Bridging the city innovation gap to net zero

Overcoming market failures in scaling up net zero solutions across the UK


Technical, cultural, and procedural barriers need to be overcome for local authorities to invest in net zero innovations.

There is an apparent ‘innovation gap’ between local authorities and suppliers of products and services that could facilitate the transition to net zero.

Companies often find it difficult to sell innovative ideas to local government. This is often attributed to a lack of confidence in new technologies, limited experience of dealing with new suppliers, and the difficulty of fitting new solutions into existing processes.

These gaps prevent innovation and create barriers to net zero ambitions.

Solving the problem

Innovate UK commissioned Urban Foresight to analyse this problem and develop a set of tools and recommendations to address it.

The project was designed to help achieve national net zero ambitions and to support Innovate UK in addressing market failures in scaling up the deployment of existing and emerging solutions.

It reviewed the causes and effects of the innovation gap, on both council and company side. This was also considered in the context of different sectors.

It also identified potential responses by Innovate UK to different types of market, as well as recommendations for companies, councils and central government bodies on how to bridge the innovation gap.

Findings were informed by an extensive programme of workshops, desk research, supplier surveys, and an interview programme with companies and local authorities across the UK.

Key outcomes

Demand and supply-side causes of the innovation gap were identified and profiled. This showed that the causes of the innovation gap were more about culture more than technology.

We also developed an interactive digital tool, which organised net zero activities into a framework of classifications. This was supported by a market mapping exercise to show levels of activity in different sectors across the UK.

A second analytical tool was developed to identify what broad categories of future work could bridge the innovation gap. This considered activities of councils, companies, and Innovate UK. Net zero solutions for places were classified in two dimensions: their impact on net zero for places, and the relative maturity of the market. This served to grade a portfolio of 174 identified solutions.

A database of almost 400 companies was compiled and categorised against these solution frameworks. This provided a structured way to appraise different future funding approaches, policy development, and broader thinking on net zero.

The final summary report can be accessed here.


Image credit: Danist Soh