eight - Innovation and clustering in the London metropolitan region

Summary

Introduction

This chapter addresses the question of why the London Metropolitan Region (LMR) is home to more innovation than any other single region in the United Kingdom (UK). While functional definitions of the LMR indicate that it extends out from Greater London and incorporates most of the Outer Metropolitan Area (OMA), it is difficult to construct data sets for this precise area. Using only Greater London seriously underbounds any study of the area that functions as a whole. Therefore, for the purposes of this study, we have chosen to use the whole of the Greater South East as the LMR. This probably over-bounds London’s functional daily urban system but has the merit of clearly including the whole of the London regional economy.

We have adopted a widely used European definition of innovation. This is that ‘Innovation is the commercially successful exploitation of new technologies, ideas or methods through the introduction of new products or processes, or through the improvement of existing ones. Innovation is a result of an interactive learning process that involves often several actors from inside and outside the companies’ (European Commission DGs XIII and XVI, 1996, p 54).

The outstanding significance of the LMR with respect to innovation in the UK has been identified by a number of previous studies. These include, among others, Hilpert (1992) who showed that London is one of only ten major ‘islands of innovation’ in Europe. These are defined according to the following criteria:

• • islands which are specialised in more than one of the three studied techno-scientific fields;

• • islands which are covering more than 20 per cent of public R&D expenditures in the country;

• • strong presence in the islands of both research institutions and enterprises;

• • islands which are European ‘knots’ in the web of cooperation links (Hilpert, 1992, p iv).

The rate of innovation in the South East (SE) has been considerably higher than that for any other region in the UK since at least the 1940s. Harris (1988), for example, using a database of significant innovations held at the Science Policy Research Unit (SPRU), University of Sussex, calculated that the level of innovation in the SE was one third higher than the UK average between 1945 and 1983. This database was developed from consultations with 400 industry experts who identified major technological developments. These were located in their respective workplaces.