Industrial Strategy

The Industrial Strategy Challenge Fund (ISCF) is a major, time-limited injection of government investment in research and development (R&D) aimed at stimulating a sustained uplift in industry-funded R&D.

This is one of the key planks of the government’s strategy to meet the target of 2.4% GDP to be spent on R&D by the UK’s combined public and private sector by 2027.

To date, roughly £2.4bn in government funding has been announced across 24 “missions”, or challenge areas, which have been announced in three waves between June 2017 and October 2018. All ISCF spending allocations are expected to be complete by March 2022.

Challenge areas usually consist of several funding competitions, most of which invite applications led by businesses. In most ISCF competitions, academics can partner with industry as part of a consortium. However, some challenge areas also include funding opportunities for academic-led proposals, often published in the usual way by Research Councils.

Although ISCF competitions vary in size and scope, opportunities will generally be most relevant to academics who are already engaged with multiple R&D-active industrial partners and comfortable influencing and working as a partner in an industry-led consortium.

Background: the Industrial Strategy

The government’s move to introduce a “modern industrial strategy” in 2017 was a response to two contrasting dynamics:

  • On the one hand a contextual backdrop of rapidly changing societies, industries and economies across the globe due to transformative foundational technologies such as digitisation, advanced data analytics, artificial intelligence and machine learning, automation and roboticisation, and mass high-bandwidth connectivity.
  • On the other the more specifically British problem of stalled productivity since the financial crash in 2008.

The Industrial Strategy White Paper, published in November 2018, identified five “Foundations of Productivity”: Ideas, People, Infrastructure, Places and the Business environment.

A series of measures was proposed in each of these areas.  For “Ideas”, the three key policies were to:

  • raise total R&D investment to 2.4% by 2027
  • increase the rate of R&D tax credit to 12%, and
  • invest £725m in a new Industrial Strategy Challenge Fund

The Industrial Strategy – and especially the stated aim to raise total R&D investment to 2.4% GDP – has impacted UKRI and the higher education sector far beyond the introduction of the new ISCF funding route.

The “People” strand has built on the Apprenticeships scheme, increased the focus on STEM and introduced T-levels (as a technical equivalent of A-levels).

The “Places” strand has led to the introduction of the “Strength in Places” scheme that promotes innovation within geographical clusters of industry, public bodies and higher education institutions away from the South East.

The “Business environment” strand has led to a number of “Sector Deals” between government and industry that give specific commitments around the five Foundation areas within particular industries such as Life Sciences, Creative Industries and Rail – in some cases leading directly to the creation of major new HE institutes.

Beyond these specific impacts, the Industrial Strategy has played its part in the increasing emphasis within the Higher Education sector’s governance and funding structures on impact (through REF) and knowledge transfer (with the introduction of the Knowledge Exchange Framework (KEF). Universities are now expected to play their full part in reaching 2.4%.

What are the challenge areas?

Twenty-one challenges are organised into four “Grand Challenge” areas:

  • AI & Data
  • Ageing Society
  • Clean Growth
  • the Future of Mobility

Infographic of the four Grand Challenge areas showing which challenges fall under each one, and which are Cross-Cutting challenges

There are also three “cross-cutting” challenges, as well as a number of “underpinning investments”.

Most of the spending under Wave 1 challenges has been allocated; some spending remains to be allocated across Wave 2; and much of Wave 3 is yet to be allocated.

You can see more detail on each of the challenges on the UKRI website.

Who can get involved – and how?

The nature of challenge-based funding is that it is relevant to you when your work feeds into a solution to that challenge. With ISCF the emphasis is also on routes to viable commercial products and services, and much of the funding is for business-led projects.

You are most likely to be in the frame for ISCF opportunities if:

  • your work offers part of a solution to the challenge
  • you have strong relationships with industry partners also developing relevant solutions

ISCF opportunities from both Innovate UK and the Research Councils are distributed at the University of Leeds through the R&I email networks and via the FRICs. ISCF applications to those funding bodies are generally made in the same way as with other applications.

Although there is no set structure for how funding is distributed under ISCF challenges, most challenges tend to fund three types of activity:

  • major ‘demonstrator’-type projects undertaken by large consortia, usually multiple millions in project value. These tend to focus on demonstrating groupings of products and services at scale
  • collaborative R&D projects led by businesses in partnership with SMEs and researchers.
  • small feasibility studies for earlier-stage products and services

Although most challenges invite technological solutions and so will have relevance to those in STEM disciplines, many of the challenges – especially in Wave 3 – are expected to include opportunities for social scientists in looking at issues like adoption, diffusion and user acceptance.

Most of these opportunities will be as part of wider projects, and so accessing them will rely on your networks and connections with industry or other academics.

If you are interested in a particular ISCF opportunity please contact John Parkin to discuss.

What if none of the challenges are in my area?

Currently the fund is time limited and expected to complete spending allocations by March 2022.

A fourth wave of challenges has not been ruled out but is not currently expected.

If there is to be another wave of challenges we would expect an open EOI process inviting industry-led proposals for new challenges (as happened for Wave 3).

If another EOI process for new challenges is initiated, academics who are well connected with cohesive industry groups may be able to influence industry partners to consider putting together a proposal for an ISCF challenge.

Contact us

If you are interested in working with your industry partners to apply, then please contact John Parkin to discuss.