‘Smart specialisation’ and building links with SMEs

The University of Bath will shortly hear from the UK Research Partnership Investment Fund (UK RPIF) and the West of England LEP, on whether its £50 million bid to build a new Institute for Advanced Automotive Propulsion Systems (IAAPs) facility at the Bristol and Bath Science Park has been successful. The main idea behind IAAPs is to bring together the university’s leading researchers (from the Department of Mechanical Engineering’s Powertrain and Vehicle Research Centre), corporate manufacturers and SMEs to research and develop the next generation of low carbon technologies and more efficient combustion engines, alongside developing electric and hybrid systems and alternative fuels. If IAAPS goes ahead, it is estimated the facility will stimulate £67 million in new research and development between 2020 and 2025. In doing so, the IAAPS facility will seek to conduct transformational research in the automotive industry, to position the UK as a global competitor in the research and design of new environmentally friendly vehicles.

While the IAAPS proposal is primarily geared towards to the automotive industry, it offers the potential to engage with what might be described as a ‘smart specialisation’ process. This is where government funders – in collaboration with other private and public sector actors – identify and fund specific technologies, fields or domains where there is significant potential for technological development, knowledge spill-overs, scale and agglomeration economies and new market opportunities. This is the way in which modern industrial policy is conducted and is outlined in the UK government’s recent Green Paper (2017). The Smart Specialisation policy does not favour particular firms or necessarily sectors per se, but rather revolves around the private and public sectors discovering new opportunities, then identifying and supporting specific activities and/or technological domains with commercial potential.

A ‘smart specialisation’ strategy has a strong regional element, since it seeks to exploit existing regional competences and expertise, while empowering local actors to realise this potential and develop new (technological) specialisms. It is believed that such a ‘place-based’ approach can facilitate dynamic regional growth. If IAAPs goes ahead, it is speculated that it can open up a range of exciting possibilities for firms and other actors (such as scientific researchers) to exploit technological synergies in related sectors, such as aerospace and high tech engineering in which the South West region has existing strengths. Thus, it is hoped that IAAPs will enhance the South West’s cluster dynamic through innovation and improving productivity.

In making the case for IAAPs, it has been important to emphasise how these cluster dynamics may form and evolve within the wider South West region, and, in particular, the role of SMEs within the cluster. Last summer, on behalf of the University, we explored how SMEs might benefit from working with IAAPs and their possible use of the proposed facilities. We conducted a short survey of UK SMEs in both the automotive and aerospace industries. Overall, our results indicate UK SMEs – across both sectors – are positive about the prospect of IAAPS in the South West, seeing it as a conduit for accessing and sharing information relating to new technologies, accessing a wider network of industry contacts, and strengthening their supply chain relationships. Many SMEs also saw IAAPS as an opportunity to enhance their company image and potentially access public-sector funding. These benefits were enhanced further if IAAPS was associated with a global automotive manufacturer and the possibility of commercially oriented networking opportunities and knowledge transfer.

Following on from our research, the university has embarked upon a series of wider engagement initiatives with SMEs, providing more public information on IAAPS and conducting several focus groups with SMES and related stakeholders on designing an IAAPS facility that facilitates a collaborative and open platform for SMEs (and start-ups) that boosts their businesses, attracts new investment and enhances the cluster dynamic. If this can be achieved and the IAAPS facility goes ahead, it promises to be an exciting time for high tech engineering and advanced manufacturing in the South West.