Innovation is how reindustrialisation can drive good growth, writes Ben Lucas.

Innovation is now central to how Britain can return to a higher level of inclusive growth. We can expect to see this echoed in the Budget, with better-than-expected growth figures for the last quarter underpinned by AI infrastructure development. That is why innovation should be at the heart of regional and local growth plans.

The Growth and Reform Network (a partnership between Metro Dynamics and The Future Governance Forum) hosted an Innovation Nation summit in Manchester earlier this month with Gordon Brown. The former Prime Minister and chancellor has been making a case for the Government to embrace innovation as one of its core pillars for growth. Our summit brought together leaders from science, industry, investment, universities and national, regional and local government, to discuss what needs to be done to make the UK the ‘innovation nation'.

A speech by current PM Andy Burnham at the summit, setting out an overarching innovation mission on dementia research, demonstrates the growing traction of the innovation nation in Government. The opportunity is to turn an abundance of talent and invention across the UK into an abundance of growth and opportunity for people and businesses in every region.

A policy paper for the summit showed that innovation is a reindustrialisation opportunity across the UK. Cities with major research-intensive universities tend to have dense hot spots of knowledge-intensive firms, and many towns and regions contain high productivity sub-sectors, in areas like machine manufacturing, chemicals and minerals. The chancellor's Northern 500 plan is addressed to this ‘Mittelstadt' opportunity, working with the Great North to help scale-up long-established mid-size businesses.

This is an opportunity to bring growth and reform together, mainstreaming innovation to increase the trend rate of growth and to drive the shift to prevention through rapid diffusion. Local, regional and national government should act together as an innovation state supporting demand as well as supply. That means leading with adoption of AI, scaling up clinical trials of breakthrough drugs, holistic approaches to prevention, and determined use of procurement to back British business.

For the Northern 500, and for the high-value frontier clusters, what is important is to be clear-eyed about how to convert these strengths into economic outcomes at the pace that the next decade demands. This calls for five shifts in how we drive innovation: rapid diffusion and adoption of AI and science breakthroughs; backing our frontier industry clusters and connecting these across the UK; supporting our innovative firms to scale and stay; working as one system on execution and delivery and promoting dynamism everywhere to unleash the diversity of talent across the UK, and from around the world.

Mayors and local leaders are going to be given new levers and funding to drive innovation, with devolved local innovation partnership funding and £1bn from UKRI to back the clusters of innovation assets with potential to be world leading.

This is an opportunity to bring growth and reform together, mainstreaming innovation to increase the trend rate of growth and to drive the shift to prevention through rapid diffusion. Local, regional and national government should act together as an innovation state supporting demand as well as supply. That means leading with adoption of AI, scaling up clinical trials of breakthrough drugs, holistic approaches to prevention, and determined use of procurement to back British business.

Building on the PM's announcements on funding for local innovation and for cluster development, a priority should be creating more robust partnerships between university-based science, high-value business sectors, and regional government to create triple helix ecosystems for supporting high-value innovation clusters. To be internationally significant, these need to be scaled into regional corridors of high-growth opportunity.

We already have this with the OxCam Arc, the Northern Growth Corridor, and the North West Supercluster. But there is further work needed to develop the potential of the North East Coast Energy corridor, an advanced manufacturing corridor between the East and West Midlands, the Glasgow-Edinburgh innovation corridor, and the Cardiff Capital Region semi-compound and fintech clusters.

Seizing this moment requires the whole system to deliver. That means developing the capability to support and invest in innovation at regional and national level. No10 North, the Treasury and Department for Business, Innovation, Science and Trade need to work with mayors, councils and businesses to develop a 10-year plan that aligns national industrial and innovation strategy with regional and local growth plans. That's what ‘all together now' for innovation looks like.