It’s time to innovate if Wales is to get ahead
Innovative Welsh businesses must be given a greater opportunity to thrive and the UK Government must commit itself to spending more on research and development to deliver an economy fit for the 21st century.
Evolving innovations, new technologies and developing expertise can help tackle many of today’s greatest challenges, while delivering more jobs and prosperity in Wales.
A new report from the CBI calls for a commitment to spending 3% of GDP on R&D by 2025 – a joint target to be met by the private sector and government.
UK innovation spending is currently at 1.7% of GDP, well below the spending of many international rivals.
With Article 50 just around the corner and international competition catching us up, now is the time for firms to get innovating and get ahead.
Business and government must start thinking what our economy needs to look like in the years ahead and set us on the road to higher spending in R&D.
From self-driving vehicles and medical advances to the next generation of long-life battery energy storage, new technologies will profoundly shape the course of the next decade.
Our business innovators are an essential ingredient to the future success of Wales.
Businesses want to see the new Industrial Strategy Challenge Fund apply to Wales and help spur greater collaboration between different sectors, supply chains, universities and firms of all sizes.
Investing in innovation brings economic and social benefits that help improve lives and communities, meaning more first-rate firms, more jobs and attracting foreign investment.
Welsh businesses have their role to play and while over half of them (53%) consider themselves as “innovation pioneers”, only a quarter (25%) consider UK Government support for firms who want to innovate as world-class.
The UK has a proud tradition of innovation and it’s essential that they continue to get on and show resilience as we strike a new relationship with the EU in the coming years. UK innovation has some great strengths, including groundbreaking research at our universities, but we need to get better at turning these into final products.
IQE is an example of the kind of world-leading manufacturer we want to see in Wales. Compound semiconductor wafers are found inside many of today’s hi-tech gadgets, from smartphones to healthcare technologies.
The company’s advanced materials will become increasingly important across a wide range of new and emerging sectors, including electric and autonomous vehicles, safety and security systems, 3D/gesture recognition and a plethora of sensors that go to make up the so-called “internet of things”.
It has worked closely with academia and government agencies to form dedicated facilities to attract potential supply chain partners in the form of new start-ups and inward investment – with the vision of making Wales and the south-west of England the go-to place for compound semiconductor-enabled technologies.
Across Wales there now exists a cohort of key world-class companies specialising in compound semiconductor technologies, assisted by a Compound Semiconductor Applications Catapult supported by Innovate UK; a Compound Semiconductor Centre, which is a joint venture between Cardiff University and IQE; and an Institute for Compound Semiconductors.
This is along with a number of other initiatives that help give the region the critical mass to be recognised as a cluster.
Practical steps to bolster the science and innovation ecosystem include, firstly, government exploring what long-term incentives could be used to draw and retain science, technology, engineering and maths (STEM) graduates into teaching.
Secondly, we need to ensure regulations are fit-for-purpose in sectors where disruptive firms and technologies are situated, for example travel and technology, to provide greater clarity for start-ups and offer a level playing field.
Thirdly, improvements in public service procurement to allow businesses to help government achieve their aims of improving outcomes and support sustainable public services.
And finally, the UK Government should work with partners across Wales to ensure that the new Industrial Strategy Challenge Fund complements existing initiatives and meets the needs of firms on the ground.
For years, the UK has underinvested and this country’s spending on R&D has stagnated as more countries race ahead.
We want to see a long-term commitment to business and the UK Government spending 3% of GDP on R&D.
We want to see the UK and Welsh governments and business communities putting innovation at the very heart of our economic future. The UK Government has already taken positive steps and the new Industrial Strategy will provide a genuine opportunity to take the next leap forward.
Ian Price is director of CBI Wales.