Northern Powerhouse Investment Fund and Midlands Engine Investment Fund drive SME innovation
A new joint research report titled ‘Backing Innovation-led Businesses: the role of public investment’ reveals how the programmes delivered by the British Business Bank, UK Research & Innovation and Innovate UK play a “fundamental role” in supporting the success of innovation-led businesses.
The report acts as a timely reminder of the importance of securing appropriate funding to help launch companies and initiatives that have the potential to drive the UK forward, whether they emerge from SMEs, universities, or other institutes.
Evidence shows that a high proportion of businesses receiving either debt and equity finance from the Northern Powerhouse Investment Fund (NPIF) and Midlands Engine Investment Fund (MEIF) are using it for innovation purposes.
36 per cent and 31 per cent of businesses in the NPIF and MEIF equity portfolios respectively were ‘research council spinouts’ and/or had received funding for R&D projects from Innovate UK.
The report also references a recent independent evaluation of the Northern Powerhouse Investment Fund which showed that as a result of NPIF funding, 68 per cent of debt recipient respondents reported introduction of more efficient processes and 65 per cent introduced new products or services to market.
Meanwhile, as many as 93 per cent of surveyed equity recipients and 53 per cent of debt recipients reported increased investment in R&D thanks to NPIF finance.
Examples listed in the report include, Slingshot Simulations, a University of Leeds spin-out which allows businesses to use advanced computer simulations to test news ideas and make better decisions. It secured a £500k investment from NPIF – Mercia Equity Finance, to further develop its technology and break into new markets.
Additionally, in Tees Valley, not-for-profit research and innovation centre, Materials Processing Institute (MPI), secured funding worth £750k from NPIF – FW Capital Debt Finance.
The research centre, which focuses on advanced materials, industrial decarbonisation, and waste reduction in the circular economy, used the funding to invest further in its asset base and technologies.
Ken Cooper, managing director, Venture Solutions at the British Business Bank, commented: “The BBB’s regional initiatives are focused on unlocking potential and enabling growth across the UK.
“The findings from this latest report show that innovation and funding go hand in hand, that our funds are finding innovative companies to support from across the UK and, as a result, are having a measurable impact at a regional level.”
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