London innovation cluster needs stronger policy backing, UCL president argues

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London innovation cluster needs backing

Highlights

Michael Spence urges UK policymakers to recognise London, alongside Oxford-Cambridge and Manchester, as a core innovation cluster deserving national growth policy support.
Spence warns funding for state-backed biomedical research centres in London is at risk, threatening advances benefitting the NHS and national economic value.
He argues that diluting funding across all regions could undermine competitive clusters, putting the UK at risk of lagging behind the U.S. and Japan in innovation leadership.

London cluster case gains urgency

As reported by Financial Times, Michael Spence argues that London should be recognised alongside Oxford-Cambridge and Manchester as one of the UK’s key innovation clusters rather than being sidelined in national growth policy. He says north London’s Knowledge Quarter already shows how universities, hospitals, laboratories, investors and startups reinforce each other through close proximity.

Spence describes that concentration as the result of a long build-up rather than a model that can be replicated quickly. He points to institutions including Google DeepMind, the Francis Crick Institute, UCL Hospital and the Alan Turing Institute, and says universities attract talent, businesses follow that talent and investors then follow those businesses.

He supports the argument that governments should back places with a clear competitive edge if the UK wants innovation-led growth and higher private investment. In his view, efforts to decentralise power away from London should not come at the expense of a city that already functions as a world-leading centre for research and innovation.

Funding risks and national spillovers

Spence says the capital remains central to rapid growth because of its role in AI, life sciences, fintech and cultural industries, but warns that funding for several state-backed biomedical research centres is at risk. He argues these centres underpin scientific advances, business creation and medical treatments that are later delivered across the NHS.

He cites UCL spinout Autolus Therapeutics as an example of how London-based innovation spreads economic value beyond the capital, with operations linked to Stevenage and treatment delivery in Manchester. Capital raised in London, he adds, also helps finance companies elsewhere in the country.

Rather than treating major cities as rivals, Spence says connected clusters support each other through supply chains, skills development, research infrastructure and trade. He argues that if funding is spread too thinly across every place, the UK risks falling behind countries such as the U.S. and Japan, which have spent decades building world-class innovation centres.

Our previous report on the UK government’s devolution push outlined plans to shift responsibility for economic growth away from the Treasury and toward the new “Number 10 North” base in Manchester. We noted that the move is intended to rebalance decision-making from Westminster to local and regional authorities ahead of the finance minister’s first budget and a longer-term strategy for constitutional and economic reform.

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