A country of clusters

Britain has never been short of ideas. Across the country there are world-class universities, specialist research facilities, Catapult centres, start-ups and established manufacturers working on everything from advanced materials and batteries to medicines, semiconductors and clean energy. Almost every region can point to real innovation strength, and to industries where it competes on the global stage.

A stubborn question remains beneath the UK’s industrial debate: why does a country so good at invention struggle to turn that invention into lasting industrial advantage? The usual answers are funding, skills, infrastructure and regulation, and each of them matters. There is another explanation that gets less attention, and it may sit beneath the rest. The problem may not be a shortage of capability. It may be a shortage of connection.

A country of clusters

One of the quieter successes of the past decade has been the rise of strong regional innovation ecosystems. Mayoral authorities, devolved governments, universities and industry have each worked hard to build a distinctive proposition from local strengths, and the result is a far richer and more deliberate innovation map than the country had a generation ago. That is a genuine achievement, and worth saying before anything else.

The subtlety is that success at the level of the single region can obscure a challenge at the national level. Seen one region at a time, the picture is of real and growing capability. Seen all at once, the gaps tend to appear not inside regions but in the spaces between them.

An innovator needs a pathway

Why that matters is easiest to see through the eyes of the company that has to live within the system. At CPI we see it most clearly in the businesses trying to move from promising science to an investable product: they rarely stall because one isolated capability is missing, but because the route between discovery, development, scale-up, testing and market is harder to navigate than it should be.

An innovator with a promising material, molecule or device rarely needs a single capability. They need a pathway: somewhere to prove the idea, somewhere to make it at pilot scale, somewhere to test and certify it, and a route into a supply chain that will buy it. When that whole pathway exists in the UK, an idea can be de-risked relatively cheaply, developed and scaled with pace, moving to market faster. The company, the jobs and the value stay in the country.

When even one link is missing, the company does not wait for someone to fund it or build it. It goes where the missing step already exists, and the value follows it out of the UK. That is the quiet cost of an uncoordinated system, and it rarely shows up in any single decision. Each innovation infrastructure and capability investment along the way can be excellent and the pathway between them can still be incomplete, because joining them up was no one’s job.

When to compete, and when to coordinate

It would be easy to hear this as an argument for central planning, or for regions to stop competing with one another. It is neither. Competition between places is healthy. It sharpens ambition and drives performance, and it should continue. The real question is what we choose to compete on and what we choose to coordinate.

Manufacturing is worth competing for. The country wants factories, jobs and investment in as many places as possible, and where a plant is finally built is best decided by the things that have always decided it: feedstock and energy, existing suppliers and customers, skills, and the economics of the site. If several regions end up hosting similar manufacturing, that is not a problem to be solved. That is the goal and forms a healthy industrial base across the country providing resilience and economic prosperity.

The innovation infrastructure that sits upstream is a different matter. It is comparatively small, highly specialised infrastructure with highly trained and capable staff, it only pays back nationally when the pieces interlock. When many places invest separately in the same visible capability, the country can find itself paying for it several times over for the same infrastructure, often without a market demand to keep them fully occupied. This creates risk within the ecosystem as the connections between the capabilities, the shared standards, the common testing and validation, the scale-up links, the digital backbone, are funded by no one, because they belong to no single place. The discipline this points to is almost the reverse of the instinct. Compete on the manufacturing. Coordinate and collaborate on the innovation.

Why this matters now

This is timely, not abstract. More innovation funding is being devolved to regional leaders, through programmes such as the £500 million Local Innovation Partnerships Fund, and more industrial-strategy decisions are being taken through place. That is the right direction. It also raises the stakes: if each place invests only through its own lens, the country will end up with stronger regional clusters without necessarily ending up with stronger national supply chains and ecosystems.

We have done this before

None of this is untested. The Henry Royce Institute runs as a single national mission delivered through a hub and a network of spokes, each contributing a specific strength while remaining part of a larger whole. The High Value Manufacturing Catapult, of which CPI is part, works in a related way: independent centres with their own specialisms that increasingly join forces when an industrial challenge calls for capabilities none of them holds alone. More recently, Cambridge and Manchester have begun deliberately exchanging complementary innovation assets across the two city regions, an early attempt to build connective tissue between places rather than only within them.

The lesson running through all of these is encouraging. When collaboration is driven by solving a real industrial problem, geography tends to become secondary, and the focus shifts from who owns a capability to what it is for.

Drones and generic medicines

Consider two examples with almost nothing in common: a drone and a generic medicine. A drone draws on advanced materials for the airframe, battery materials and power electronics, sensors, secure communications, software, testing and final assembly. A generic medicine draws on process chemistry, active-ingredient manufacture, formulation, analytical testing, quality systems and manufacturing at scale. The two could hardly look less alike, yet the shape of the problem is identical: a chain of capabilities that no single discipline, and no single region, can supply alone.

In both, the UK already holds many of the pieces. The task is not to invent them from scratch, but to understand how they fit together, where the gaps are, and whether those gaps are better closed jointly than separately. Unless the pieces form a pathway, a company that finds one step missing still has to leave the country to complete the journey. Seen this way, the conversation moves from individual projects to whole systems, and the guiding question becomes simple: how do we build complete pathways from invention to production? The answer differs by sector. The underlying challenge is consistent.

The barrier that is left

Strip the problem back, and the barrier that remains is not really scientific or industrial. Much of the science exists, the skills exist, and the regional strengths are real. What is weaker is the thing that once held a supply chain together: an organisation with both the reach and the reason to connect research, development, scale-up and end customers into one investable whole. Britain has far fewer of the large anchor firms that used to do that, and in many sectors the connecting role they played has weakened without anything fully replacing it.

That gap is not a failure of any region or institution. It is structural, a product of how the economy has changed, and it is precisely the kind of gap a more coordinated approach is designed to close. A recent report from the House of Commons Science, Innovation and Technology Committee made a related point: that coordination, and better data on where our strengths and gaps sit, matters as much as funding in turning regional strength into national growth. The encouraging part is that most of what a joined-up system would need has already been built and funded. What is missing is the connective tissue between the parts.

What it might take

Closing the gap need not mean anything heavy. It does not require a merger, a single pot of money, or one region leading the rest. At its lightest it could mean three things: a shared, honest map of where the country’s capabilities sit and where the chains break; a habit of weighing regional innovation investment for its national contribution as well as its local one; and a few organisations technically equipped to do the mapping and integration work that connects one region’s strength to another’s. I have taken to using a shorthand for the wider idea, a supercluster: a cluster of clusters that keep their own identity while linking their complementary strengths. The label matters far less than the shift in perspective behind it.

That shift raises real questions worth putting openly. Are we investing enough in the national connective tissue between regional strengths, rather than only in the strengths themselves? Where do the most important gaps in nationally significant supply chains actually sit? How can regions collaborate more without losing the distinctiveness that makes them strong? And how might we measure a regional investment by its national impact, not only its local one? None has a tidy answer, but together they point to a genuine shift in how the country thinks about industrial capability.

Telling the difference

An argument like this cannot be settled by rhetoric. It has to be tested, sector by sector and chain by chain: which capabilities are genuinely national, where the real gaps lie, and whether they are better closed by connecting what already exists than by building something new. This is the kind of work organisations like CPI exist to do, through techno-economic analysis, process de-risking, and demonstrators that prove what is possible before anyone commits serious capital, and by bringing together the universities, Catapults, industry and public partners who will not assemble themselves. Our role is not to claim that everything can or should be made here. It is to help tell the difference, and to help the pieces find each other.

Britain is a country of clusters, and that is a strength. The task now is not to flatten them into a single national system, nor to build ever more of them in isolation. It is to connect them deliberately, so that an idea born in one region can find the capabilities, partners and demand it needs to grow without leaving the country to do it. The ingredients are here. The opportunity is to turn clusters into pathways, and pathways into supply chains to reindustrialise the UK.