Today, the Growing Together Alliance, a coalition of six leading employers’ groups representing the leading city regions of England including London and the North, has released the Connected Clusters report, outlining a bold and comprehensive strategy for the Chancellor to encourage interconnected, inclusive economic growth across the UK.
Providing an evidence-based framework for unlocking synergies between the UK’s innovation clusters, the report presents a transformative vision around Connected Clusters. By emphasising regional strengths and promoting collaboration, it is a credible plan to ensure the UK remains globally competitive while driving growth that benefits each region and no longer plays the old Treasury game of claiming that growth in one place is simply displaced from another.
The report was launched at the Festival of Flourishing Regions, an event dedicated to exploring the role of regional collaboration in driving economic growth and innovation across the UK. Bringing together policymakers, business leaders, academics, and local stakeholders, the festival provides a platform to share insights and discuss strategies for inclusive and sustainable development. The launch of the Connected Clusters report highlights the importance of fostering stronger links between innovation hubs to maximise economic opportunities across all regions.
Five Drivers of Connected Growth
The Growing Together 2025 Report identifies five core drivers essential to achieving connected and inclusive growth:
- Connected People (Talent and Skills):
Access to talent and skills is identified as a key factor in encouraging innovative companies to establish multiple UK locations. Recommendations include mapping talent pools in regional clusters, expanding access to the innovation economy with devolved skills funding, benchmarking visa costs, and supporting collaborative projects that connect regional talent pools. - Connected Places (Transport):
Physical connectivity is critical for collaboration, economic productivity, and growth. Our report calls for investment in key infrastructure projects such as Northern Powerhouse Rail, East West Rail, and HS2 to Euston, as well as incorporating connectivity goals into the UK’s Ten-Year Infrastructure Plan. - Connected Capital (Innovation Funding):
Increasing domestic innovation capital is vital to prevent companies from relocating overseas. Our suggested interventions include boosting government-curated VC funds, expanding place-based seed funding initiatives like Northern Gritstone, increasing R&D investment to 3.5% of GDP, and supporting regional R&D spending targets set by local leaders. - Connected Leadership (Devolution):
Empowering local leaders through greater fiscal devolution and more extensive decision-making powers is essential for fostering economic collaboration. The report highlights the need for strategic planning, restructuring Local Government, and incorporating deeper fiscal flexibility to align policies with regional economic geographies. - Connected Cultures (Placemaking):
A vibrant culture of innovation and high quality of life are critical to attracting and retaining talent. Our Alliance recommends cross-regional engagement to build collaborative networks, promoting affordable housing, and considering cultural and social infrastructure in regional development plans.
John Dickie, Chief Executive at BusinessLDN, said: “The success of the Government’s growth mission will hinge on a joined-up approach across regions to addressing their distinct infrastructure, skills and funding challenges. Businesses throughout London are already an engine for growth for the whole UK, working with their country-wide supply chains to accelerate innovation and job creation. Greater devolution is vital to supporting collaborative growth, ensuring local leaders have the powers and resources to invest where it is most needed and get the economy firing on all cylinders.”
Chris Curtis MP, Co-Chair of the Labour Growth Group said: “Backing for the Oxford-Cambridge Arc demonstrates the Government’s commitment to driving national growth by unlocking untapped regional potential. This report shows how the benefits can be compounded by fostering and connecting these clusters right across the country, doing so by pooling the expertise of business communities on the ground. Most importantly it provides solutions that are ready-made for the Government to implement. The Labour Growth Group will be looking closely at these recommendations and working with the Growing Together Alliance to ensure the whole country plays its part in our vital mission to bring growth back to Britain, and share in the rewards of that.”
Diane Coyle, Bennett Professor of Public Policy at the University of Cambridge, said: “Economic growth in the UK has long been hampered by policies that fail less productive places outside London and the South East. The government’s focus on growth presents an opportunity to unlock the potential of cities and towns through the industrial strategy, devolution, and skills policies. Successful policies will recognise that growth is a positive-sum game, and that regions do not thrive at the expense of each other.”
Dan Thorp, CEO, Cambridge Ahead, said: “The Chancellor’s announcements today make it crystal clear that the innovation economy is at the heart of Government’s growth mission. The OxCam region has an unrivalled contribution to make to this mission, the growth that infrastructure and housing makes possible in places like Cambridge is truly net additional to the UK. “The new research published by the Growing Together Alliance today provides a plan to ensure the success of places like Cambridge can contribute even more to the success of other cities and regions in the UK, spreading the creation of jobs to more places, and making a meaningful and lasting difference to regional economic success across all corners of the country.”
Dr Kath Mackay, Chief Scientific Officer for at Bruntwood SciTech, the UK’s largest property platform dedicated to the growth of the science, technology and innovation sectors with locations across Manchester, Leeds, Liverpool, Birmingham, Cambridge & London, said: “The Growing Together 2025 Report makes a compelling case for addressing the deep-rooted regional imbalances in R&D funding, which are holding back the full potential of the UK’s innovation economy. While increasing public investment in underrepresented regions like the North is essential, we need to ensure this is also carefully balanced to not cut support to the Golden Triangle. “For too long, regions such as the North have faced barriers to realising their full potential due to imbalanced public funding. This report builds on critical insights from previous research, which has highlighted that uplifting per capita public R&D spending to match the levels seen in London, the South East, and East of England would require at least £4 billion annually, with £1.6 billion needed in the North of England alone. “By devolving a proportion of R&D funding and building capacity for regions to manage these resources, we can ensure solutions that reflect local strengths. Simultaneously, by increasing the UK’s overall R&D intensity we can provide the necessary uplift to avoid a zero-sum game and allow all regions to grow together.”