Glasgow City Region is a recognised powerhouse of industry and innovation, and one of the largest regions in the UK. As the birthplace of the key ideas and technologies that drove the industrial revolution, it delivered unprecedented social and economic change across the UK and wider world.  Today, the Region needs to be at the forefront of the fourth industrial revolution, to continue to foster an environment and legacy of innovation and to attract investment and jobs into the industries of the future.

Glasgow City Region’s Intelligence Hub (the Hub) has been instrumental in shaping local policy and plans to ensure the Region remains at the centre of this industrial shift.

This blog looks specifically at the Hub’s ground-breaking work to determine the Region’s specialisms in emerging sectors and industries – to identify the local organisations that are most likely to be the driving force for innovation in new technology, and which  are taking advantage of technological disruption as the global economy shifts to Industry 4.0.

This piece of work has identified the specialisms which will give the Region a competitive advantage and a key edge in the industries of the future, in more detail than ever before. While underpinning work to shape both the Region’s Economic Baseline and Regional Economic Strategy identified local strengths in broad industries, from the use of traditional Standard Industrial Classifications (SIC), this new work provides a first-of-its-kind granular economic evidence base of the strengths, gaps and opportunities for the Region.

By engaging with Regional partners, such as Scottish Enterprise, our business community and our Innovation Districts, and leveraging our expertise in economic analysis, spatial mapping and policy research, the Hub was able to uncover the emerging innovation clusters with the highest potential for growth and investment in the Region.

The approach

Our study commenced with a review of diverse models for cluster development, drawing from influential frameworks including Porter’s Diamond Model, the Innovation Caucus’s Cluster Approach, and BCG’s Catalytic Specialisation Areas. It is important to note that there is not a universal approach to defining clusters. We then developed a bespoke in-house suitable analytical framework, which was endorsed by our partners and the University of Glasgow Policy Lab, which reviewed the Region’s performance in three ecosystems:

• The Business Ecosystem,
• The Investment Ecosystem and
• the Skills and Enabling Infrastructure Ecosystem.

To do this, we used a new dataset provided by the Data City AI-driven platform which encompasses over five million companies throughout the United Kingdom. This dataset characterises companies within the emerging economy and categorises them based on their self-reported activities in real-time industrial classifications (RTICs). This enabled us to see the growth of firms in sectors such as CleanTech and Biotech, something that was not possible before with the use of Standard Industrial Classifications (SICs).  In addition, the evidence baseline drew upon Dealroom investment data, HESA skills data, and ONS data.

The Findings

A mixture of qualitative and quantitative analysis was then used to highlight which sectors have the greatest growth and export potential.  

The analysis identifies five clusters and two categories of specialisms for Glasgow City Region: existing specialisms and emerging specialisms. The five clusters are Health & Life Sciences, Energy & Net Zero, Advanced Manufacturing & Precision Engineering, Digital Creative Industries and Digital and Enabling Technologies & Services. These are illustrated in the chart below.

• Existing Specialisms refer to sectors in which Glasgow City Region possesses distinctive expertise and excels relative to other UK Core City Regions. The include Pharma & Biopharma, BioTech, Precision Engineering and Quantum & Photonics. 
• Emerging Specialisms refer to sectors where Glasgow City Region is exhibiting growing innovation strengths. With further support and investment, these sectors have the potential to develop into specialised areas of expertise. These include CleanTech, Energy Management and FinTech.

Glasgow City Region Innovation clusters and underlying sectoral specialisms

Visualisation also plays a key part in our work. Helping to articulate clusters and bring the analysis to life. Our GIS specialist has developed a suite of bespoke maps that help visualise key economic activity across the Region. The map below shows concentration of economic activity in the Digital Creative Industries cluster across the Region.

Glasgow City Region, Digital Creative Industries cluster

How it has been used to inform policy?

These insights have informed the Glasgow City Region Innovation Action Plan and the Glasgow City Region Investment Zone, both of which will be key drivers of innovation, investment and prosperity for the Region. The Investment Zone is currently being scoped and developed, and will focus specifically on one or more of these clusters which have with enormous growth and investment potential.

Both the Action Plan and Investment Zone have also initiated new discussions and collaborations which will further boost innovation and prosperity within the Region and drive further economic success.

Additionally, this analysis will also be applied at a local level to help local authority partners better understand the strengths of their areas, and steps are being taken to engage beyond the Region with the aim to share best practice with other national, Regional and local organisations conducting similar analysis.