Closing the productivity gap will require growth in sectors of the economy where West Yorkshire has existing specialisms, while simultaneously developing new frontiers. The region is already the UK’s number one location for tech scale-ups, speaking to the strength of the entrepreneurial ecosystem.
A focused approach to sectors of strength and emerging clusters will maximise opportunities by targeting action to boost innovation, attract investment, unlock capital, drive international activity and support businesses to access new markets.
Within West Yorkshire there are three high-level areas of industry that combine high growth potential and existing regional strengths: emerging tech, advanced manufacturing and the green economy. These opportunities include existing areas of economic specialism and sectors where there is potential to increase exporting, innovation and investment. Engineering sits at the heart of these opportunities as a driver and foundation of growth.
Focused support across these broad areas is needed to ensure the right growth conditions are created. This includes system-wide action and influencing, development of strategic partnerships, focused promotion of unique selling points and alignment of skills needs to regional provision.
The clusters of opportunity in West Yorkshire are based on core sector strengths. Support will be wrapped around to drive growth. Activities will include:
Capacity and support for existing infrastructure across communities will be prioritised to ensure the development of a connected and responsive local ecosystem.
The seven Higher Education Institutions in West Yorkshire have a critical role to play in strengthening these high-growth sectors. They can help to increase the number of high-growth start-ups via spin-outs and graduate enterprises, knowledge exchange, innovation and skills development. University business schools will support business innovation and West Yorkshire is well-placed with leading centres including the School of Management at Bradford, the University of Leeds Business School and assets such as the Knowledge Exchange at Leeds Beckett.
The strong Higher Education partnerships in the region, strengthened by a co-produced Memorandum of Understanding, will drive close working on interventions such as the pilot of Graduates West Yorkshire as well as strategic partnerships with larger employers.
Ensuring the voice of employers is heard in the provision and development of skills and training initiatives will be vital. Working closely with regional clusters will provide key opportunities to ensure businesses with high-growth potential have the skills to innovate and boost productivity, and the opportunity to co-design provision that meets need.
Forums such as the Business Board and Mayor’s Business Council will ensure employers can steer and direct the development of skills and training initiatives, providing businesses with the tools and skills base they need to boost productivity and innovation. Existing regional good practice includes a strong continuing professional development offer such as Leeds Trinity University employer-led skills bootcamps.
Universities, with broad networks and research capabilities, are well-suited to support the development of dynamic, sustainable clusters by acting as central convenors. Innovation clusters, particularly in emerging areas like climate technology face complex, cross-cutting challenges. These challenges benefit from coordinated, mission-led approaches to innovation.
The University of Leeds has developed the Cluster Action Framework (CAF) as part of its strategic and collaborative efforts to drive growth across West Yorkshire’s innovation landscape. The CAF provides a practical, structured framework that aligns diverse groups around shared objectives and fosters coordinated action among stakeholders. Having tested the CAF with ecosystem stakeholders, the University and its Priestley Centre for Climate Futures, in collaboration with the Combined Authority, are piloting the CAF to accelerate the region's nascent climate-tech cluster. They will test how effectively the CAF enables stakeholders to identify and prioritise needs, mobilise resources and create collaborative opportunities.
The CAF will accelerate a climate innovation cluster that brings together businesses, investors, academics and policymakers. It will foster a cohesive network that attracts further investment and develops a supportive environment for scaling climate-tech solutions. Following the pilot, the University and the Combined Authority plan to apply the CAF to other innovation clusters within West Yorkshire. This will include both mature and nascent clusters.
The rich heritage of the strengths within West Yorkshire means it is perfectly positioned to host nationally significant opportunities such as the proposed National Data Library. It is also well-placed to help to deliver data-driven public services and reform.
Hosting the National Data Library in West Yorkshire will optimise the world-leading assets based in the region. This will unlock growth and turbocharge a nationally significant cluster. It will offer infrastructure development and maximise opportunity for further data-driven public service reform.
West Yorkshire is recognised by UK Government’s High Potential Opportunities programme as a world leader in data and artificial intelligence. Major institutional assets include the Leeds Institute for Data Analytics and the Consumer Data Research Centre.
The Connected Bradford Whole System Data Linkage Accelerator was set up to link health, education, social care, environmental and other local government data. It drives learning of health systems, prevention and population health management. Data spanning a period of over forty years has been linked for 800,000 individuals using their pseudonymised NHS number and other data variables. This prospective data collection captures near-real-time activity.
A former power station at Skelton Grange in Leeds will be home to a billion-pound hyperscale Microsoft data centre.
Addressing chronic underinvestment is fundamental to realising ambitions for growth. In particular, West Yorkshire must break down barriers faced by female and diverse founders, who collectively could add £350 billion to the UK economy.
The region’s strength in finance is key to supporting growing businesses to unlock more capital. This includes attracting and enlisting regional angel investor and venture capital networks, as well as building capacity across the ecosystem. As a priority, market failure will be addressed. In addition, where necessary, action will be taken to shape the market.
Central to the success of identified high-growth clusters will be unlocking more capital for businesses. In part, this will be achieved through committing to the establishment of a £3 billion co-investment fund over the next decade to transform the economic landscape, injecting finance into key sites and businesses. This will be achieved by pump-priming and crowding in private investment at scale. The fund will be focused on closing existing gaps in liquidity provision, growing angel investor and venture capital activity and injecting much-needed capital into the economy. The fund will provide blended finance for impact and commercial investment. It will have multiple private providers to promote a more competitive financial supply market within West Yorkshire.
Working in partnership is key to shifting the dial on growth. This will be achieved by progressing co-investment opportunities with key institutional finance providers such as the National Wealth Fund, the British Business Bank and the West Yorkshire Pension Authority, as well as other relevant funders. A key set of principles will be agreed with business-generating stakeholders, such as universities, to maximise future opportunities for West Yorkshire businesses to raise investment for innovative ideas.
Targeted actions will ensure that investment readiness is baked into business support activity across West Yorkshire. It will help to stimulate demand for finance by equipping entrepreneurs with the knowledge and practical support to develop investible propositions. This will build on initiatives such as Northern Gritstone to support spin-out activity.
By unlocking capital and improving growth prospects, West Yorkshire will be the go-to region for high-growth potential domestic companies and those looking at landing in the UK from overseas. Action will include addressing information failure and ensuring all businesses, particularly those in high growth sectors, understand and are ready to access the breadth of the finance options available to support growth.
Innovative approaches will support blended finance, which will unlock green and social impact investing opportunities which benefit investors and communities across the region. Targeted activity will address specific barriers. It will include piloting new finance models to support entrepreneurs in high-growth sectors and tackling the specific finance challenges faced by currently underserved founders. High inclusivity standards for all programmes will be adopted to ensure that founders from every part of West Yorkshire, and from any background, are able to access funding.
The Combined Authority will explore targeted investment solutions where there is a clear gap in the traditional lending landscape, such as debt financing of less than £100,000. It will do this in partnership with the regional finance ecosystem.
Creating an investment fund specifically for the creative industries will build on existing good practice in the sector through the Create Growth programme and provide opportunity for a core sector of strength.
Supporting rapid growth across priority sectors requires the transformation of the West Yorkshire innovation ecosystem. A West Yorkshire Innovation Centre of Excellence will galvanize the triple helix of the public sector, private sector and academia. They will work together to drive the development and commercialisation of ideas. The Centre of Excellence will be underpinned by devolved innovation funding and will provide solutions to some of society’s biggest challenges.
West Yorkshire has a strong position for innovation, as it is home to a dense network of research and development expertise. This includes the seven Higher Education Institutions, along with innovation assets including Nexus in Leeds, and the 3M Buckley Innovation Centre in Huddersfield.
However, the wider infrastructure to focus on the development and commercialisation of innovation across priority sectors needs strengthening. The Innovation Centre of Excellence will stimulate growth of innovation-driven start-ups, spin-outs and scale-ups. It will also ensure the necessary finance and wider support is in place to turbo-charge growth and rapid commercialisation, including higher-risk ventures.
Through the Centre of Excellence, the focus will be on key clusters to address the most pressing societal challenges. This includes the opportunities presented by advanced technologies including generative artificial intelligence, virtual reality and the Internet of Things. This will facilitate the necessary infrastructure to support innovation, including accelerators, incubators and hubs, where the biggest potential exists for impact and economic growth.
The Memorandum of Understanding (MoU) between the region’s universities and the Combined Authority will provide a strategic framework for partnership with the higher education sector. The MoU will support ambitions and strengthen the potential that exists between universities, existing infrastructure, and research and development centres of excellence. It will drive business innovation in the region and accelerate the translation of research into commercialisation.
The West Yorkshire Innovation Network will be transformed into a new triple helix body that brings together academia, industry – especially risk capital and entrepreneurs – and the public sector. The focus will be on rapid development and commercialisation, especially in key sectors and clusters of high-growth opportunity.
Successful regions are those that create a culture of innovation which enable SMEs, larger firms, entrepreneurs and institutions to create, accelerate, champion and retain innovation . Devolution of national innovation funding is critical to achieving these ambitions. Targeting public funding to places will increase the impact of funding.
To succeed, the ambitions will require concerted focus and attention to develop strong and productive relationships with key actors across the region and beyond. Work will continue to strengthen existing mature relationships with Innovate UK, UKRI and the Research Councils. It will also further develop collaboration opportunities such as co-investment.
These partnerships will include joint working to support increased levels of research and development funding. They will enable a more joined-up approach to supporting the region’s businesses. This ambition will benefit from the national research and development and innovation system (and institutions) recognising the increasing value that exists from adopting a stronger place-based approach.
The Local Action Plan highlights areas of strength and positive trends in West Yorkshire, but also flags key issues and challenges that are priorities for future action. It sets out a direction including a longer-term perspective, building upon existing innovation assets and the future development of emerging opportunities. The plan identifies three ambitions to inspire, involve and invest across West Yorkshire. It also identifies three core areas, including innovation support, that are targeted at priority clusters.
West Yorkshire is a critical part of the global supply chain and there are significant opportunities for businesses in the region. The West Yorkshire International Trade Strategy sets out ambitions to support 500 more businesses to actively export on a regular basis and increase the value of exports to £20 billion by 2026.
Exploiting international opportunities is critical to growth, encouraging businesses to explore new markets and providing a compelling offer to attract new businesses into the region. A priority focus is strengthening relationships with key international markets where there are strong opportunities for trade and inward investment, aligned to the region’s priority sectors and cluster strengths. Priority markets include North America, India, Germany, the Nordics and Trans-Pacific Partnership countries.
Foreign investment in West Yorkshire was worth almost £42 billion in 2021, with ambition to increase that to £56 billion by 2030. A priority focus will be attracting new major international investors to establish operations in the region and support existing foreign-owned businesses to expand.
Partnership working will play a central role, engaging with both the Department for Business and Trade and regional experts to create a programme of joint regional and national activity to support trade and inward investment. Trade missions to key markets, such as the Mayor’s 2024 trip to Tennessee, are a powerful way to develop sub-national ties and introduce West Yorkshire businesses to potential partners and clients.
The region’s seven universities are key, having alumni from more than 200 countries and significant research and development expertise. The regional MoU will support a strengthened strategic relationship to deliver on international opportunities.
Through promotion of West Yorkshire as a place 'Where Opportunity Lives’, the region will present a unified and consistent front door. It will work in partnership with a range of regional stakeholders including Chamber International and business representative bodies. Maximising existing global partnerships and developing new networks is critical.
