ESRC RCUK Innovation Fellowships

Lead Research Organisation: London School of Economics & Pol Sci
Department Name: Centre for Economic Performance

Abstract

Skills and management practices are important determinants of firm productivity, but the UK has persistent problems in both areas. Recent developments create new challenges. New immigration arrangements following Brexit are likely to make it harder for the UK to access international talent in order to fill skill gaps. In addition, there is a risk that multinationals will find the UK a less attractive destination for investment post Brexit - aside from the direct impact this would have on UK jobs and investment, this is of concern since it has been shown that there are positive spillover effects (both in terms of superior management practices and higher productivity in general) from multinationals to their surrounding firms. Technological change and new working arrangements (such as the rise in self-employment and the "gig economy") are likely to reduce the incentives for firms to train, and policy makers must consider how to ensure that workers are appropriately trained and able to adapt to changes in the labour market.

Under this fellowship, I will investigate in more detail the relationship between different types of skills and firm performance, including management practices, and how the skill needs of British businesses can be met in the future. In particular, I will focus on the following projects:

A. Skills, Organisational Practices and Productivity

1. Human capital, skills and productivity: Firm level analysis will explore the value of different types of skills to business, building datasets and searching for causal research design, and I will also work on a project synthesising what we know about the role of higher education in industrial strategy with respect to improving outcomes for individuals and firms.
2. Business support policies to improve skills and management practices: I would seek to work together with the What Works Centre for Local Economic Growth and willing business partners to find an opportunity to design and evaluate a randomised control trial which would test differing levels of training or other business support interventions.
3. Skills to support new labour market structures and methods of delivery: Based on business or individual survey data, it is possible to ascertain which types of skills will be important to building human capital and labour market adaptability in these contexts. During the fellowship I would like to scope the possibility of a new survey amongst businesses to shed more light on these issues.

B. Understanding the UK Economy

1. Mapping UK Economic Performance: Following on from my previous work on the LSE Growth Commission, I plan to continue work to analyse and understand the differences in economic performance across geography and industrial sectors.
2. Clean Growth and Innovation: I plan to work with CEP and Grantham Institute for Climate Change colleagues on a project that will examine how the low-carbon transition required to fulfil national and international climate change commitments can support and enhance growth opportunities in the UK.

Planned Impact

The research findings and outputs from this work programme will be used to inform and support the Industrial Strategy through active dialogue and dissemination with policymakers, media, businesses and other stakeholders. While the longer term outputs from the academic work will be peer reviewed journal publications, in the shorter term, I will produce working papers or policy reports as set out above.

In recent years I have had extensive contact with policymakers working on productivity and industrial strategy, through invited seminars, events, roundtables and meetings. During this fellowship, I will build on my established links with BEIS, HM Treasury, Cabinet Office and other relevant stakeholders hosting events/seminars or meetings as appropriate. I am keen to collaborate with willing business partners, or businesses and organisations working in this space - such as education providers, education technology firms or consultancy firms more generally.

In order to aid dissemination to relevant stakeholders and the wider public, I will work with the impact team at the LSE Centre for Economic Performance to put together short-term multimedia outputs (blogs, videos) and articles for the in-house magazine, Centrepiece or other publications. I have been interviewed in the broadcast and print media on the topic of productivity and industrial strategy numerous times and I will continue to be responsive to relevant media requests. Together with the other ESRC Innovation Fellow, I plan to help build the new CEP industrial strategy website, with links to relevant work and blogs.
 
Description AI in London's hospitality and retail SME sector
Amount £189,549 (GBP)
Funding ID 22967 
Organisation Innovate UK 
Sector Public
Country United Kingdom
Start 01/2019 
End 12/2019
 
Description AI for SMEs 
Organisation Capital Enterprise
Country United Kingdom 
Sector Private 
PI Contribution This partnership relates to a project funded by the UKRI Business Basics Programme. I have partnered with these organisations to design, deliver and evaluate a randomised control trial (RCT) to understand how to encourage the adoption of AI technologies in SMEs in low productivity sectors (Retail and Hospitality), testing the relative effectiveness of 2 interventions: A light touch event where vendors and SMES get to meet and discuss potential technologies (stream 1) and a caseworker and voucher (stream 2), versus a control group who get only a basic information pack on AI technologies (which all participating firms will receive). In my initial fellowship application (Project 2) I indicated that I was interested in working on a RCT on how to improve management practices in UK firms. In my discussions with key stakeholders trying to set up a collaboration of that type, I came across the opportunity to work with these partners on a Business Basics Programme bid, which we won in October 2018. Our work has now begun, and the funds that have been channelled to the LSE are being used to pay for research assistants to help me in the work (since I am fully funded by the fellowship). I am leading in the academic design and evaluation of the RCT.
Collaborator Contribution GLA: Outreach to SMEs. The communications and outreach will be led and coordinated by the Greater London Authority, who will make use of the London Growth Hub, policy and business networks, and press and social media to ensure we get a high number of SME applicants. Based on previous experience undertaking competition/application-based programmes, we should easily expect to receive sufficient applications. If we do not, then we will encourage applications by further direct outreach into the SME community in London. The GLA will also administer the voucher to qualifying firms in stream 2. CognitionX: Delivery of Stream 1 (events). CX regularly runs events which bring together buyers and AI vendors. CognitionX's experience of corporate adoption of AI over the past 2 years demonstrates intense interest in events showcasing customer case studies and vendor presentations. CX are also producing the basic information pack that all firms in the experiment will receive. Capital Enterprise: Capital Enterprise will deploy an Applied AI Case Worker on this project whose job will be to work exclusively with randomly assigned SMEs in order to advise and support these SMEs to choose the appropriate AI supplier and then to support the deployment of the technology within their firms. The case worker will act as an independent technical adviser as well as helping the SME to firstly calculate the potential productivity gain and establish the economic business case (including investment payback period) derived from the deployment of the AI technology in their business, and then to assist them with any technical related questions.
Impact Our evaluation report will be written at the end of 2019. We are soon to publish our protocol. I presented our planned project at the IGL winter workshop in December 2018.
Start Year 2018
 
Description AI for SMEs 
Organisation Greater London Authority (GLA)
Country United Kingdom 
Sector Public 
PI Contribution This partnership relates to a project funded by the UKRI Business Basics Programme. I have partnered with these organisations to design, deliver and evaluate a randomised control trial (RCT) to understand how to encourage the adoption of AI technologies in SMEs in low productivity sectors (Retail and Hospitality), testing the relative effectiveness of 2 interventions: A light touch event where vendors and SMES get to meet and discuss potential technologies (stream 1) and a caseworker and voucher (stream 2), versus a control group who get only a basic information pack on AI technologies (which all participating firms will receive). In my initial fellowship application (Project 2) I indicated that I was interested in working on a RCT on how to improve management practices in UK firms. In my discussions with key stakeholders trying to set up a collaboration of that type, I came across the opportunity to work with these partners on a Business Basics Programme bid, which we won in October 2018. Our work has now begun, and the funds that have been channelled to the LSE are being used to pay for research assistants to help me in the work (since I am fully funded by the fellowship). I am leading in the academic design and evaluation of the RCT.
Collaborator Contribution GLA: Outreach to SMEs. The communications and outreach will be led and coordinated by the Greater London Authority, who will make use of the London Growth Hub, policy and business networks, and press and social media to ensure we get a high number of SME applicants. Based on previous experience undertaking competition/application-based programmes, we should easily expect to receive sufficient applications. If we do not, then we will encourage applications by further direct outreach into the SME community in London. The GLA will also administer the voucher to qualifying firms in stream 2. CognitionX: Delivery of Stream 1 (events). CX regularly runs events which bring together buyers and AI vendors. CognitionX's experience of corporate adoption of AI over the past 2 years demonstrates intense interest in events showcasing customer case studies and vendor presentations. CX are also producing the basic information pack that all firms in the experiment will receive. Capital Enterprise: Capital Enterprise will deploy an Applied AI Case Worker on this project whose job will be to work exclusively with randomly assigned SMEs in order to advise and support these SMEs to choose the appropriate AI supplier and then to support the deployment of the technology within their firms. The case worker will act as an independent technical adviser as well as helping the SME to firstly calculate the potential productivity gain and establish the economic business case (including investment payback period) derived from the deployment of the AI technology in their business, and then to assist them with any technical related questions.
Impact Our evaluation report will be written at the end of 2019. We are soon to publish our protocol. I presented our planned project at the IGL winter workshop in December 2018.
Start Year 2018
 
Description BEIS/DfE skills lunch roundtable 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact This was an event hosted at the LSE, organised with BEIS and DfE. The aim was to introduce researchers and policymakers concerned with skills. Following my contribution at this event, I made contact with Anthony Impey, founder of "Optimity", who works on digital strategies for SMEs. He invited me to a rountable event at JP Morgan on the topic.
Year(s) Of Engagement Activity 2019
 
Description European Commission, DG Comp State Aid Evaluation Workshop 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact I was invited to be a discussant at a workshop at the European Commission, where I gave a talk discussing two papers on the economic impact of broadband, and put this in the wider evaluation literature, talking about fruitful avenues for future research.
Year(s) Of Engagement Activity 2018
 
Description HMT industrial strategy event at CEP 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach Local
Primary Audience Policymakers/politicians
Results and Impact I was approached by HMT to help organise and host a workshop at the CEP to bring together HMT and CEP researchers to discuss frameworks for assessing potential support for industries. The chosen date was while I was on annual leave, however, I was involved in the organisation.
Year(s) Of Engagement Activity 2018
 
Description IGL Winter Workshop, NESTA 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact I was invited to present the protocol for the "AI for SMEs" project at the IGL winter workshop which is an annual event bringing together academics and policymakers working on RCTs to support businesses around the world.
Year(s) Of Engagement Activity 2018
URL https://www.innovationgrowthlab.org/igl-winter-research-meeting
 
Description Industrial Strategy Council Metrics Workshop 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact Having had discussions with the newly formed Industrial Strategy Council, I was invited to their first formal workshop, which was concerned with developing metrics on which to hold the government's industrial strategy to account. This was an event at Facebook headquarters, bringing together academics, think tanks, policymakers, business and third sector. I was on the "people" table, which was concerned with thinking about how to measure the industrial strategy's performance with respect to skills.
Year(s) Of Engagement Activity 2018
 
Description Interview for Nature Magazing 
Form Of Engagement Activity A press release, press conference or response to a media enquiry/interview
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Media (as a channel to the public)
Results and Impact Interview in person with Jack Leeming, on the literature around how universities affect local economies and implications for Western Australia.
Year(s) Of Engagement Activity 2018
URL https://www.nature.com/articles/d41586-018-07045-1
 
Description Interview in ITPro publication, on AI for SMEs project 
Form Of Engagement Activity A press release, press conference or response to a media enquiry/interview
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Media (as a channel to the public)
Results and Impact Interview about AI for SMEs project, following BEIS announcement of the funding for the first round of the Business Basics Programme.
Year(s) Of Engagement Activity 2019
URL https://www.itpro.co.uk/business-strategy/32860/british-smbs-government-tech-fund
 
Description Interview with Times Higher Education, written up in article 
Form Of Engagement Activity A press release, press conference or response to a media enquiry/interview
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Media (as a channel to the public)
Results and Impact Interview and email exchange, where I advised Rachael Pells on the evidence on the effects of universities on firms.
Year(s) Of Engagement Activity 2019
URL https://www.timeshighereducation.com/features/are-universities-engines-or-products-economic-growth
 
Description Making Digital Work in Small Businesses, Research Roundtable, JP Morgan Chase Foundation 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Industry/Business
Results and Impact This was an event hosted by JP Morgan, involving their research group. It involved business sector representatives and a numebr of representatives from organisations that either represent business, or work with businesses to encourage digital skill development and adoption of productivity enhancing digital technologies. This was a fruitful discussion that informed my thinking on the AI for SMEs project. Following up from this event, I also had follow on contact with a number of participants including the COO of Tech Nation, and a representative of a business support organisation in Wales.
Year(s) Of Engagement Activity 2019
 
Description Roundtable on technology and skills 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact I helped Prof Sandra McNally to organise a CEP roundtable on technology and skills, bringing together academics working on these topics, together with policymakers from BEIS, DfE and HMT.
Year(s) Of Engagement Activity 2018