Regional Innovation, Industrial Policy and UK Interregional Challenges

This paper examines the challenges associated with fostering regional innovation via place-based innovation policies in a context where a country previously had little or no real place-based thinking or policy-framing. The UK displays a combination of both high interregional inequalities and a highly centralisation and top-down governance system. For many years national policy was based on the assumption that knowledge spillover effects from the London economy would naturally diffuse throughout the country, whereas recently there has emerged a realisation that this has not happened. Instead, devolution-related governance reforms are required to foster regional development, but the over-centralisation of the system itself militates against this. Here we discuss the economic development and governance-reform challenges associated with a shift towards more devolved policy making in a setting of good institutions which are ill-designed for the challenge.