Productivity increases depend upon innovation, runs the mantra. A new report suggests that requires greater investment in boosting manufacturing spaces.
Few manufacturers or, come to it, politicians would argue with the notion that innovation is vital for boosting the UK’s desultory attempts to improve productivity. The logic seems clear enough: better equipment that’s faster and more intuitive and less dependent on day to day human error ought to offer the opportunity to both speed and scale up processes.
It’s a theme that has repeated itself in post-war Britain for decades and doubtless will continue to do so for many more years. Contemporary demographics, however, have added a new urgency and simultaneously sweetened the pill for reluctant employers and employees.
For the available working population is shrinking: lockdown hastened the exit of many older workers before formal retirement age, while the number of incoming young recruits has failed to match the departures. Potential high tech growth areas, meanwhile, need not only more people but upskilled ones.
So, while employers may baulk at added investment on tight margins, they will perhaps view this as future proofing rather than indulgence; while staff who traditionally fear technological advances as a threat to their jobs may have less reason for concern too.
Governments immediately past and present are of broadly similar mind on the need also and, it now seems, prepared to incentivise this movement.
However, a new report published by ISG, Space to innovate: A formula for prosperity, suggests the resource spent upon traditional innovation activities, such as training and IT has been less than effective, asserting “there is little evidence that these investments are delivering a tangible return in either enhanced productivity or sustainable commercial outputs”.
It suggests that the missing element is one normally overlooked by those seeking to improve productivity: physical space.
CEO of ISG Zoe Price explains: “The spatial dimension in the formula for prosperity is perhaps one of the least explored and recognised elements that supports innovation, yet we instinctively understand its importance within certain sectors. The UK was the global leader in the development and successful roll out of the Covid vaccine, and unsurprisingly our analysis shows the fundamental importance this specific sector places on space to innovate.”
She identifies what she describes as a pattern of behaviour that prioritises ‘intangible’ investment over spatial renewal or adaption, representing this as an “orthodoxy that is demonstrably holding back our nation”.
While the assertion may have a Trussian ring to it, reservations about location and room loom large among respondents surveyed in the report, while the prediction that appropriate investment would increase UK turnover by nearly £100 billion is likely to excite manufacturers.
If physical space is the missing ingredient from the recipe for success, then early indications from the King’s Speech should be encouraging, albeit that Labour’s commitment to brownfield building is more publicly focused on homes rather than industry at present.
In support of its case, ISG cites the growth of London King’s Cross – home to the Francis Crick Institute and much else – as well as moves to key UK conurbations, noting that “place/ location is a highly topical trend in the innovation debate”.
And yet, if one focuses on those life sciences which are congregating at King’s Cross and elsewhere, their issue with space seems to be a rather different one. Namely, that the sector is running short of lab sites in the sector heartland of Oxford and Cambridge and so seeking it elsewhere.
The spatial dimension in the formula for prosperity is perhaps one of the least explored and recognised elements that supports innovation, yet we instinctively understand its importance within certain sectors
There’s a related issue too of recruitment. The sought after science grads are less attracted than before to working in the expansive science parks that proliferated in preceding decades. Speed to Market, published last year by Ramboll and the Wates Group, observed that young talent prefers a city vibe to the traditional science ‘fortress’. It’s a trend the likes of developer Bruntwood are cashing in on, fuelled by the pre-Election changes to planning use classes.
And there’s the question of how much the average startup innovator is likely to be seeking capacity spaces, many preferring instead trimmer overheads.
What is more certain is that they want the spaces they have to be agile and adaptable. Ramboll and Wates’ report suggests that research-based labs should rethink their standard 50:50 desk to lab ratio; factoring in a new reserve component, comprising 10-20% of the total, for whatever subsequent demands arise.
So, while space remains an issue in the sense of where a factory or lab is located, it may be premature for developers to hope there will be demand necessarily for those locations to be bigger and bigger. Rather more for them to achieve a much higher bar of flexibility.
