Why now is the time to reset our approach to innovation investment

Over the last fortnight, it’s fair to say that our new Labour Government has looked to hit the ground running when it comes to addressing its ever-expanding to-do list. Though tackling the ongoing challenges faced by the UK’s science, tech and academic sectors weren’t exactly front and centre of its election campaign messaging, we are seeing this same sense of urgency and impetus applied to the new administration’s revamped Department for Science, Innovation & Technology (DSIT).

Such urgency is very welcome. There is a mounting list of problems that are being faced by the UK’s innovation drivers – high R&D spending firms and our universities being principal among these. As I see it, there are a few intrinsically interlinked challenges that the new Government must get on top of in order to supercharge our innovation sector and help it to realise its massive growth potential.

Grasping the scale of the challenge

In recent weeks, there have been a number of concerning reports on the looming prospect of bankruptcies across the university sector, with 40% projected to be in deficit, according to recent reports by both PricewaterhouseCoopers and the OfS, and as many as a third being forced to cut-back on staff, according to The Times. The prospect of losing research-oriented universities is all too real and one which would deal a devastating blow to the UK’s standing as a leader in innovative and cutting-edge ideas.

This brings me to the second issue. There is a growing sense that whilst the UK is exceptional at delivering bold ideas, we are failing at helping entrepreneurs, innovators and spin-outs to scale their young businesses, and by implication, make a success of their ideas. Our biggest innovators are increasingly of the belief that the grass is greener elsewhere and either delisting their businesses from UK markets, or seeking equity investment from (or even sale to) major international investors. Nowhere is this more apparent than in the ongoing spate of delistings from the London Stock Exchange’s junior market, AIM, with many innovative businesses leaving to seek investment in Europe or the US.

None of this is to say, of course, that foreign direct investment into UK innovation sectors is not an inherently good thing, but rather that there is an imbalance that needs to be redressed and a sense that UK entrepreneurs aren’t supported when looking to take their business to the next level. There is significant wealth in the UK – we just need to unlock the patient capital sources that can best serve the interests of our innovators.

The arrival of a new, entirely fresh Government inevitably provides a natural opportunity for a reset and re-evaluation of how policymakers and the public sector approach these significant challenges, from both policy and funding perspectives.

The role of public sector leadership

In both my current role at Bruntwood SciTech, and in previous roles – including at Innovate UK, part of UKRI – I’ve been privileged enough to see the inner workings of public sector mechanisms for funding innovation in both business and academia. For all the good that the public sector does in these areas, and for all the incredible projects that they fund and co-ordinate, its approach and processes can, at times, be overly bureaucratic – as was widely acknowledged in the previous Government’s review of research bureaucracy.

In a climate where the public purse strings are tighter than ever, and where some might view scientific research or innovation investment as an unnecessary luxury, it’s vital that we make our approach to this area of the economy as efficient, joined-up and as impactful as possible. Shaking the public sector out of its malaise – as the new Government seems to be intent on doing – will be a crucial step in unleashing the pent-up potential within our universities and private sector.

Now is the time to bring expertise into the public sector – and specifically, into DSIT and its affiliated agencies. Simply put, fresh people with unique perspectives bring new ideas to the table. Encouragingly, the new Labour Government seems to be embracing such an approach given the appointment of Patrick Vallance as Science Minister, who I was thrilled to welcome to Manchester Science Park and Citylabs for discussions on greater industry collaboration with Government earlier this week.

Vallance brings unique lived experience to the role, having both been at the heart of the Government’s response to COVID-19, and a crucial grounding in industry with his time presiding over GSK’s R&D function. We can only hope that this is a philosophy they continue to pursue with upcoming appointments for the CEO of UKRI and Executive Chair of Innovate UK.

With the new Government drafting legislation aimed at improving lives through science and tech – as outlined in last week’s King’s Speech – I’d also like to see it better utilise collaborations between the private sector and academia. There is a wealth of expertise that can be unlocked in bringing together academia, the public sector and private sector in what we typically refer to as triple helix partnerships. These are usually collaborative projects with aims to foster economic or social development and that usually focus on specific innovation areas. They are especially effective at unlocking investment for all parties involved. As a useful tool for fostering innovation, investment and growth, the public sector must take a leading role in driving complex projects such as these.

The new Government has a chance with its appointments and unique co-ordination role, to exploit our top business and academic minds and transform how we approach research funding and innovation support. A more entrepreneurial and dynamic public sector would be a good thing for all those in the innovation community, as well as for the country’s ambitions to become a science superpower.