Building the future: LCR’s next generation innovation ecosystem

Innovation ecosystems don’t emerge by accident and no one has license to ‘create them’. They require careful cultivation, strategic alignment and collaboration and the right balance of key components working in harmony.

This need for a collaborative approach to effective innovation inspired the launch of Novel, designed to foster the next generation of innovation leaders in the Liverpool City Region (LCR).

The programme’s second session explored how we can better understand and challenge innovation orthodoxies to generate fresh impact and change.

Partners from CodeBase, in Edinburgh – the UK’s largest tech ecosystem builder – shared insights dissecting what it means to create an ‘innovation ecosystem’ – and the challenges Liverpool City Region faces if we are to realise its growth potential.

Liverpool’s challenge

Metro Mayor Steve Rotherham has been true to his commitment that Liverpool become the best place in the UK to do business. The Liverpool City Region Combined Authority has delivered a rapid modernisation of the region’s “startup and tech” ecosystem, with successes including Baltic Ventures and LCR Angels.

Now, the city region must mature its innovation ecosystem beyond startups and into a world class whole economy model, building high turnover businesses in key sectors. Manufacturing, construction, professional services and creative need to deliver a sea change in culture and capability.

Insights shared by some of the region’s leading CEOs, Managing Directors and business owners at Novel’s second event highlighted two of the greatest issues we face: too much fragmentation across the region and a need to mature the ecosystem.

Like many city regions, Liverpool has ambition – but needs coherence to generate impact. Challenges in innovation and progress require speed, openness and collaboration and this requires leadership. Without input from leaders of successful businesses we will struggle to shape strategy – and stall progress. Our leaders must proactively shape the new generation of innovation ecosystem, rather than waiting for external solutions. This leadership must come from within, reflecting the diverse organisations and industries in the region, as well as understanding the nuances of regional business.

The term ‘ecosystem’ – in the context of innovation – was defined by Y Combinator, the US start-up accelerator and venture capital firm, as “rich people, geeks and a city they both want to live in”.

But today, an innovation ecosystem isn’t just startups and funding – it’s a dynamic system where talent, capital, corporates, government and academia work together.

Novel explored CodeBase’s ‘graphic equaliser’ approach to ecosystem development. Visualising different components like investors, startups, academia, the state, and SMEs as sliders, needing careful calibration to create harmony.

This metaphor resonates with Liverpool’s position. While our city region possesses valuable assets – from world-class universities to a rich industrial heritage – ambition needs to be partnered with greater coherence and collaboration between industries, academia, the state and funding to unlock its innovation potential.

SMEs are the cornerstone of our regional economy – according to the Liverpool City Region Scale Up Ecosystem report, SMEs make up 97.7% of the LCR economy. Stimulating and enabling the next generation of innovation leaders among SMEs and matching them up with the skills, expertise and capital to drive innovation is crucial.

Looking out

Ecosystems grow when they push their ‘local maximum’ – raising the ceiling of what’s possible, not just improving the average.

To requires us to look out – out to national and international level, not just inwards.

A US thesis argues that ‘Europe is a museum’, home to a rich legacy and history – but no innovation today. Creating a regional ecosystem that fosters innovation and growth, which can compete on a national and international scale, can challenge this narrative.

We must recognise that true transformation comes not from isolated interventions, but from creating a harmonious system. One where founders, investors, government, academia and industry can work together to drive sustainable growth collectively.

The ultimate measure of success will be the ability of a collaborative ecosystem to deliver tangible improvements in industrial productivity and efficiency, innovation and economic growth.

Andrew Borland, is Chief Innovation Officer at VEC, the Virtual Engineering Centre at the University of Liverpool. Novel is funded by the UK Shared Prosperity Fund (UKSPF), as part of the existing Horizons project.