Recommendation 3

HM Government · verbatim extract Accepted

The government partially agrees with these recommendations. We strongly agree that a coordinated approach is important and tracking the impact of that approach is equally important. We are already coordinating development of regional clusters through a number of existing mechanisms. Our current approach, as reflected in our modern Industrial Strategy, is to support clusters through sustained investment in R&D, skills, infrastructure and innovation diffusion, while enabling local leaders, businesses and institutions to shape development in line with regional strengths. This is underpinned by actions set out in the Industrial Strategy, which UKRI’s organisational objectives and key results are aligned behind. For this reason, we do not consider that a separate national framework for cluster development is required at this point in time. Over the next year we will develop a more robust and joined-up approach to monitoring the development of innovation clusters over time. This will allow policymakers to make more informed decisions and support better engagement with local leaders about where and how to support priorities. This will include identifying key metrics for high-priority innovation clusters and using them to track development of capabilities and competitiveness over time. In parallel, UKRI will produce programme and region-level evaluations of the key innovation clusters supported by the Local Innovation Partnerships Fund, focusing on the effectiveness of funded projects, private co-investment stimulated through the projects and the success of the programme in supporting innovation-led local growth. The published DSIT Innovation Clusters Map 2025 already includes a suite of these metrics at cluster level, however, we will expand the metrics it captures. The next update to the Innovation Clusters Map this autumn will provide DSIT with data which for the first time allows us to track the performance of priority clusters on a year-by-year basis, including the level of public R&D investment that supports them. For subsequent updates, we will look to develop and expand the scope of data to align with the theoretical underpinnings of cluster growth, including wider factors that stimulate growth at cluster and regional level such as metrics on trade, access to finance, skills and cluster competitiveness. While expanding our understanding of cluster development is critical, better data often requires new information collection methods and data management systems that take time and resource. Therefore, improving and publishing data is not an end in itself and we will continue to refine our approach to prioritise the most valuable data and metrics.