In the Liverpool suburb of Speke, north-west England, stands a factory with a long history of contribution to collective national endeavour.
Set up by the government during the second world war to provide medicine for soldiers and civilians, the British base of biotech company TriRx started life as a penicillin plant.
Almost 80 years later, the facility is once again at the heart of ministerial plans — this time as one of 12 innovation-focused “investment zones” across the country, aimed at boosting the UK’s ailing economic growth.
Each zone will be focused around existing research institutions and industrial clusters, with up to £80mn of support — a mix of grants and tax breaks — available to help attract further jobs and private investment.
Leaders from across local government, business and academia have welcomed the policy, in particular their ability to shape the exact nature of the zones from the ground. But they also warned that the new hubs must translate into wider jobs growth in order for them to be deemed a success.
David Higham, a retired civil servant whose career in northern regional development spanned several governments, said the zones were the latest in a series of policies designed to “build on or leverage scientific excellence”, including under the last Labour administration.
Areas such as south Liverpool already have a “long history” of bio-manufacturing prominence, he said. “So from the north-west perspective this actually looks like a sensible, evidence-based initiative . . . It’s just that there are so many details that need to be worked out.”
Liverpool’s zone seeks to boost its existing pharmaceutical cluster, with ministers encouraged by a £10mn investment recently committed by TriRx to expand its plant.
Tim Tyson, chief executive of TriRx, called the investment zone “incredibly beneficial . . . because it shows the attitude of the government”.
“We’re looking at a place that has a relationship with industry that wants to embrace the growth,” he said of Speke, pointing to a “fantastic” existing ecosystem of biotech research and development in Liverpool and nearby Cheshire and Manchester.
The company’s investment will unlock capacity for the production of the targeted drug therapy monoclonal antibodies, the market for which is expected to grow dramatically over the next decade.
Liverpool’s was the second investment zone to be launched, after South Yorkshire’s was named as the first last month.
The policy has had a rocky start, however, after the original premise announced by former prime minister Liz Truss was ripped up following her departure from office in October.
Truss had proposed an unlimited number of zones — putting her at odds with the Treasury — that incorporated a range of tax breaks and deregulation of matters such as planning, environmental standards and employment rights.
The new iteration is instead limited to a dozen potential areas focused on harnessing higher education and existing industrial clusters to boost growth, underpinned by a loosely defined set of subsidies and tax breaks.
Eighty miles from Liverpool, South Yorkshire’s zone seeks to capitalise on its advanced manufacturing cluster.
The area’s existing Advanced Manufacturing Research Centre — a successful 20-year R&D partnership between the University of Sheffield and industry — received a £29.5mn research grant from the Aerospace Technology Institute last month. It will fund a Boeing-led project to manufacture composite components.
Steve Foxley, chief executive of the AMRC, welcomed the additional boost provided by investment zone status and said the central role of higher education in the policy was key.
“I really think with the investment zones I can attract investment from the industrial partners that we work with,” he said of companies including Boeing, Rolls-Royce, Spirit AeroSystems and McLaren.
The focus on existing economic clusters and the fact individual areas — including those with mayors — had “some autonomy” over how to spend funding “feels different to me”, he added.
Located between South Yorkshire and Liverpool, Greater Manchester has yet to have an investment zone confirmed, as local leaders calibrate the funding and sites they would like to include.
Professor Richard Jones, vice-president for regional innovation and civic engagement at Manchester university and previously a leading figure in South Yorkshire’s AMRC, said there was a balance to be struck between shorter and longer term benefits.
While expanding existing research clusters around Manchester’s Oxford Road corridor would bring quicker gains, there also needed to be parallel longer-term ambitions to develop related manufacturing on larger outlying sites, he said.
Atom Valley, an innovation project earmarked for brownfield land 10 miles from the city centre, is intended to play that role, but requires significant infrastructure upgrades, including a new motorway junction.
“I think there’s a very strong argument for saying ‘we’re going to build a big bunch of knowledge-intensive business around the university’,” he said, but stressed that there needed to be a “considered and thought-through approach” to connect this to future manufacturing jobs, particularly in deprived areas.
The latest iteration of the policy was “a great improvement” on the last one, Jones added, while cautioning against focusing on certain sectors too rigidly.
There is otherwise “a danger”, he said, that such thinking would ignore the nuance and complexity of modern city economies.
Lynda Shillaw, chief executive of the developer Harworth, which is building nearly 4,000 homes adjacent to South Yorkshire’s AMRC, said she would have liked to have seen the new zones take on planning powers as originally intended, to bypass the country’s “massively challenging” planning system.
Echoing Jones, Shillaw, who also sits on the board overseeing Atom Valley, said such zones must actually translate into commercial activity. “If it’s just about science and research and [the research] never gets scaled up in the UK, or in the region that it sits in, then it’s not delivering the job of growth,” she added.
In Liverpool, the city region’s Labour mayor Steve Rotheram said the original investment zone premise had been “madcap”, but that “this one will work” if the region collaborates.
His focus would be on skills and ensuring there is a pipeline of local workers who can staff the area’s growing biotech sector. “All of these wonderful things are happening,” he said, “but it’s no good if we can’t get the people to do the things we need them to do.”
Nevertheless, Higham said the government’s “levelling up” policy, its stated aim of narrowing regional divides dating back to Boris Johnson’s tenure as prime minister, now depended on the policy.
“Investment zones are a policy doomed to succeed,” he said, “because the government needs to point to something — anything — that it’s doing to deliver before the general election.”
