Oxfordshire, Dorset and Teeside beat London for innovation

Ask people to name the most innovative place in Britain and many would say London. But that's not the case according to a new study which found that the capital lags way behind Cambridge, Oxfordshire, Dorset, Liverpool and Teeside when it comes to areas creating new goods and services.

The Enterprise Research Centre (ERC) crunched the numbers after 14,000 firms responded to questions about their innovation activity between 2010 and 2012.

When ranked by Local Enterprise Partnership areas in England and equivalent locations in Scotland, Wales and Northern Ireland, Oxfordshire came out top closely followed by Greater Cambridge, South East Midlands (centred on Milton Keynes) and Gloucestershire.

Researchers said this 'arc of innovation' could be explained by the high concentration of high-end manufacturing companies in those areas.

Contrary to the current focus on the 'Northern Powerhouse' area of Manchester, Teeside was the best performing location in the north. Manchester was a significant way behind in 20th place, while London's innovation rate relative to the number of businesses means it ranked a lowly 25th place.

Eastern Scotland, Northern Ireland and Cumbria were the worst performing regions.

Professor Stephen Roper, who led the research, said: "The findings run counter to the dominant narrative of a country dependent on London, with innovation being much more dispersed across the country than was previously thought.

"Innovation is strongly linked to growth, exporting and productivity; all areas in which the UK economy needs to improve if we want to boost our international competitiveness.

"The significant variation between different parts of the UK suggests that some localities are succeeding in creating a more innovation-friendly environment than others.

"Policymakers and researchers need to examine the local factors that could be contributing to this so that we can create the conditions for firms to become more innovative, creating jobs and growth, in every corner of the UK."

The research focused on six benchmarks of innovative activity:

• Firms engaged in product or service innovation (measured as the proportion of firms reporting the introduction of a new or significantly improved product or service during the 2010 to 2012 period)

• Firms engaged in new to the market innovation (measured as the proportion of product or service innovators reporting that their new products or services were new to the market)

• Firms engaged in process innovation (the proportion of firms reporting the introduction of a new or significantly improved process during the 2010 to 2012 period)

• Firms engaged in strategic or marketing innovation (the proportion of firms reporting new strategic initiatives or changes to marketing concepts or strategies)

• Firms engaged in R&D (the proportion of firms reporting undertaking R&D over the 2010 to 2012 period)

• Firms that were collaborating as part of their innovation activity (the proportion of firms partnering with other organisations as part of their innovation activity)

For the full league table click here.