Geographies of knowledge (and of money)

By Andrew Leyshon, University of Nottingham

Explaining economic geography as an academic sub-discipline in a succinct and understandable way used to be challenging. Not anymore. The victory of the Leave campaign in the UK’s referendum on membership of the EU and the election of Donald Trump to the US Presidency saw geography surface within numerous academic and lay explanations of these unexpected outcomes. For some it was, at least in part, the revenge of those in so-called ‘left behind places’ located beyond the large and successful agglomerations that had become the sites of economic growth in the 21^st century. Both the Leave and Trump campaigns used populism to proffer easy solutions to those in the UK and US who felt excluded by traditional politics and bypassed by successive waves of economic prosperity.

In the UK, the Leave vote was generally accepted as a statement of discontent among populations living beyond London and the South East and in other large metropolitan centres – although, as Danny Dorling has pointed out 52% of people who voted Leave lived in the southern half of England, and 59% were middle class. Nevertheless, the scale of the rejection of the EU in some places – despite many of them being significant beneficiaries of EU regional support – encouraged a recognition that the unbalanced nature of the economy must have played at least some role in the outcome and needed to be addressed. Terms like regionalism and levelling upbegan to circulate in Westminster circles and gradually began to be bolted onto policy initiatives. A commitment to geographical rebalancing was consolidated in the 2019 general election where a large Conservative victory was achieved in part by an unprecedented collapse of the so-called ‘Red Wall’ constituencies, mainly working class areas in the North and Midlands, that had been held by Labour for decades but which changed allegiance to secure the exit from the EU that had been voted for in 2016. This further amplified calls for levelling up and geographical redistribution.

In this context, science funding became a means to deliver more equitable regional outcomes, and research programmes began to be framed within a Place Agenda contained within a new Industrial Strategy. For example, the 2017 AHRC Creative Clusters Programme sought to develop research partnerships between key industrial partners and academic researchers and made a commitment that the final allocation of awards would be geographically distributed across the UK to prevent London, the undisputed centre of creative industry in the UK, capturing all the investment. This was followed by the Strength in Places Fund, which sought to mobilise place-based synergies between Higher Education Institutions (HEIs) and local businesses to encourage near-market innovation. Meanwhile, industrial clusters were identified as critical in a route towards decarbonisation. As an excellent recent report by Tom Forth and Richard Jones on the geography of science funding in the UK reveals, measures that might help a geographical levelling up in research funds is badly needed. Funding is currently acting as a form of reverse regional policy, consolidating the structural advantage of already affluent regions, much in the way that UK defence spending was discovered to have done so over a long period.

Forth and Jones expertly marshal large amounts of official data to make three main claims. First, the UK’s research and development capacity, as measured by spending, is far too low for a country of its size and wealth. In the OECD, science spending averages 2.37 per cent of GDP but in the UK, it is an anaemic 1.66 per cent. Second, it is weak in translational research, which converts basic research into products and services. Third, and finally, spending per capita is highly geographically uneven, and skewed towards the already prosperous regions of London, the South East and East of England.

Anyone who has paid attention to the geography of HEIs in the UK might not be too surprised by this latter finding. The term ‘Golden Triangle’ has been coined to refer to the intensive concentration of powerful Higher Education Institutions based in Oxford, Cambridge, and London (such as Imperial, University College, etc.). Research intensity in London, the South East and East of England, as measured by R&D spending, is higher than the national average, matching these regions’ higher than average share of national wealth and prosperity. Forth and Jones dig deeper into the data to reveal distinctive R&D regions as measured along two types of per capita investment in science research: private, market-led spending on the one hand, and public, non-market-led spending on the other. Market-led spending is provided by businesses. Non-market-led spending is undertaken by the government through UKRI, by charities and universities themselves. The South East and the East of England stand out as the most research-intensive regions, receiving high levels of market-led and non-market-led investment. London, the third part of the Golden Triangle, is also revealed to be a research-intensive region, but a distinctive one: it achieves this status mainly because of high levels of public spending. Indeed, London received a lower level of market-led R&D investment per capita than several other UK regions, including the West Midlands, East Midlands, and North West. If private funding is a market test of research excellence, London is a laggard. Other regions, such as Wales, Yorkshire and the Humber, The South West, North East England, and Northern Ireland, have low levels of market-led and non-market led intensity. Scotland, like London, also receives relatively high levels of public funds per capita, but even lower levels of market-led funds.

Unlike London, the other high research intensity regions at least see non-market-led funding per capita matched by relatively high levels of market-led funding, which would seem to be a mutual reinforcement of the quality of their research. How then to explain the relatively high per capita levels of non-market research investment in London? It could be that HEIs there are simply academically outstanding and so attract a high level of competitive research funding and/or are selectively outstanding in research areas that attract particularly high levels of public research spending. However, while research administrators might like to think that the allocation of funds is place blind, simply awarded to the best researchers in the best institutions, Forth and Jones are sceptical. They cite Robert Merton’s notion of the Mathew effect to suggest that funding accumulates in places that already have a strong science base. Economic geographers would describe this as an outcome of combined and uneven development, where existing inequalities are built upon by successive rounds of investment. But even here, existing research excellence does not explain everything. Forth and Jones draw on figures from the Welcome Trust and Innovate UK to illustrate that if funding were based on 2014 REF scores then funding would be less biased towards London, the South East and East of England than it currently is.

The fact that there is a bias towards London in terms of funding is perhaps not that surprising given that, in contrast to current concerns with levelling up, since at least the 1990s policy debates about location have been relaxed about redistribution and spatial equity and concerned more about global competitiveness. Rather than encourage activities to move out of London and the South East to benefit other places, as in traditional regional development policy, pressure was more to ease regulations in London to allow growth and expansion: as the UK’s most competitive agglomeration it should be supported and invested in, not constrained. But, as the EU referendum revealed, ‘letting London rip’ was not without its consequences. Forth and Jones list a series of practical policy options that policy makers could adopt to ensure that research and development capacity works for the whole of the UK, and not just for the research intensive regions of London, the South East and East England.

But, as the UK looks to rebuild from the economic devastation caused by the Covid-19 pandemic, there has to be some doubt about a willingness to cause additional disruption to a HEI system that will already be creaking under a multi-million income shortfall from the loss of international students reluctant to start their studies in the next year or so. While this caution would be understandable, it may also be a missed opportunity: the UK has pledged to raise research spending to at least the OECD average by 2027, and could do this by building a more resilient, diverse and innovative research and development system. Ensuring that public funding at least matches that of market-led funding seems like a sensible way to build innovative economic capacity from the ground up and will surely be needed more than ever as the economy seeks to recover.

About the author: Andrew Leyshon is Professor of Economic Geography at the University of Nottingham. His work has mainly focused on money and finance, the musical economy, and the impact of digital technology on both. He is the author and editor of numerous books that reflect these interests. They include: Reformatted: code, networks and the transformation of the music industry (Oxford University Press, 2014), which explores how P2P networks and MP3 software helped remake the musical economy, and; Money/Space: geographies of monetary transformation (with Nigel Thrift, Routledge 1997), which argued that not only does money have a geography, but that it is inherently geographical. He is currently investigating the implications of the rise of digital platforms.