Prizes to kickstart economic growth in the UK
by Ollie Buckley
The Prime Minister’s Kick-Starting Economic Growth mission is really a cross-cutting mission, that either underpins or is impacted by success on the others.
So arguably anything you’re doing to drive innovation, is also a potential enabler of growth.
But I’ve chosen to highlight a couple of ideas that have particular potential to help with spreading economic growth across the country.
And the first of these relates to infrastructure.
Future Rail Prize
Government has committed to modernising our transport infrastructure – and in particular, to overhauling Britain’s ageing railways
And at the heart of that approach is re-nationalisation, the creation of a new organisation called Great British Railways to deliver a unified system. In a huge change from the past 30 years, in which numerous private contractors and operators have managed the network, GBR will be directly responsible for investment and day-to-day operational delivery.
They will also take charge of innovations and improvements for passengers.
But let’s face it, the record of state-run enterprises as engines for innovation is unconvincing to say the least. So this begs the question: where will these innovations come from? And what will incentivise them?
Because it’s interesting to reflect that, for all the flaws of the previous system, one consequence of eliminating competition between the private rail companies is that we may lose a mechanism that the sector had for bringing in people, ideas and organisations from the outside – a key driver of innovation.
So we need to create clear incentives to drive accelerated innovation in our railways.And to that end, I would offer a prize for innovations to develop the railways of the future.
So the Future Rail Prize could be a £5 million prize focused on a specific issue – for example, a prize focused on how to make more trains run on time more often – by tackling the sorts of things that we often hear get in the way. That might be more robust signalling, or novel solutions for tackling leaves on the line, or the wrong kind of snow…
It could be awarded based on criteria including the extent of a solution’s likely impact on reliability, how easily the solution could be implemented with existing or planned infrastructure, and its cost effectiveness.
And I think this prize could make sense because it’s directly addressing a (future) market failure – the loss of clear competitive incentives to innovate. And because a prize could be targeted at specific issues that need to be addressed. And it could provide an opportunity for fresh new ideas from new innovators to shine, in a sector dominated by big engineering firms. (This is exactly the logic behind the Water Discovery Challenge that we r on behalf of the water regulator Ofwat.)
Productivity Partnerships Prize
A second major (and familiar) challenge for the UK is productivity.
The UK’s productivity growth has flatlined since 2008 – meaning the average UK worker’s annual wage is £11,000 lower than if earlier trends had been maintained.
The gap between the average productivity of a UK worker and their US counterpart is 18%.
A major drag on productivity is the reluctance of many smaller UK businesses to embrace technology; this is a problem across the country, but it’s particularly acute outside of London and the South East.
So I’d like to run a new Productivity Partnerships Prize – focused particularly on those companies that have proven most reluctant to embrace new technologies to date.
And it’s called a partnerships prize, because I want to incentivise new collaborations in recognition that this is about more than just tech tools. So it might include, for example, partnerships between local authorities and tech companies; or city-based innovation accelerators and low tech businesses (alongside the more familiar digital-first start-ups that they tend to incubate).
I’d make this a £2.5m prize, with a target of developing replicable interventions that can be shown to boost productivity by at least 20% – thereby demonstrating the potential to close the productivity gap between the UK and US.
And the winning entrant would need to demonstrate both that they can successfully achieve that productivity target, and that their approach can be replicated in other related contexts – that might be within a particular sector, or industry, or across a particular community or region.
This makes sense as a prize. It would shine a light on a thorny issue where we’ve seen little progress. It would focus on underserved parts of the market – where mainstream tech and dissemination approaches are not getting traction. And it’s explicitly designed to encourage new partnerships and collaborations around an old problem.
Reach out
What prizes do you think would help with unleashing growth? If you’re interested in these prize ideas, or others that could support the government’s mission to boost British productivity, get in touch.
