Manchester City Region Innovation Prospectus

 
Manchester City Region Innovation Prospectus
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                                Manchester City Region
                                 Innovation Prospectus

Manchester: Knowledge Capital on behalf of the Association of Greater Manchester Authorities, July 2009   1
Manchester City Region Innovation Prospectus
Contents
1. Vision of the Prospectus                                 P3
2. Aim of the Prospectus                                    P3
3. Why Manchester, why now, and why a prospectus?           P4
4. Potential Programme Level Outcomes                       P9
5. Core Challenges and Strengths                            P11
5.1      Two Grand Challenges                               P11
5.2      Potential Barriers                                 P11
5.3      Strengths                                          P14
6.    The Proposed Programme                                P16
6.1      Changing Attitudes and Behaviour                   P17
6.2      Innovation Partnerships                            P24
6.3      Innovation System Strengthening                    P31
7. Partnership Working for Success                          P37
8. Conclusions and Next Steps                               P37
Appendices                                                  P39
A1.1    Building on a Solid Foundation                      P39
A1.2    The Manchester City Region economy                  P39
A1.3    Challenges and Gaps in the Wider Economic System    P40
A1.4    Innovation System Approach and Manchester           P41
A2      Innovation Hubs                                     P43
A3      Examples of Innovation Manchester Projects          P47
A4      Universities Framework; Knowledge Exchange Escalator P49

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Manchester City Region Innovation Prospectus
1. Vision of the Prospectus:

To transform Manchester1 into one of Europe’s leading cities for innovation by
2015.

2. Aim of the Prospectus:

To set out:
      •    a high-level view of the potential programme for transformative
            innovation;
      •     why we need more innovation across Manchester;
      •     what could be achieved if innovation can be accelerated and broadened
            across the city region;
      •     an outline and aspirational programme to accelerate innovation;
      •     how different players need to work together to deliver more innovation.

Our starting points are:
      •     the particular strengths and opportunities on which Manchester can build;
      •     the challenges and gaps which need to be addressed to realise the vision.

Our principles are:
      •    everyone can innovate - not just special people in special places;
      •    diversity drives innovation;
      • ethical, radical values are part of how Manchester does innovation past
           and present;
      • innovation is valuable not just for its own sake but for what it can deliver,
           economically and socially.

1
  In the Manchester city region we tend to use the names Manchester, Greater Manchester and the Manchester city region
interchangeably. This prospectus is no exception. If we want to specifically discuss Manchester city centre, or the local authority
area of Manchester, then we will make this clear.

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3. Why Manchester, why now, and why a prospectus?

    Manchester is and always has been an innovative place, a place where people
    have new ideas which are taken up and in some cases, have changed the
    world. Manchester is the perfect place for ambition on the city region scale.

    Many of the building blocks needed are already in place – international
    connectivity, good and fast improving digital infrastructure, world class
    universities, great civic leadership and ambition, a vibrant third sector and a
    bed-rock of great home grown businesses coupled with national and
    international names attracted by our people and the quality of our transformed
    regional centre.

    There is also an impressive network of people from the private, public and
    third sectors who are completely committed to our city and have dedicated
    significant time and energy to the question: how do we make Manchester a
    leading city for innovation?

    Many recent papers about innovation, including the government’s Innovation
    Nation (2008) set out strategies for fostering innovation in the midst of “a
    stable and supportive macroeconomic climate”2. Whilst the economic climate
    has changed, the need for innovation has not. Increases in infrastructure
    spending, concerns about sustainability and the emergence of new
    technologies can all offer opportunities for innovation.

    Innovation is not just another way of responding to the economic downturn;
    NESTA3 believes we should use innovation to attack the recession and that the
    economic crisis offers opportunities to reshape the way we do things.
    Innovation applies to the public and third sectors as much as it does to
    business, to services as well as to products and can be driven by social need as
    well as by the profit motive.

2
 Innovation Nation, Department for Innovation Universities & Skills, March 2008.
3
 Attacking the Recession: How innovation can Fight the Downturn. Charles Leadbeater and James Meadway. Published by
NESTA 2009.

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This Prospectus is part of the desire in the Manchester city region to seize this
opportunity. This does not mean that we see innovation as a short term fix to
current problems, but rather that actions we can take to promote it in the
short to medium term (3-5 years), will help the city region both now and in the
long term.

The Manchester city region is currently regarded by its peers and by the UK
government as the place which is capable of devising innovative new forms of
city regional governance. In our Multi Area Agreement submission to the
government in 2008, the 10 local authorities of Greater Manchester set out a
series of building blocks which will accelerate the city region’s economy. One of
these building blocks focused on innovation and promised the submission of
this Innovation Prospectus to the government’s (then) Department of
Innovation, Universities and Skills, now the Department for Business,
Innovation and Skills.

As with any prospectus, this document presents the main features only of the
proposed programme. It is intended to galvanise activity around innovation -
attracting commitment, talent and investment both from within the city region
and outside. It forms a key input into the Greater Manchester Strategy and
delivery plan but by the very nature of a prospectus, and especially one for
innovation, the action plan will need to be built up through partnership
development over time.

The prospectus has been drawn up by the Manchester: Knowledge Capital
(M:KC) partnership on behalf of the Manchester city region. M:KC is a
partnership of the ten Greater Manchester authorities, four universities, the
North West Development Agency, other key public agencies and leading
businesses. The development of the prospectus has been led by a senior level
advisory group, chaired by the Chief Executive of Salford City Council and
supported by the University of Manchester Business School. A draft of the
prospectus has been the subject of consultation, with over 60 consultees and
25 detailed responses which have been taken into consideration in preparing
this version. The Manchester: Knowledge Capital Board have agreed the
general approach and endorsed further development based on the original
document.

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Why innovation is important

Innovation contributes to productivity, growth and competitiveness. At its
broadest, innovation is…“the ability of individuals, companies and entire nations
to continuously create their desired future”4. Fostering innovation in the city
region involves new approaches to organisation, business models, and public-
private relationships in and across the private, public, and third sectors.

The government identifies innovation as one of five key drivers of productivity,
alongside investment, skills, enterprise and competition. The contribution made
by innovation to economic growth is significant: improvements in productivity
resulting from innovation, technological catch-up and restructuring have been
estimated to account for between a third and a half of the average business
sector’s Gross Domestic Product (GDP) growth over the past two decades5.

GDP is a proxy measure for innovation but recent work6 has shown that a
modified version of GDP may still be the most practical measure. If Manchester
maintains the pace of innovation seen in recent years, it will at best retain its
position of 57th out of 78 large metropolitan areas across the world as ranked by
per capita GDP in 2006.7 For Manchester to match similar cities in Europe and to
address major economic, social and environmental challenges, the city region will
need to pro-actively accelerate the pace of innovation as an essential component
of its economic, social and environmental strategies.

The Manchester Independent Economic Review8 states

           “Innovation is absolutely central to economic growth and
          prosperity in the long term. Cities and regions with a higher
          proportion of innovative businesses and individuals are those
          which prosper and whose inhabitants thrive.”9

In partnership with NESTA and NWDA, Manchester partners have taken small
steps over the past months to accelerate the pace and nature of innovation

4
  John Kao, Innovation Nation, 2007.
5
  Scarpetta, et.al. OECD Economics Working Paper, 248, 2000.
6
  http://www.nesta.org.uk/measuring-innovation/
7
  OECD, 2006, “Competitive Cities in the Global Economy” looked at the 78 largest metro-regions in the OECD ranging from
Tokyo (35 million population) to Auckland (1.5 million) Manchester here is the 10 AGMA authorities.
8
  Manchester Independent Economic Review (MIER), 2009, www.Manchester-review.org.uk.

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through the Manchester Innovation Investment Fund.10 Partners recognise that
significant barriers and challenges need to be addressed if the level of innovation
dynamism in metropolitan areas in other locations such as Helsinki, Finland or
San Diego, USA is to be realised in Manchester.

What we mean when we say “innovation”?
Innovation here is defined broadly: it can be defined as “a change that creates a
new dimension of performance”.11 It is not merely a new idea - but the practical
application of that idea through a new product, a new process, a new
organisational operation, a new marketing approach or a new service. Innovation
only exists when the new idea is used and/or applied. It can be radical and
disruptive, destroying old ways of doing and working and creating obsolescence;
or it can be incremental and additive - building on existing knowledge, products
and services. Innovation is not always universally beneficial.

The Manchester approach therefore views innovation applying to the private,
public and third sectors and regards it as an important a tool to help address
some of our biggest challenges such as health inequalities and the move to a low
carbon future. Innovation is sometimes characterised as involving 3 main players
- business, universities and government but the Manchester model of innovation
involves 5 main players, reflecting modern global understanding of how
innovation works:
          businesses, as the focus of economic growth;
          universities and other education/research centres including colleges,
          schools and NHS – as sources of knowledge, ideas, and skilled people;
          government at all levels, as policy-shapers and service providers;
          people, as end-users of innovation, participants in open innovation
          platforms, and producers of innovation;
          the third sector, as key players in social innovation and critical areas such
          as health, the environment and equality of opportunity.

How innovative is the Manchester city region at present? This is not easy to
measure. Much measurement of innovation remains traditional, focused on
business, is done at a regional level and many of the indicators relate to input

9
 MIER, 2009, Innovation , Trade and Connectivity Report, p4
10
 NESTA, the Northwest Regional Development Agency, Manchester City Council, Manchester: Knowledge Capital and the
Commission for the New Economy have been working together since January 2007 to pump-prime innovation activity across
Manchester via the Manchester Innovation Investment Fund.

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measures, such as how much money is being spent on activities which we hope
will produce innovative outputs e.g. research and development (R&D).12
A new index is currently under development by NESTA and government13 and can
be used over the time-frame of the prospectus. In addition qualitative measures
can be put in place to monitor progress and the direction of change across the
city region.

11
   Drucker, P.F. Innovation and Entrepreneurship, Butterworth, 1985.
12
   For example in 2007, the North West accounted for 13.3% of the total R&D spend by UK businesses, with most of the rest of
R&D activity clustered in the East and South East of the country,OECD,2008.
13
   NESTA, Innovation Index

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4. Potential Programme Level Outcomes

Outcomes of a concerted effort across the city region, to expand the scale and
accelerate the pace of innovation in the medium (3-5 years) and long term (5-20
years) are expected to be:

Medium term

     •   Faster and more effective absorption of new ideas and practices into
         products and services (NESTA show a direct effect of knowledge absorption
         and GVA performance14)
     •   Increased connectivity across and between firms and individuals in the city
         region (“just one link” would improve innovation diffusion, MIER,200915)
     •   Better marketing of Manchester as a place for innovative firms and
         individuals to make their home
     •   Improved networks and leadership that can sustain and continually build on
         progress for future challenges16
     •   Increased venture funding of innovative, high added value businesses and
         new start-ups, resulting in enhanced survival and growth rates
     •   Increased inward investment, encouraged by greater international
         recognition of Manchester as a leading city for innovation.

Long term

     •   Higher rates of metropolitan wealth creation and economic performance
         (Finland averaged 4.5% GDP growth in 200717);
     •   Changed attitudes amongst citizens and especially young people towards
         entrepreneurship, opportunity development and risk;
     •   Improved and more effective and efficient public services (52% of Beacon
         Authorities reported improvements in working practice18);
     •   Improved attraction and retention of talent (Atlanta does well in retaining
         local college graduates and gains more 25-34 year olds than it loses19);
     •   Increased levels of innovation performance and productivity in existing firms
         (Productivity growth by innovative firms at minimum 1% higher than non-
         innovators20);

14
    Innovation by Adoption, Figure 28, NESTA, 2008.
15
   Innovation, Trade and Connectivity Report, MIER, 2009.
16
   Leadbeater, C, The Innovation Boardroom. A report for Manchester: Knowledge Capital, 2009.
17
   Science Technology and Industry Scoreboard, OECD, 2007
18
   Hartley, J. Innovation and Improvement in Local Government, IPEG conference Manchester, 2006
19
   Atlanta – Young and Restless :How Atlanta Competes for Talent. Metro Atlanta Chamber of Commerce, 2006.

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•    Improved sustainability21 through new ways of addressing major economic,
          social and environmental challenges;
     •    Communities and citizens implementing their own solutions to local
          challenges.

A benchmark for the city region is the remarkable change in the Finnish economy
and society over a period of 10-15 years – where GDP grew by 4.5% in 2007 and
improvements in health and educational performance in early years is renowned.
The population of Finland is exactly equivalent to the population in the
Manchester commuter zone (just over 5 million).

Outcomes for specific actions are also described throughout the prospectus.

20
     Results from CIS2/3 analysis, BERR presentation . www.berr.gov.uk.
21
     Sustainability is defined here in the classic 1980’s definition of the integration of economic, social and environmental factors.

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5. Core Challenges and Strengths

5.1 Two Grand Challenges:
In reviewing the context for innovation across Manchester, the Manchester
Business School analysis identified the following two Grand Challenges:22

          1. To expand the scale and accelerate the pace of innovation to enable
          Manchester to be on a level with other innovative cities.

          2. To ensure the innovation agenda works to achieve broader economic
          and social goals across the city region.

The scale of these two challenges and the activities which could tackle them are
so broad that no single institution or process can own them. Manchester knows
that partnership working is a pre-requisite for success.

5.2 Potential Barriers

Manchester faces some very straightforward practical barriers to greater
innovation. There are big inequalities in our city region. Whilst almost a third of
our residents have degrees, we have more people with no qualifications than the
national average23. Too many people lack even the most basic of skills, have very
low aspirations and too many of our residents live in areas ranked as the most
deprived in the country. Raising skill levels has been identified by the MIER as the
key issue on which the city region must focus on in order to raise productivity and
tackle deprivation. Innovation requires more than skills. It requires an aspiration
to drive change. While formal skills are rightly a major priority for actions under
the Greater Manchester Strategy, aspiration and attitudes for innovation will also
need to be addressed to achieve the vision set out here.

Likewise, while Manchester can provide an additional growth pole to London for
the UK, historic investment patterns mean that the assets on which an innovative
environment can be built may be less strong. For example, public sector research
establishments are clustered in the South East and continuing investment tends
to lead to an ever widening gap in provision. Such “clustering” cycles can only be

22
   Shapira, P., et al (2009), Innovation for the Manchester City Region: A Discussion Paper. Report to Manchester: Knowledge
Capital.
23
   MIER Economic Baseline 2008. http://www.manchester-review.org.uk/economicbaseline

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broken by deliberate interventions - which the city region will work with
government to address through the Greater Manchester Strategic Plan.

A number of recent consultation events and research studies have similarly shown
that we also have some specific gaps in innovation assets and the innovation
support system.24
These include:
        •    Specific facilities such as grow-on space for specialised science-based
             businesses;
        •    Shortage of specific incubation facilities, and a lack of flexible, easy-access
             space for a variety of enterprises;
        •    Access to seed, start-up and early stage funding;
        •    Business Development Support Services such as:
                  o    Support to be investment ready;
                  o    Development of management teams;
                  o    Mentoring and access to Non–Executive Directors;
        •    Assistance with problem solving and idea generation;
        •    Links across sectors and communities;
        •    Slow development of Next Generation Broadband compared to comparable
             international cities;
        •    Lack of global connectivity and awareness;
        •    A weak enterprise culture;
        •    No single access point for information for innovative businesses about
             innovation in and around Manchester.

As well as the practical issues above, our background research25 for the
prospectus has highlighted five specific issues which need to be taken into
consideration in the development of an action programme to address the two
Grand Challenges set out above, these are:

•       Changing Attitudes and Behaviours. By definition, innovation introduces
        new products, processes, organisational structures and new ways of doing
        things. A significant challenge is to overcome the legacies of the past such as
        old ways of thinking, a risk averse culture, or inadequate capabilities that limit
        new strategies. In any programme to increase the pace of innovation across
        the city region - there will need to be a programme which celebrates

24
     MIER; Innovation Networks Study – Zernike; M:KC Stakeholder Events; Innovation Manchester Teams.
25
     Shapira, et al, Op.Cit.

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innovation and seeks to change aspirations and attitudes towards risk and
change.26

•     Too broad/too much. In using a broad approach to innovation, including
      business, social and public service innovation, there is a danger of loss of
      focus. In the proposed programme, this danger is addressed through the
      adoption of a networked-based approach which allows for many different
      partners to be involved with their own specific focus, while a function of co-
      ordination and collaborative reporting can link to the new governance
      arrangements in the city region.

•    Silos. Different streams of policy – such as business support, education and
     training, social and economic policies and initiatives which can tend to work
     separately need to be aligned. Many of the major formal partnerships across
     the city region are area-based and quite naturally need to make this joined -
     up approach to their delivery. Tapping into the power of the existing
     partnership structure while networking between different initiatives is one way
     in which innovation can be embedded across different policy areas.

•    Current economic conditions. While it is widely acknowledged that
     innovation is critical to address significant global challenges such as climate
     change, poverty, poor health and security, the current global economic
     downturn can also inspire new ways of thinking and organising. However, for
     some the challenge of survival may crowd out innovative thinking. An
     approach which enables bootstrapping of carefully targeted resources and
     partnership working may assist in addressing some of the current economic
     pressures.

•          Innovation is pervasive. The new governance arrangements for the
Manchester city region are settling in and each of Manchester’s new
Commissions27 will have their own interest in innovation – for productivity and
also for efficiency. Innovation should be seen as a cross-Commission theme,
being a valuable tool for the Health Commission as much as the Economic or
Environmental Commission. Innovation however, cannot be commanded and
therefore requires a skilful mix of top down support from the Commissions and
acceptance combined with entrepreneurial licence. The Commissions will play a

26
  Known as “path-dependency”, much is known about the difficulty of places to change their old habits and to embrace change.
27
  Seven Commissions will support the work of the ten local authorities of Greater Manchester, covering key policy areas such as
economic development, health and the environment.

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vital leadership role in supporting innovation in their remits and therefore
constitute key partners in any endeavour to raise the pace and scale of innovation
across the city region.

The proposed programme set out in the prospectus has been designed with each
of these challenges and barriers in mind and also seeks to make the most of the
strengths and opportunities which exist across the city region. The proposed
accelerators focus on the specific areas identified by the Advisory Group as
addressing key drivers and opportunities for innovation across the city region.
Innovation has been identified as an important component in the Greater
Manchester Strategy and work will be undertaken through the development of its
action plan, to undertake active discussions with potential innovation champions
and to develop the partnerships needed for delivery.

5.3 Strengths28
Innovation is in the DNA of Manchester. Manchester has been the birthplace of
some of the greatest ideas and movements of the modern world. Manufacturing,
free trade, the Cooperative movement, computers, IVF and atomic energy are
part of the authentic innovation pedigree of Manchester. Today, Manchester
continues to produce innovations that have the potential to be world-changing –
such as two dimensional materials.29

Many forward strategies and plans for places look the same, but there are some
Manchester-only opportunities which make the Manchester offer unique in the UK
at this point in time. The scale and significance of these opportunities underline
how Manchester’s journey to become one of Europe’s most innovative cities is
built on reality, not hyperbole.

        •    The Corridor, Manchester. An intense cocktail of education, health,
             culture and business activity, with £2.5 billion of existing and planned
             redevelopment, and 70,000 students adding to the creative buzz.
        •    MediaCityUK. The UK’s only media city is rising fast out of the ground at
             Salford Quays and will provide scale and quality unique to the country,
             including space for 1000 companies and 5 major BBC departments.

28
     Background details on our challenges, strengths and the approach to innovation are set out in Appendix 1.
29
     http://www.materials.manchester.ac.uk/aboutus/news/

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•   SportCity. The largest concentration of sporting venues in Europe,
       with exciting potential to explore the environmental credentials of large
       developments, sports science and the business of sport in the city region.

As well as these Manchester-only opportunities, we have two essential assets for
any city region’s potential success in the global networked economy:

   •   Manchester Airport. A large international airport is vital to the ongoing
       development of a connected, knowledge-based and innovative economy.
       Multi award-winning Manchester Airport is among the world’s 20 largest
       airports with a growing reputation for leadership in carbon emission
       remediation.
   •   City leadership. Greater Manchester is leading the way in the UK for
       joined up approaches to local government, and is one of only two cities to
       be designated a statutory city region in the 2009 UK Budget.

To make Manchester a more innovative city the prospectus seeks to build on
assets and strengths and to address barriers and challenges. The proposed
programme consists of three areas for intervention across the city region. Each
intervention is built up from a number of specific activities which it is hoped will
add value and support the acceleration of innovation across the city region.

   1. A programme to change attitudes and behaviours through active
       participation in problem solving and the development and implementation
       of new solutions in the city region. This will be led by the establishment of
       an Innovation Manchester Boardroom function and leverage the potential
       of a powerfully networked city region. It will build on the existing strong
       engagement of the private sector and link to the new governance structure
       for the city region. Effectively, this will consist of a series of actions to
       inspire partners to embrace innovation.
   2. Innovation Partnerships with key city region institutions and area-
       based partnerships, regional, national and international initiatives and
       agencies. These will tackle the policy mix and silo problems, starting to
       address social and civic challenges and maximise the impact of spatial
       concentrations of innovation, particularly the Manchester-only
       opportunities. It also builds on the strengths of our world class universities
       and the potential offered by the city region’s changing governance
       structure.

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3. Specific strengthening of the city region innovation ecosystem which
       will tackle the gaps in business support for innovation and creativity,
       leveraging and increasing our digital capabilities and capitalising on the
       Manchester way of doing business.

The programme embraces the principle of maximum participation by key
Manchester institutions such as universities, businesses, service providers and
also by individuals, young and old. It will use enabling digital and mobile
technologies to maximise connections across multiple communities of innovators.

What follows is not a step by step plan with detailed actions, deadlines and
targets although where possible these are included: the detail will be developed
over time and in the Greater Manchester Strategy and delivery plan. Rather, this
is a demonstration of our thinking about where attention should be directed, and
some of the opportunities to be realised and outcomes that can be achieved if
partners across the city region are convinced to join their efforts in a concerted
effort to raise Manchester’s innovation game.

6. The Proposed Programme

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The proposed programme is made up of three groups of Innovation
Accelerators.

6.1      Changing Attitudes and Behaviours - Inspiring Innovation

It is proposed that this element of the Programme will be led by the
Manchester: Knowledge Capital Partnership.

Change in attitudes towards risk, creativity, entrepreneurship and innovation will
be supported through four areas of work:

•     At the core of the programme and the engine to address the Grand Challenges
      will be the establishment of the “Innovation Manchester Boardroom.” This
      will drive a process of continuous and continual change in engagement with
      innovation and harness the power of people’s potential to solve challenging
      problems for the city region. The Innovation Manchester Boardroom will be an
      experimental forum to animate innovation efforts across Manchester and
      spark and build on more local actions.

•     Networks of innovators which support the development of communities of
      interest are essential to support individuals who are embracing new thinking
      and working together to drive innovation through Manchester. The power of
      networks is increasingly recognised as having the ability to amplify the
      diffusion of innovative thinking and deliver significant real change. The current
      Innovation Manchester Network will form the core of the network
      development.

•     A programme to celebrate innovation across the city region by recognising
      those who are already delivering innovation and making their stories more
      widely known, especially to young people. Role models can have an important
      impact in giving confidence to many.

•     Changed attitudes and behaviours will reflect in the character of Manchester
      as place and yet there will remain a need to change the perception by
      others of Manchester as an innovative city.

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6.1.1 The Innovation Manchester Boardroom

The Innovation Manchester Boardroom30 has twin objectives:

  i.   The primary long-term objective is to significantly enhance the quality of
       Manchester’s innovation system, developing leadership across
       sectors/interests and changing how people connect and work with each
       other - a gradual culture change providing Strategic Added Value and
       scope for self-sustainability;

 ii.   The primary short-term objective is to generate a pipeline of project ideas
       for development and action, providing new solutions for the city’s major
       challenges.

Each objective supports the city region in its aim to become a leading city for
innovation, raising its competitiveness and productivity and making it better place
to live and work.
Crucially, the Boardroom will support a change in the quality of Manchester’s local
innovation systems, and there is much more to this than simply increasing the
opportunity for cross-sector collaboration. Success will be when Manchester
people:
   •   have more good ideas;
   •   are better at knowing what a good idea looks like;
   •   have a competitive advantage in the execution of ideas, by having
       developed competencies in how to execute;
   •   have access to a better talent pool than the competition; and
   •   have a better network of people and technology from which to cross-
       pollinate.

The Innovation Manchester Boardroom will play a critical role in driving the city
towards each of these objectives, laying the necessary city-wide foundation for
other initiatives and partnerships to help the city achieve its goals. Some of these
objectives, such as the instinctive sense for good ideas and how to execute them,
will take at least 5 years to develop significantly.

Measuring success and the contribution made by the Boardroom can take several
approaches, some relating to specific outcomes of the Boardroom itself and
others relating the impact that the resulting initiatives seek to achieve. An
evaluation framework will be developed, but is likely to include:

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•    Improved perception of Manchester as a place of innovation and business
             opportunity (local, national and international perception);

        •    Increased vibrancy of networks leading to business deals;

        •    Increased positive attitude towards open collaboration amongst the private
             sector;

        •    Increased absorptive capacity for innovation of organisations across the
             MCR;

        •    A gradual change of attitude, behaviour and culture across the city region
             – encouraging people and organisations to meet, create and deliver
             solutions more often and more easily;

        •    Enhanced understanding, synergy and co-operation between
             public/private/third sectors;

        •    A number of new successful innovation partnerships created;

        •    Enhanced leadership and civic relationships across sectors;

        •    Increased confidence in the city region as a leading city for innovation;
             improved international profile;

        •    Leverage of significant private sector investment and talent, from both
             within and outside the city region;

        •    Sustainability of innovation activity for the long term.

6.1.2 Innovation Manchester Network

Innovation Manchester teams were launched in 2008 by the Manchester:
Knowledge Capital partnership in recognition of the need for strong private sector
involvement in the push for a more innovative city, and the need to develop
purposeful cross-sector networks for innovators. Innovation Manchester brought
together over 70 of the city region’s top business leaders and key city partners.
They identified and prioritised ways in which Manchester’s capacity for innovation
could be increased, and acted as champions committing their own time and effort
into developing those ideas into live projects.31

30
     The Innovation Boardroom, Manchester:Knowledge Capital, 2009.
31
     Examples of some of these projects can be found as summaries in Appendix 3 and at www.manchesterknowledge.com

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Strengthening collaboration and networks will be integral to an effective
innovation strategy in the downturn. The cities that respond to the recession most
effectively will have strong local alliances that pull together the public and private
sectors, social innovators and universities.32 The recession will accelerate the
shift towards more open, networked approaches as firms increasingly learn to
share resources and collaborate, with universities as well as other firms, to
innovate.33
Simply having networks is not enough. The type of networks available, and
how they are used and connected to each other, is crucial.34 Leadbeater draws
on years of research by various scholars on innovation and place, and the role of
networks in promoting city-level competitiveness:

          “What all these analysts share is the insight that successful cities and
          regions increasingly depend on networks that allow for diverse,
          decentralised, independent players to connect and collaborate, drawing in
          new players and resources from outside as validation of these success.”

Leadbeater concludes that networks that link business and civic leaders, public
and private, universities and companies play an absolutely critical role in
providing the shared leadership a city needs to understand its challenges,
respond to crises, and shape its future. Crucially, success does not come from
collapsing these networks into one another: it comes from creating the right
connections, links and bridges between different networks that each
continue to retain their independence and character. Too much centralisation will
stifle engagement and creativity: conversely, too much dispersion or
balkanisation will lead to loss of focus and benefit.

Analysis conducted for the Manchester Independent Economic Review (MIER)35
used a network model to show that exchange behaviour is the most important
mechanism by which innovation can spread, and that cross-sector business
networks can be far more effective than sector-specific networks at fostering and
spreading innovation.36 This report also revealed that large numbers of firms in
Greater Manchester have no trading links with other Greater Manchester firms,
which inhibits the spread of innovations with the city region.

32
   Charles Leadbeater and James Meadway, (2008). Attacking the Recession: How Innovation can Fight the Downturn, page 7.
NESTA.
33
   Ibid, p11
34
   Charles Leadbeater, June 2009, The Innovation Boardroom. Report prepared for M:KC.
35
   MIER (2009). http://www.manchester-review.org.uk/
36
   Innovation, Trade and Connectivity. MIER 2009

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This finding is echoed in the independent evaluation of the Innovation Manchester
Teams initiative. One of the most dominant messages from the feedback
received from participants was that Innovation Manchester provided a very rare
opportunity for business leaders and other innovators to connect, and more
importantly to collaborate actively, with people from a wide range of different
sectors.37 There was a particularly strong demand for Innovation Manchester to
deliver more of these opportunities.

The independent evaluation of the Innovation Manchester Teams conducted by
Regeneris particularly commended the high calibre of the participants, which not
only raised the quality of the outputs/outcomes but also actively encouraged
participants to become increasingly involved.

Potential Outcomes:

     •   New collaborations and networks that lead to the creation and
         development of innovations (products, services, business models);
     •   improved diffusion of innovation across Manchester business supply
         chains;
     •   trust, relational and social capital and a sense of belonging to Manchester;
     •   attraction and retention of talented businesses and individuals;
     •   new systems and processes across organisations ensuring new thinking
         doesn’t run aground on old systems.

         Measures:
     • Increased number of networked individuals and businesses with trust-
         based relationships by 2015;
     •   Delivery of 3-5 major innovation projects through the network by 2012.

6.1.3 Celebrating Innovation

Manchester needs to be more entrepreneurial. Growth in total business
population has been comparatively slow (in comparison to UK and Eurozone City
Regions), reflecting a less entrepreneurial culture in the North of England38.

Female entrepreneurship (Total Entrepreneurial Activity) in the North West is at
3.4% compared to male at 7.3% - a differential common across the UK.

37
  Review of Innovation Manchester: A draft report by Regeneris Consulting. May 2009.
30. MIER Economic Baseline, 2008. Unit 2: Business, Enterprise and Innovation.
http://www.manchester-review.org.uk/economicbaseline/

                                                                                       21
To encourage a culture of innovation and enterprise across Manchester and grow
the Manchester innovation talent pool, celebrating the city region’s innovation
success stories and incentivising further innovation will be critical to the scaling
up of activity. This will be done by:

     •    promoting innovation successes on a regular basis, providing examples of
          young role models such as Imran Hakim of iTeddy fame, using Web 2.0
          technology to make local innovation constantly visible;
     •    working with schools through a “future innovators “programme in
          conjunction with NESTA.
In addition to growing Manchester talent, it is important to be able to retain talent
from the pool of students and sports people who come to the city. Manchester
needs to welcome and engage its future innovators more deliberately.

To attract and retain significant talent, Richard Florida has shown that cultural
attractiveness is important to attract the brightest and best.39 Manchester has
always placed as high a value on culture as commerce. Today the city has a
vibrant cultural and creative life which can be innovative itself and can also help
to foster innovation and to attract and retain innovative firms and people. The
Cultural strategy team will play a key role in this regard.

Potential Outcomes:

•    Higher levels of adoption of innovation
•    Greater ability to attract and retain talented people and companies
•    Increased awareness of local innovations
•    Higher levels of aspiration and achievement among young people.
•    Enrolment of young role-models to promote innovation.

     Measures:
•     Attitudinal change towards risk and entrepreneurship and innovation as
      measured by the GEM and other qualitative assessments by 2015
•     Increase in the knowledge of local innovators as role models by 2015 as
      measured by survey
•     Increase in business start up rates by 2015
•     Successful use of new media and social media techniques as measured by the
      number of individuals active and signed up.

32 Richard Florida, 2003. The Rise of the Creative Class. Basic Books.

                                                                                       22
6.1.4 Changed Perceptions of Manchester as an innovative city

For Manchester to become a leading innovative city, others must increasingly
believe this is the case, creating a virtuous and reinforcing circle of perception
and reality.

The unique Manchester way of doing things can support our global positioning as
an innovative place, socially inclusive of its citizens, communities and
professionals. Manchester is the original modern city and always wants to do
things differently. This is not easy to define and is perhaps evidenced best by
actions. Our long and proud history of new visions – with the action to back them
up - includes many social and cultural phenomena such as free public libraries,
the Co-operative movement and hospitals dedicated to the treatment of children,
as well as a significant array of scientific and technological achievement. Radical
and ethical thinking sums up the Manchester mind. This attitude or mindset gives
Manchester an important start in pursuing the aim to be more innovative and is
part of the city’s brand.

Key Manchester agencies including Marketing Manchester, MIDAS and
Manchester: Knowledge Capital will work to make sure the innovation offer will
appeal to companies and individuals from many different walks of life. Attracting
mobile R&D and eminent scholars, medical researchers and digital entrepreneurs
will need still further segmentation of Manchester’s offer.

Manchester will look at great innovative cities across the world to see how the city
region measures up, both now and in the future.

Potential Outcomes:

• Natural focus in marketing activities on Manchester as a place supportive of
  and open to innovation
• Improved global perceptions of Manchester.

Measures:
• Improved performance in global indicators of excellence for investment and
  business attractiveness by 2015
• Increased attraction of key individuals and companies due to the reputation of
  the place for innovation and talent-friendly support 2015
• Improved rankings in global perception surveys.

                                                                                     23
GMS Priorities: 3, 8, 9, 11
6.2      Innovation Partnerships
Lead organisations: GM Commissions, Universities, Airport
6.2.1 GM Commissions

Manchester’s rich innovation history is as much about social and civic innovation
as it is about business and technology. As each of the new GM Commissions
develops its programmes and priorities, it is inevitable that each will seek to
question how innovation might help to address long-term challenges and
increasing pressure to deliver services with ever increasing demand and
tightening budgets. In addition to the vital importance of innovation in firms
which will be championed by the Commission for the New Economy, major
societal challenges such as health inequalities and the need to become a low
carbon city will be susceptible to innovative approaches. [see boxes].

The huge power of public procurement can be used to encourage innovation, with
Manchester bringing forward new services and products where the risk is
managed. The large, vibrant and often challenging third sector will be an
important force in demanding new and better ways of working. New ways to
engage these energies to drive innovative change in service delivery will be a
priority for the coming years. Good practice from initiatives such as the NESTA
Public Services Lab can be drawn on by the Commissions, while the innovation
Manchester Boardroom and Innovation Manchester Network and team approach
can lend enthusiasm and partnership resources to each of their ambitions.

While Manchester has a significant infrastructure which supports technological
innovation – incubators, laboratories, investment funds, dedicated support and
mentoring - an equivalent infrastructure which can support social innovation
needs to be quickly developed in Manchester. There are however, already a
number of significant examples where some of the Commissions are developing
innovative projects and programmes, especially in relation to the development of
a low carbon city.

Potential Outcomes:
•     Markedly improved infrastructure and attitudes towards social innovation
      across Manchester by 2015.
•     At least two significant funding partnerships with social
      foundations/agencies/programmes by 2015.
•     Major programmes of innovation in key priority areas by 2015.

                                                                                  24
Wellbeing and Health
                  GMS Priorities: 4, 7, 11.
The challenge for Manchester is serious. With one of the greatest health divides in the country
the need for change is not only important but urgent. The foundation for improvement is
however also strong. Manchester is one of only five elite research centres in the country to be
designated as a UK government Academic Health Sciences Centre (MAHSC) and is home to
other major initiatives such as the Northwest e-Health programme; the Collaboration for
Leadership in Applied Health Research and Care (CLAHRC); and the Biomedical Research Centre.

The CLAHRC, which began work in October 2008, is a collaboration between the University of
Manchester and 19 NHS Trusts across Greater Manchester, receiving £20 million over five years
to fund research into healthcare and ensure that knowledge gained from this research is used
actively to improve health services across Greater Manchester.

It is widely recognised that there is an increased need for greater collaboration and co-operation
across organisational and professional boundaries to deliver service improvement. To accelerate
advances in medical care, the health service needs to be receptive to change and have the
capacity to deliver new innovations rapidly and to a high standard. The Manchester Innovation
Investment Fund has kick-started a major project aimed at rapidly increasing the efficiency and
quality of new product development through private-public sector collaborations. This project,
MIMIT, is described at Appendix 3.1.

                                                                                    25
Low Carbon City
The need for a major reduction in carbon emissions is important and urgent. The
success of the Manchester Is My Planet campaign shows the public appetite for action
on environmental issues. This challenge and passion for change can be brought together
to tackle some tough issues such as how to retrofit older homes with energy saving
technologies. Our participation in the Low Carbon Cities Programme, the research
carried out to give the city region its own (‘mini’) Stern report and the new Environment
Commission give us a strong platform from which to move forward. The mini- Stern
revealed that failure to adapt to climate change could cost the city region £20bn by
2020, but that rising to the challenge of mitigation and adaptation can offer significant
economic (as well as environmental) benefits, particularly if we act quickly. There is a
growing consensus that the city region has real potential to achieve critical mass in
green technologies.

The current Manchester is My Planet European projects will form a firm foundation for a
Climate Change Agency for Manchester and innovation will be at its core.

Manchester Airport is the first UK airport to be awarded the Carbon Trust Standard in
recognition of its work to reduce carbon emissions. The Airport’s environmental plan has
set a target for the airport to become carbon neutral by 2015. Manchester will work
with the airport to develop this further.

                                                                                     26
6.2.2. Innovation Hubs

To scale up productivity across Manchester, innovation needs to become the norm
in a greater number of local initiatives. While the current strength and the
outstanding potential of the Corridor and MediaCityUK are unique in terms of their
scale and potential impact for the city region economy, the hubs shown on the
map below can all contribute to their local innovation ecosystems and hence the
growth of the city region. By linking these hubs together and enabling them to
scale-up their innovation activities, explore joint and complementary working and
share good practice, the effect can be scaled up for the benefit of all. The hubs
shown on the map40 below form the core of the network but are not exclusive.
There are many other business parks such as Chamberhall in Bury and the
Oldham Enterprise Factory which also add to their local innovation ecosystem.

Innovation Hubs

40
     A brief description of each can be found in appendix 2.

                                                                                    27
This prospectus seeks to promote and encourage facilities such as these that can
provide an integrated approach to skills, knowledge, innovation and
commercialisation of ideas within environments that are accessible to business,
the community and education.

The Manchester: Knowledge Capital partnership is willing to convene a specific
network of the hubs to discuss activities such as:
    •   A rolling programme of sessions to bring together the leaders of these
        innovation hubs in bilateral or larger groups, facilitating collaborative
        working in such areas as young people, specialist skills development, and
        links to local companies, and to target opportunities with the EU, the
        Technology Strategy Board and global networks.41
    •   Convene a “hubs-network” through Innovation Manchester’s Community of
        Innovators.
    •   Position the hubs as first choice test-beds for innovation programmes at
        national and European levels - applying for at least four major
        collaborative investment programmes by December 2012.
    •   Explore the designation of “innovation hub” as an aid to faster investment
        and planning decisions by 2011, in particular to address the shortage of
        space for innovative start up companies.
    •   Build on the strengths for innovation at Daresbury and their CLIK
        knowledge transfer programme and link to other hubs in the city region

Potential Outcomes:
•   Increased profile for Manchester as a centre for innovation
•   Enhanced critical mass of sites and facilities for innovation
•   Clear and varied city region wide offer, encouraging tenant retention within
    the conurbation
•   Increased and improved networks of firms and suppliers
•   Greater collaboration and pooling of resources
•   Sharing of good practice leading to better products and services

•   Attraction of investors and workers
Measures
•   Increased number of innovative firms attracted by 2015
•   Increased space for innovative start-up companies by 2015
•   Increased investment of external funds in support of innovation into the MCR.

                                                                                    28
GMS Priorities: 3, 6, 9, 11

6.2.3 Universities
            One of Manchester’s core strengths is the presence and active participation
            of the city region’s universities in the local innovation system. Manchester
            universities play important and varied roles in the system and it is for each
            to decide how they can make the most effective impact whilst also meeting
            their challenging institutional objectives42.

            The city region needs to strengthen the impact of its universities through
            increased knowledge exchange and student engagement. The area of sport
            offers a particular opportunity, highlighted in the box below.
            Potential Activities :
        •     Develop clear priorities for innovation between each of the institutions and
              the city region through the M:KC Board by March 2010;
        •     Develop a city-wide civic welcome and continuous involvement agenda for
              university students as an innovative approach to building stronger
              relationships with future global alumni by 2012, recognising the potential
              offered by the city region’s tens of thousands of overseas students;
        •     Encourage and support the universities and other organisations to
              strengthen student and young people’s entrepreneurship;
        •     Seek devolution to the city region of those knowledge-transfer support
              programmes (such as KTP and innovation vouchers) which are delivered
              by each of the universities but which are currently dictated by regional
              and/or central government by 2011;
        •     Support the city region universities in relation to their bids for external
              funding where collaboration with business, the community and external
              partners is required ongoing to 2015;
        •     City region partners will seek to capture investment funds from the
              Northern Way, the NWDA Venture Funds and the Technology Strategy
              Board (especially SBRI) EU and others – ongoing to 2015.
        •     Team Manchester partners will work to secure mobile PSRE investment
              and/or mobile R&D projects.

Outcomes:
              •    Universities and city region promoted as exemplars of partnership
                   working by central government and respected agencies such as OECD.

41
     The Power of Place: Better Science; Better Innovation; Better World, Association of University Research Parks, 2008.
42
     See appendix 1 for more detail on each university.

                                                                                                                            29
•   Increased collaborative funding flowing into the city region, its
           universities and businesses.
       •   Established network of city region “alumni” who provide active support
           for future inward investment, export drives and promotion of the city
           region and its universities as globally excellent.
       •   Greater student engagement with local communities and internships
           with local companies to help anchor talent in Manchester;
       •   Greater availability of specialist facilities and knowledge for
           local/regional businesses;
       •   Expert advice and consultancy more readily available to companies by
           developing seamless company support through knowledge transfer
           products such as KTP;
       •   Increased generation of new companies, and commercialization of new
           ideas through licensing of IP;
       •   Improved IP management skills – with potential for knowledge and IP
           banks across Manchester;
       •   Improved co-production and co-creation in sustainable interdisciplinary
           enterprise partnerships

       •   Universities providing a place for businesses to meet and exchange
           knowledge and ideas

Measures
   •   Increased student and young people’s entrepreneurship as measured by
       Total Entrepreneurial Activity by 2015
   •   Increased inward investment of R&D through the quality of the research
       base and attracting research collaborations with global and/or local
       business.

GMS Priorities: 2, 3, 8, 9, 11

                                                                                30
SPORT
Manchester is known worldwide as a city of football. East Manchester hosts the
national squash centre, the national cycling centre in the Velodrome, many other
national/regional institutes of sport and Manchester City. But the city region has
been growing significant breadth and depth in the business of sport, including
sports law, retail, science, technology and medicine. The Innovation Manchester
sports team brought some of these talents together and there is a real
opportunity to use innovation to lever more economic benefit from sport,
exploring new applications for a wide range of research in materials science,
engineering, biotech and other areas.there is a real opportunity to use innovation
to lever more economic benefit from sport.

  6.3    Innovation System Strengthening

  Lead Organisations: City region partnerships; MDDA; Pro-Manchester;
  Chamber, NWDA, IoD and others as identified.

  6.3.1 Open innovation platforms
  Manchester needs to build a globally competitive digital infrastructure, as a
  leading example of the objectives of “Digital Britain”. The infrastructure needs to
  tie together people, spaces, buildings and transport hubs, making wireless
  connectivity ubiquitous. Change must happen quickly – any competitive European
  city must be able to offer cheap and comprehensive access to Next Generation
  Broadband, based on optical fibre and advanced wireless, to innovative
  companies and wider user groups. The starting point for the city region’s Next
  Generation Broadband is the Corridor, Manchester. It will then extend across East
  Manchester acting as a catalyst for wider deployment to other key employment
  sites across the city region including MediaCityUK, to galvanise leading edge
  adoptions and applications and to ensure digital infrastructure can meet
  Manchester’s future needs.

  In parallel with these developments, existing digital infrastructure needs to be
  exploited to the full. Third sector agencies such as People’s Voice Media already
  work to improve digital access within local communities and can be significant
  enablers of increased uptake of digital technology and services along with the
  growth of skills. This is not simply to improve access to public services and
  education/training/employment opportunities, but as a strategic requirement in

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