As the UK starts to look for ways to boost the economy and kick-start recovery from Covid-19, could part of the answer lie in unlocking the untapped value of public sector knowledge assets?
Public borrowing has escalated and public services are struggling to cope with demand, so surely now is the time to look for ways of increasing revenues and innovation locked in existing assets, to maximise the investment that can go into frontline services.
It’s estimated that there’s up to £150bn of knowledge assets in the UK public sector. Knowledge assets is the umbrella term given to intangible assets created in the delivery of public services. Assets such as brands, research, data and digital services, skills and organisational know-how are all relevant here. These are public assets, built by Government and its agencies, and there is potential for them to make a vital contribution to public funding as part of the recovery solution.
The recently published HM Treasury report: Getting smarter: a strategy for knowledge & innovation assets in the public sector, The Mackintosh Report, tackles this subject and provides direction for government entities on how to implement a strategy to manage knowledge assets.
We recently hosted an open conversation with expert panellists to discuss the report and explore how the public sector can adopt its recommendations – watch this space to learn what our panel of experts had to say.
The expectation for all government organisations to develop a knowledge asset management strategy is a demanding one but it’s exactly the right thing to do.
It’s time to put more knowledge assets to work to help address the UK’s challenges of borrowing, productivity, its geographically imbalanced economy and its trade deficit. The report, together with the accompanying draft guidance, sets the clear expectation that all government entities can be part of the solution by opening up their portfolio to alternative uses.
This will be no mean feat. The trickiest part will be identifying and appropriately valuing the knowledge assets and their usability. To help address this, Government has set up the Government Office for Technology Transfer along with a network of partner organisations, that will be able to support the identification and development of knowledge assets, delivering training, facilitating early stage funding and helping to overcome the barriers that have previously impeded efforts.
This is a major step forward, however the report stops short of fully addressing the role that the private sector should play to support this enterprise. The UK public sector is a source of innovation, market insight and valuable knowledge. Partnership between public and private could accelerate the process of identifying and valuing knowledge assets, making them commercially viable and ready to scale in market. Partners in the private sector have the skills and experience to identify and develop opportunities at pace, appropriately guiding government partners through this process and expertly navigating funding, risk and investment constraints.
As a long-term strategic partner to government, Capita welcomes the findings in this report. We have long championed the huge underlying potential of publicly owned knowledge assets created in the course of delivering public services. Unlocking this potential will undoubtedly enhance innovation and economic activity, create positive social impact and drive productivity across the country. All this at a time when we desperately need new economic and employment opportunities.
According to our analysis, an estimated return of around £5bn is possible, along with creating up to 20,000 jobs and nurturing export revenues of up to £1bn, if executed at scale. Indeed, this step toward greater innovation could also help to address regional inequalities and strengthen the UK’s future competitiveness in a global economy that is increasingly comprised of knowledge-based industries.
Capita is a first-hand witness to the benefits of commercialising assets to drive revenue for the public sector:
- The Food and Environment Research Agency (Fera), jointly owned with DEFRA provides scientific services to government and commercial customers across the agri-food supply chain, in the UK and overseas.
- Constructionline, a concession within Capita until 2018, provides a digital portal which offers simplified and streamlined pre-qualification procedures to select vetted contractors for construction projects.
- Axelos, a joint venture set up in 2014 by the Cabinet Office and Capita, develops, enhances and promotes a number of best practice frameworks and methodologies. At sale this year, the business was valued at £380m on a cash free, debt free basis.
In each of these instances, Capita has deployed significant investment, expertise and capability to build a scaled, profitable and sustainable operating company from underutilised IP, delivering vital revenues for the public sector.
We want to see the country benefit further by partnering effectively to unlock the potential of the UK’s knowledge assets, build new income streams and drive innovation and growth to support public services in a more sustainable future.
Find out more about how we can help organisations in their response to the report’s recommendations or get in touch: firstname.lastname@example.org.