Jorda Siquier, Founder and CEO of Open Cosmos, is government ambition and buy-in as an anchor customer. “It helps accelerate all of that industry behind a single goal. It stimulates the entire supply chain,” he says.
That’s all the better when it comes to exporting the end product, he continues – having your own government as a customer does wonders in terms of international marketing.
- Don’t dismiss clusters as irrelevant if they’re not focused on your sector – or they’re based elsewhere in the country.
They can be relevant to every business, whatever your size or sector. Just as an individual CEO has a responsibility to raise the profile of what their firm is doing, clusters are great at focusing attention on the magic that tends to happen behind closed doors. It can spark ideas for collaboration from anywhere in the supply chain. It can attract ideas from other industries. And, importantly, from other clusters too.
“We need to use the power of the cluster – and we need to do that on a national scale,” says Martin. “We need to make sure that we’ve got ways to make the value that’s created in those clusters relevant to all the other things that are going on around the country, and create links backwards and forwards from them all.”
“It’s only when you connect the dots across multiple industries that you have truly impactful innovations that work across the entire economic system, not just a fraction of it,” agrees Siquier. “It ends up being an enabler for multiple sectors of the economies to thrive.”
And, after those tips, if you were left in any doubt of the role of innovation in boosting regional growth, let me leave you thinking on these words from Martin: “If you don't make innovation foremost in your approach to levelling up, then levelling up just means forever catching up.”
