Addressing support gap for innovators could unlock regional growth opportunities, NatWest Group report finds
More than 4,500 businesses backed by public innovation grants could deliver a new wave of regional jobs, investment and regional growth if given stronger support to convert innovation into commercial scale, new research by NatWest Group has found.
The report, From innovation to impact: turning the UK’s untapped innovation potential into regional growth, finds that the UK is rich in research, ideas and entrepreneurial talent, but that even greater economic value can be unlocked if innovative businesses are better able to grow, scale and succeed in the places where they were founded.
Since 2011, almost £20bn in public innovation grants has supported more than 12,000 businesses, which have gone on to attract £77.1bn in equity investment — underlining the strength of UK innovation and the economic potential of helping more firms commercialise and scale.
Drawing on analysis of these grant recipients by Beauhurst, the report finds that almost four in ten are still trading but have not yet secured follow-on equity, achieved an exit or shown clear signs of scaling.
A regional breakdown of this data suggests that the challenge is a national one, with the proportion of firms yet to achieve commercial scale ranging from 32.2% in London to 47.4% in the West Midlands.
There are also significant variations in the commercialisation challenge across the four nations of the UK – ranging from 33% in Northern Ireland to 39.6% in Wales.
Paul Thwaite, chief executive officer, NatWest Group, said: “The UK already has many of the foundations required for success: internationally-recognised universities, renowned scientific research, and more unicorn companies than any country outside the USA and China.
“Our report shows that the UK’s full innovation opportunity is hiding in plain sight. In every nation and region of the UK there are countless innovative businesses that have potential but have yet to turn that into commercial growth.
“The chancellor is right to put innovation at the heart of the UK’s growth agenda. If we want more world-leading businesses to start, scale and stay here, we need to remove barriers to growth, strengthen local innovation ecosystems, and give ambitious businesses faster access to the funding, talent and support they need. Helping them succeed can help unlock investment, create high quality jobs and drive growth across local economies.”
Businesses interviewed for the report consistently identified three interconnected factors as being key for successful commercialisation: faster regulatory routes to market, strong local innovation ecosystems and clusters that connect businesses with universities, investors, customers and skills providers, and better access to the capabilities needed to scale.
The report makes five recommendations for national and regional policymakers that would not only support the next generation of innovators but also help existing innovators to achieve commercial success. These include an increase to long-term government investment in commercialisation, complementing the UK’s world-leading research base with sustained support that helps promising ideas to get to market and scale.
Faster and more predictable regulations, including fast-track regulatory pathways in the eight priority sectors of the Industrial Strategy, and an identified single point of contact in each combined authority to help firms navigate existing support, would help to translate ideas into commercial propositions.
Aaron Asadi, CEO of small business support platform and membership community Enterprise Nation, said: “A founder’s chances of turning ambition into commercial scale still depend far too much on their postcode. Closing that gap means pairing national investment with the kind of hands-on, local support that helps businesses convert potential into growth, wherever they’re based.”
Reflecting the report’s call for stronger local innovation clusters to support the commercialisation of ideas, NatWest is today announcing a new Accelerator programme partnership with the University of York’s Life Sciences Incubator.
The 12-week programme aims to accelerate the commercialisation of scientific research by working with up to 10 academics, the majority of whom already have spun out a business from the university and are looking to raise additional investment or increase their revenue.
The programme reflects the bank’s wider commitment to supporting innovators at every stage of growth by connecting research-led businesses with expertise, networks, finance and commercial opportunities that can help them scale successfully.
NatWest supports innovators at every stage of the growth journey, from idea to scale and exit, through its Accelerator community – which combines physical hubs and a digital platform – and its Venture Banking proposition as well as through intellectual property-backed lending and partnerships with universities and innovation ecosystems across the UK. Together, these capabilities connect founders with the finance, expertise, customers and networks they need to scale successfully in the UK.
Case study: New commercialisation pilot with University of York to increase life sciences spin outs launched
Reflecting the report’s call for stronger local innovation clusters to support the commercialisation of ideas, NatWest is today announcing a new Accelerator programme partnership with the University of York’s Life Sciences Incubator.
The 12-week programme aims to accelerate the commercialisation of scientific research by working with up to 10 academics, the majority of whom already have spun out a business from the university and are looking to raise additional investment or increase their revenue.
The programme reflects the bank’s wider commitment to supporting innovators at every stage of growth by connecting research-led businesses with expertise, networks, finance and commercial opportunities that can help them scale successfully.
Kiran Trehan, pro-vice-chancellor for enterprise, partnerships and engagement at the University of York, explains: “We are immensely proud to be launching a bespoke Life Sciences Accelerator with NatWest at the University of York in 2027 — a partnership that puts our researchers exactly where they belong: at the forefront of discoveries that will change lives. The work emerging from our Biology Department has the power to transform how we treat blood cancer and how we tackle industrial water waste at scale — proof that world-class science and world-changing impact can, and should, go hand in hand.
“For too long, ambitious academics have had to choose between running their labs and chasing the business support they need to grow — squeezed into online sessions, or long trips to Manchester and London that sometimes aren’t realistic when your research can’t pause. By bringing NatWest’s expertise directly to our campus, through rich, in-person engagement, we’re removing that barrier entirely.
“This is what real partnership looks like: meeting researchers where they are, backing their ambition, and giving them the tools and confidence to secure the investment that will take their innovations from the lab to the world stage. Our ultimate goal is to increase the pipeline of life sciences spin outs and businesses that can grow in York, driving growth directly into our local economy.”