Professor Raquel Ortega-Argiles, a researcher at the Manchester Institute of Innovation Research at the University, gave one of the welcoming plenary speeches at the Geography of Innovation international conference held in Milan, Italy in July.

The regional sub-national R&D (research and development) distribution in the UK, based on the UKRI and ONS databases, is unevenly distributed, with London and the South East (LSE) accounting for 54% of the UK’s private R&D spending and 52% of the UK Government’s R&D expenditure.

R&D is a key input to innovation, and innovation is one of the most important drivers of economic development, productivity and ultimately economic cohesion. As such, public support for Research and Development is potentially a key contributor to the ‘levelling up agenda’. The new Levelling Up R&D mission included in the White Paper of Levelling Up aims at reducing these UK regional disparities by boosting R&D spending, focusing on areas outside of South-Eastern England by at least 40% by 2030, and over the Spending Review period by at least one third. This additional government funding will seek to leverage at least twice as much private sector investment over the long term to stimulate innovation and productivity growth.

Capturing the effects of R&D on productivity and economic growth is difficult as they go beyond the linear and direct impacts. They generate spillovers and indirect effects; therefore, increasing R&D expenditure promotes a positive interindustry spill-over effect, increasing the benefits of R&D returns in Gross Value Added, not only in high-tech industries but also in less technologically and knowledge-intensive industries. By the use of recent techniques such as multilevel mediation or input-output analyses, Professor Raquel Ortega-Argiles and her co-authors Pei-Yu Yuan, Matthew Lyons and Huanjia Ma are able to capture these indirect impacts. One of the main conclusions extracted from the analysis is that the returns obtained from the implementation of the mission will differ depending on the distribution of the increase in R&D public spending across the UK regions.