Project overview

The role of innovation-led growth

Regulation and Innovation in the Foundation Industries

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Project Title: Understanding the regulatory opportunities and barriers to innovation in the Foundation Industries

Capabilities demonstrated: Manufacturing in the 6 foundation industries - paper, ceramics, cement, glass, chemicals, metal. Expert networks development techniques, evidence-based policy making and regulatory science methods.

Client: Amion, for the Foundation Industry Ventures (FIVe) and the Materials Processing Institute.

Date: May 2024 to September 2024

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The job to be done

FIVe commissioned AMION and CIVIKAS to undertake a research project into the regulatory barriers to innovation within the foundation industries. This will support FIVe’s future activities and will provide research-based insights to support future interventions or activities.

 

The primary objective of this research is to gain a deeper understanding of the nature of regulatory barriers that impact innovation in the foundation industries. By identifying these barriers, the research will identify interventions that can make a positive difference to regulatory processes and facilitate innovation.

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This research will also contribute to the body of knowledge on regulatory science, providing valuable insights that can influence future policy and regulatory frameworks.

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The key challenges

The Foundation Industries comprising cement, metals, chemicals, ceramics, paper and glass. All contribute significantly to the UK economy, but each sector faces unique regulatory challenges and innovation dynamics.

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Over a third of businesses in these sectors have not introduced any innovations in the past three years, indicating a significant hesitance to adopt new technologies and processes. This stems from various factors, including regulatory hurdles, high compliance costs and inconsistent regulations which affect each industry at different stages of the innovation lifecycle.

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Whilst each sector faces its own specific regulatory challenges, many issues are common across all industries. Addressing these cross-cutting regulatory barriers is also crucial for fostering a more conducive environment for innovation.​

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Our approach

By understanding and overcoming these obstacles, the Foundation Industries can enhance their competitiveness, support the UK's economic goals and contribute more effectively to the nation's innovation landscape.

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In the 'discovery' phase of this project, we have focused on working collaboratively with over 30 network participants to identify the regulatory challenges faced by industry and research partners.

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To inform this work, we established a series three workshops and separate stakeholder consultations. An initial workshop explored the extent to which regulatory barriers hinder organisational ambitions, innovation and progress to support the network, a second and third workshop identified further priorities and examined potential steps to address these barriers.

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The primary research examined existing regulatory frameworks and their impact on innovation across various sectors. The methodology also encompassed a literature review of existing studies and reports on regulatory barriers to innovation which complemented the primary research.

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Outcome and impact

Understanding sector-specific and cross-cutting themes is essential for creating a balanced approach that supports industry growth and innovation.  Based on the interviews and literature review, we developed:

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1. A draft framework for considering the different regulatory issues. Features of this framework include:

• Three categories of innovation: economic regulations promoting innovation; social regulations, shaping market conditions; and institutional regulations linking the UK legislative arrangements to innovation.

• Ten types of regulation affecting innovation including costs of entry and compliance, environmental protection, pricing and incentives, planning and licensing, health and safety, and intellectual property.

• Dimensions of regulation that act as an incentive or disincentive and how these might be considered at different stages of the innovation lifecycle.

2. A set of policy and regulation recommendations using the framework as the basis for our analysis. Recommendations covered, funding for start-up's, the use of regulatory sandboxes, customer incentives to buyer low carbon products and investments in training.

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FIVe are now using our report as the basis for applying for the next stage of IUK funding. This would enable them to maintain the network and start to design regulatory interventions enabling the foundation industries to overcome barriers and realise opportunities that new regulation represents.​

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