Issue 18 winter 09

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Innovation today is all about bringing together many pieces of knowledge from many disciplines to see what you get. We can’t go back to the 18th century when individuals, such as pottery entrepreneur Josiah Wedgwood, were able to understand enough disciplines to be lone innovators. The frontiers of knowledge are now so broad that no one can grasp enough interdisciplinary knowledge to break boundaries: it takes groups of people working together.

The context

We’re trying to make this happen in Manchester, which already has many of the building blocks for a successful knowledge economy in place. The science park I run, for example, is currently at 90% occupancy despite the global recession, mainly because many of our tenants are small businesses that trade with other small businesses and have the flexibility to change their business models over a weekend if necessary.

The city has already been through a lot of the pain of restructuring its economy

Why else has Manchester survived the downturn? One reason is that its civic leadership has a positive plan to support innovation. Another is that the city has already been through a lot of the pain of restructuring its economy, when it shed large numbers of manufacturing jobs in the 1980s. What manufacturing remains in the region tends to be lean, high-technology operations serving niche markets. Manchester has also benefited from its lack of company headquarters: there’s only one FTSE100 company based here. This means that our economy has a different mix to that of, for example, London. So we’ve already realised that we need to be a little bit different in order to stand out as a knowledge economy. That’s not to say things in Manchester are perfect: 20 of the most deprived areas of the UK are within the region, and not all of them are making progress. But at least we know that they are there to be dealt with.

Another of Manchester’s strengths is its diversity. It really does make a difference to have people from many different cultural backgrounds in one place, because their backgrounds affect how they think.

The location

Academics already study ‘agglomeration economies’, researching the mutual benefits that derive from many companies, academic institutions and services being in such close proximity that chance meetings can lead to collaboration between companies and disciplines, or stimulate an innovative solution to an old problem. There’s also a growing recognition of the importance of urban density as a home for the kind of tacit, or unspoken, knowledge that nourishes the relationships of trust that are necessary precursors to successful collaborations.

We’re trying to intensify the agglomeration effects in an area of Manchester which runs from the centre of the city straight south along Oxford Road, an area that has been named The Corridor Manchester. The city’s administrators and the university vice-chancellors have realised that this area forms a very well defined concentration of the city’s knowledge base, much like the concentration of industrial and academic research centres that has grown up around Boston’s hospitals.

A formal partnership has been formed to link the city council, the University of Manchester, Manchester Metropolitan University, and the Central Manchester University Hospitals NHS Foundation Trust, with support from the regional development agency. The Corridor is also home to a lot of Manchester’s cultural activities, including two arts centres/cinemas, five museums/libraries, five theatres, eight music and dance venues, and other important venues such as the BBC’s Manchester headquarters and the Royal Northern College of Music.

The partnership estimates that 37,000 people work in The Corridor, many of them in professional jobs, and that the area’s businesses, academic institutions and cultural attractions together earn £3.2bn each year. The trick now is to gain international recognition for the area as a centre of academic and cultural excellence, and regional recognition of its value as a place in which to invest. Developers haven’t yet worked out that the 37,000 well-paid people who work locally represent an excellent opportunity for service providers such as shops and restaurants.

We need to foster a culture that supports the kinds of intangible connections and unplanned meetings

Once we have the links, the partnerships and the amenities sorted out, the key thing that the Corridor will need is an innovation ecosystem, a combination of all the things that make the Cambridge Phenomenon work. The physical aspect of this is about making people want to come to the area, because it’s an attractive and interesting place to live and work. But we also need to foster a culture that supports the kinds of intangible connections and unplanned meetings that underpin a place where innovation can happen.

People and attitudes

Part of Cambridge’s success is due to the attitude of the people who have studied at the University or moved there to live and work, a self-confidence and certainty about the value of the change that they want to create. Manchester people have their own attitude, a determination to just get on with things without waiting for permission to act from other people. So maybe we can replace the Cambridge Phenomenon with the Manchester Method, built on the city and the region’s collective sense of its capacity.

Maybe we can replace the Cambridge Phenomenon with the Manchester Method

Manchester Science Parks, which forms part of the Corridor, is leading an initiative called Animating the Corridor, which is trying to stimulate people’s ambition and promote connections. But this kind of work often revolves around one or two key people: think of Hermann Hauser in Cambridge, or Arthur Rock in Silicon Valley. We still need to find (or recognise) that person for the Corridor.

We’re also trying to encourage people in the surrounding areas, which are economically deprived, to access the activities within the Corridor. I don’t think you can talk about coming out of a recession without taking steps to involve local people in the resultant economic growth, so that they can avoid becoming part of another workless generation. Manchester has received ￡52 million from a UK government initiative called the Future Jobs Fund to guarantee school-leavers six months’ work. We want to use that time to encourage local people to see that jobs in the institutions based in the Corridor, such as the universities and hospitals, are open to them.

Links and enablers

Looking outwards, the city council is already building relationships with Brazil, Russia, India and China so that they are well established as those countries become more significant in terms of global markets and jobs. The Manchester Independent Economic Review, a study of the city’s economy, found that given Manchester’s trading history, surprisingly few companies in the area have international links. Many companies on the Science Park are an exception, but that is to be expected with high-technology businesses serving global markets.

We’re not helped by the government’s choice of assessment criteria for UK Trade and Investment, a department which focuses on boosting trade and inward investment. The criteria tend to focus on increasing companies’ exports and attracting inward investment, rather than on supporting firms’ efforts to collaborate, an important part of spreading innovation.

There are other issues to be overcome to build a fully functioning innovation system in Manchester. Venture capitalists are in retreat, running away from risk like everybody else and trying to preserve their cash to support their existing investees when they need further funding. Manchester has already lost one biotechnology start-up to a funding gap, and the longer the recession continues, the more likely it is that we’ll lose other promising companies.

There’s a lesson for Manchester in what happened to Berlin after the Wall fell. When Germany reunited, policymakers assumed that companies would move their headquarters to the new capital, reviving the city’s fortunes. But Germany’s largest companies preferred to establish political liaison offices in the city and keep their headquarters close to their employees. Berlin had to come to terms with growing a commercial centre from scratch, which it has now done in places such as Adlershof, the City of Science, Technology, and Media.

The lesson is that using inward investment to underpin the commercial activities of a city leaves you at the mercy of corporate strategies set by management boards in other countries. If, instead, you build your commercial sector by providing an environment in which small companies can thrive by drawing on the talents of local people, I think you’re making a much more sensible long-term bet.

Government policy needs to catch up with reality in other ways. There’s a lot of concern about the failure of small to medium-sized enterprises (SMEs) to grow in to global companies, but I am not sure they ever will. There is a change in the perception of what a company is, and I think in future we may have some very large companies, for example the mobile-phone operators with their hundreds of millions of customers, and a lot of SMEs who work with and around them. The era of the large domestic business may be over, so perhaps national policymakers should concern themselves instead with the number of SMEs that exist, their efficiency, innovativeness, and ability to collaborate.

Grand Challenges

Grand challenges can have local solutions

Such long-term thinking is also going to be important in facing some of society’s ‘grand challenges’, such as climate change and an ageing population. But I think grand challenges can have local solutions. For example, Manchester has decided its climate-change policy and is now looking to organisations such as the Corridor initiative to enact those decisions. That’s going to take local collaboration, to upgrade the electricity grid in the Corridor to support both the increased demand for electricity that will go with increased commercial activity, as well as to enable green buildings to feed the power they generate back into that grid.

Grand challenges can also provide business opportunities based on local interdisciplinary collaboration. For example, if Manchester decides that it wants to build a carbon-neutral computer data centre, we can bring together an architect, to design the building; a yacht designer, to help with the fluid-flow issues involved in cooling it; concrete specialists to think about novel heat sinks: and a mediaeval historian who knows how food was cooled before electricity, just to see what (not so) crazy ideas they might come up with.

I’m convinced that a city or region with the right policies and infrastructure can enable the kind of multidisciplinary collaborations that will stimulate innovation and enable local groups to make a difference to the challenges that our society now faces. The trick is to make it happen...

Jane Davies

Chief executive of Manchester Science Park
jane.davies@mspl.co.uk

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