Tuesday 05 May 2026 10:47 am
Local growth is not a zero-sum game
By: Dan Thorp
Innovation hubs like Oxford and Cambridge don't operate in isolation. Nurturing their growth will benefit Liverpool, Manchester and Sheffield too, writes Dan Thorp.
Secretary of State Liz Kendall has a mantra: there is no route to stronger growth in this country without innovation leading front and centre. But what is the UK innovation economy? Industrial policy typically conceives of it either as a single national entity or as a landscape of isolated hotspots; think Sector X, City Region Y, or Growth Corridor Z. This misses a crucial point. The latest research from the Growing Together Alliance and The Brunel Centre shows an important reality – that the UK innovation economy is a network of connected clusters. A web of “innovation desire lines” running across the country and fuelling innovation clusters.
How local innovation spreads
Here are two examples. Purple Transform is an Oxford-based AI company that, after a successful funding round, opened a second office in Birmingham – attracted by its manufacturing and engineering talent base, which complemented Oxford’s software expertise. Chemify was spun out of the University of Glasgow in 2021, but its commercial model was shaped decisively with Cambridge – investors with Cambridge connections led the seed round and Astrazeneca (Cambridge-headquartered) became a key client. Connections enable innovation and economic flows, which in turn generate mutual benefits for the clusters involved and strengthen the national economy. But these connections haven’t been given the focus they deserve. Indeed, last month MPs argued the government is “flying blind” on innovation.
Kieron Owen, at the Brunel Centre, and I took the Oxford to Cambridge Growth Corridor as a lens to examine these innovation “desire lines”. We analysed government data, commissioned bespoke research, conducted interviews and were provided with investment data not in the public domain. We found three dimensions. Firstly, venture capital flows. Ox-Cam-based venture capital has invested at least £154m in UK businesses outside of the Corridor since 2016, leveraging over £1bn total investment. Secondly, company movements. After London, Manchester is the most attractive city region for Cambridge’s innovation firms that are moving location to scale. If innovators are moving out of the Golden Triangle to scale, and if there are some hotspots for these landing, this must be compelling for policymakers. Thirdly, R&D collaborations. Since 2017, half of all Innovate UK projects involving an Ox-Cam partner were collaborations with companies outside of the Corridor.
What does this mean for policymaking?
Our work shows local growth across the UK is not a zero-sum game. City-to-city relationships, like Liverpool and Oxford or the innovation links between the Northern Corridor and Ox-Cam are real opportunities for innovation-led growth. There should be a focus on cluster activation. Where place-based investment groups exist, work with these to increase the flow of capital into firms. Where these don’t exist then work with those with experience to create them. For example, Cambridge Angels have supported the creation of angel investor networks in Manchester and Sheffield. The management of clusters is also an ingredient for activation. We argue that there should be more focus on the role of cluster managers, and that mechanisms like business improvement districts could be looked at to fund these where they don’t otherwise exist.
We find that government should target support for clusters across the Northern Corridor, Ox-Cam and London. This represents an unrivalled opportunity for national growth that also addresses historic imbalances in a meaningful and lasting way. This should range from specific support in city regions, through to acceleration of the proposed new Birmingham to Manchester railway. At the same time, Ox-Cam creates “halo” opportunities looking West to places like Swindon and Bristol, and East to places like Ipswich and Norwich. Innovators – both business leaders and investors – are forging their own paths across UK regions and between UK cities. These innovation “desire lines” are gold dust for policymakers looking to stimulate innovation clusters and create high-value jobs in all corners of the UK.
Dan Thorp is the CEO of Cambridge Ahead and a board member at Growing Together Alliance, which brings together seven of the UK’s business representative organisations: Advanced Oxford, BusinessLDN, Business South, Business West, Cambridge Ahead, Northern Powerhouse Partnership, and North West Business Leadership Team.
