Business in Wales is making the most of the little innovation funding it receives, strengthening the case for pumping more innovation investment into the country.
Research conducted by intellectual property services experts GovGrant has found that businesses in Wales received just 2.83% of Innovate UK funding since 2004. This the third-lowest sum of all UK regions and nine times less investment than the best-funded areas.
How is Innovate UK funding to businesses divided among UK regions?
Over 18 years, ‘the UK's national innovation agency’ Innovate UK has awarded over £5.8 billion in funding to commercial entities. Scotland, Wales and Northern Ireland, the North West and the North East combined have received 21% of the funding awarded — £1.2 billion in total, equivalent to £69 million each year.
By comparison, London has received 24% of the total sum — £1.4 billion, equivalent to £79 million each year. The data raises questions about the allocation of UK innovation funding away from London and the South East, particularly at a time the government is promoting a ‘levelling up' agenda.
What impact has Innovate UK investment had in Wales?
Using key performance measures identified by GovGrant, research found that innovation investment in Wales can have a significant impact.
Post-Innovate UK investment, just over a quarter (28%) of Welsh companies experience a positive impact on their turnover — the second-lowest of all UK regions. Yet, this is still double the number for Northern Ireland, where only one in eight (13%) businesses see greater turnover after investment. The biggest impact on turnover is in the East Midlands, where 44% of companies enjoy increased turnover.
Over half (51%) of companies in Wales increase their net worth following Innovate UK investment, placing Wales 5th out of 12 UK regions.
Wales comes 6th out of 12 regions for the percentage of companies who experience a post-investment uptick in employee numbers, with 35% of companies benefitting in this way. Northern Ireland comes bottom with 22%, while the North East leads, with 47% of companies there hiring more people after investment.
Two companies based in Belfast are among the 50 commercial entities with the most Innovate UK funding, and have brought a combined £58million worth of investment to the capital.
- SHORT BROTHERS PLC, Aerospace manufacturers owned by Bombardier — £32,430,583 — ranked 9th for the most funding
- ARTEMIS TECHNOLOGIES LTD, Maritime design company — £25,672,268 — ranked 13th for the most funding
Luke Hamm, CEO at GovGrant, said:
“Wales has a proud industrial heritage, while esteemed higher education institutes help to position it at the forefront of UK innovation.
“It’s been immensely interesting to see the lid lifted on Innovate UK. And data shows that Innovate UK funding is making a real difference to Welsh business and spurring significant growth. This will only encourage higher levels of investment in the country.
“At a time of serious political and economic unrest, ‘levelling up' is a policy that sees support across the country and from many who voted the current government into power. Unfortunately, levelling up has just become a buzzword used to score votes – instead of being an actionable, sensible and timely approach to regional development.”
Simon Bond, Innovation Director at SETsquared, says:
“Net economic growth can only come from new products, services and markets. Long-term sustainable – NetZero – growth depends on new ways of providing the services that are critical to our country and way of life – food products, transport, heating, lighting, security and healthcare.
“R&D by start-up and scale-up companies is what drives the ‘new’ and is absolutely critical to the UK economy. The good news is that R&D by start-up and scale-up companies is growing – but less positive is that it’s not growing fast enough or among nearly enough of them. The public sector has a key role here to stimulate and de-risk more investment in hard-to-do R&D that doesn’t fit a short-term P&L, but which has a good chance of great value in the longer term. The private sector is also key and must do the heavy lifting, investing in the commercial risk of growth and scaling.”