Committees

Call for Evidence

Financing and Scaling UK Science and Technology: Innovation, Investment, Industry

Call for Evidence: Financing and Scaling UK Science and Technology: Innovation, Investment, Industry

The House of Lords Science and Technology Committee is launching an inquiry into Financing and Scaling UK Science and Technology: Innovation, Investment, Industry. We welcome submissions by 23:59, Friday, 9 May 2025. Below we set out some guidance for submissions, background to the inquiry, and the questions in which we are interested.

Guidance for submissions

Some guidance for submissions:

  • Respondents should not necessarily attempt to answer all of these questions. Submissions that provide focused, in-depth responses to one or two questions are often more useful. Sub-questions prompt you to discuss and draw out particular areas of interest, but you do not need to answer them all. Cross-cutting submissions that are guided by the questions are also welcome.
  • We welcome concise submissions that focus on one or two key topics. We welcome concrete, actionable, policy recommendations for Government. Opinions are welcome, as are quantitative evidence, insights, and analysis.
  • An ideal submission would include a first page of bullet points that summarises its key points and policy recommendations.
  • The Committee cannot accept submissions that were not prepared in response to this call for evidence, or that were previously published elsewhere. Use links, citations, and quotes to make us aware of useful published reports or evidence.
  • Full guidance on submissions and how your evidence will be processed will be included as an annex to this call for evidence. Submitters who use generative AI to produce their work should disclose this to us and accept that they have taken ownership and responsibility for the contents of their submission.

Background

Science and technology are essential to the UK’s future prosperity and wellbeing. The UK has a world-class research base, universities, and a growing scene of spin-out and start-up companies. However, the Government acknowledges that the UK “can struggle to translate” its strengths in research, development, and innovation into UK-based companies, and economic growth.[1] The backdrop for this inquiry is fifteen years of meagre growth, despite significant R&D investment, and a wider sense that the UK often fails to capitalise on its excellent science and technology base. This is particularly true when it comes to the establishment of large domestic technology companies, which often start up here but move overseas.

We want to understand why this is happening and how we can fix it, including whether there are international models for science, technology and innovation policy that the UK can learn from.

Finding solutions to this problem is increasingly urgent, and a change in Government presents new opportunities for policy proposals. The UK and its science and technology sector face new challenges from constraints on public expenditure, geopolitical challenges which may shift state R&D expenditure more to defence, and a mix of challenges and opportunities from AI. Key organisations in the UK’s science and technology landscape, such as the Department for Science, Innovation and Technology (DSIT), and the research councils and innovation agencies under UK Research and Innovation (UKRI), are undergoing reform under a new Government. Government strategies, such as the Science and Technology Framework and the forthcoming Industrial Strategy, have attempted to provide solutions, and a range of policy initiatives have been proposed.[2] Does the UK have an appropriate science and technology strategy for this rapidly changing world, and is there appropriate coordination across government, including No 10, the Treasury, DSIT, and wider delivery departments, to implement it?

We are interested in a broad range of issues that span the research, development and commercialisation process, from the earliest technology readiness levels, across the ‘Valley of Death’, and through to the large technology companies that the UK, broadly, lacks. The UK now spends a record amount on R&D.[3] However, the UK’s relative international position in private sector R&D has declined,[4] and many major technology companies that start in the UK ultimately move overseas, particularly to the US. Roughly a third of R&D spend in the UK comes from foreign direct investment––private sector companies headquartered overseas that invest here. But does the UK’s science and technology strategy, and its industrial strategy more broadly, position it to compete for and maximise the benefits to the UK from this investment? How can we incentivise the private sector to invest more in innovative science and technology companies in the UK?

Our inquiry and its priorities

In this context, the Committee is launching an inquiry into Financing and Scaling UK Science and Technology: Innovation, Investment, Industry

We would like to explore strategic questions around the UK’s science and technology priorities; and the role of public sector investment, private sector investment, and governmental policy levers to help scale-up companies and translate basic research into applications that benefit the UK’s public services, society, and economy. We want to hear from science policy experts, entrepreneurs, businesses, researchers, investors, research performing organisations––any stakeholders in this area.

We want to hear from you: what are the fundamental problems in this area? What evidence do you have to support this? What policy solutions do you propose––are there examples of solutions that have worked elsewhere? Your answers may touch on science and technology priorities, skills, regulation and standards, financing, infrastructure, institutions and relationships, and the policies of major players (e.g. Government, the Treasury, Universities, research funders, and the finance sector).

The more detailed questions below cover:

  • The challenges of scaling UK science and technology; international comparisons, and how the Government makes decisions around S&T to maximise benefit to the UK
  • Strategic priorities for UK science and technology in a changing world; cross-government coordination on delivering this strategy
  • The structure of the UK research and innovation landscape and its ability to bridge the ‘Valley of Death’
  • Private sector investors and the UK’s capital markets
  • The role of public sector late-stage investors like the National Wealth Fund
  • The Government’s policy levers (such as procurement) to help companies scale-up.

Respondents may wish to focus on a small subset of these questions. Please note that our priorities may well change as evidence comes in, and our report will focus on the best supported analyses and proposals.

Scaling UK science and technology

1. Translating excellent basic science and technology into global companies has long been recognised as a problem for the UK. Many policy initiatives have tried to address this. What are the key barriers that the Government must address to fix this? What specific policies need to change? Why have previous attempts not succeeded?

a) What lessons can be drawn from international comparators for innovation ecosystems such as the US, Germany, France, Ireland, Sweden, the Netherlands, or Singapore? Which international innovation ecosystems offer the most relevant policy lessons for the UK, and why? Are there specific policies the UK should adopt or case studies from which we can learn?

b) How does the Treasury currently assess the return on science and technology investment and its contribution to the economy, public services and wellbeing? Does Treasury decision-making adequately account for the long-term benefits of science and innovation research? What should be done to ensure the Treasury has the capacity to support a long-term strategy for science, innovation and technology to benefit the UK economy? What can the government do to improve our understanding of R&D in the UK?

c) What can the UK do to ensure that science and technology developed in the UK has the maximum economic and strategic benefit to the UK? Do other countries have policies––for example, in intellectual property––which have allowed them to retain more public benefit domestically?

d) Cultural differences, for example around scientific entrepreneurship, attitude to risk, and relationships between academia, business and Government, are often cited to explain why the UK’s technology sector has not matched the excellence of its basic research. Do you agree with this view, and if so, what can the Government actually do to change the culture?

e) Is the UK at risk of, or experiencing, brain drain for scientists, technologists, and entrepreneurs? How can the Government prevent this, and ensure the UK remains an attractive destination for internationally mobile talent, and actively seek out top scientists and innovators to move to the UK? How can the UK ensure that it trains sufficiently skilled people for its wider science and technology ambitions?

Strategic priorities for UK science and technology in a changing world

2. How should the UK's science and technology strategy respond to ongoing major changes in the economic, geopolitical, and technological landscape?[5] What challenges and opportunities now face the UK's science and technology sector? What policy actions would you prioritise?

a) Is there clear cross-government coordination on delivering the UK’s science and technology strategy, including from the Treasury and central Government as well as DSIT?[6] How could cross-Government coordination be improved?

b) Does the UK Government have the right strategic priorities for its R&D spend? For example, do the five critical technologies identified in the Science and Technology Framework [7] align with the UK’s strengths and weaknesses? What about the emerging prioritisation in the Government’s Industrial Strategy? [8] What implications will a required shift to defence spending in R&D have?

c) Given that the UK cannot be world-leading in everything, which sectors should the UK prioritise (and de-prioritise)? Which sectors offer opportunity for the UK to obtain a strategic advantage, given global supply chains and the nature of the UK economy?

d) Does the current scientific incentive structure, around funding, peer review, and publications, reward high-impact science and technology? How can it be reformed to do so without just adding more bureaucracy to the system? Are there any lessons the UK’s public research funders, such as UKRI and ARIA, can learn from the field of metascience to maximise their impact?[9]

Financing investment in UK science and technology

The UK research and innovation landscape

3. Is the UK’s research and innovation landscape well-structured to support science and technology commercialisation, economic impact, and strategic advantage for the UK?

a) Is there a clear pipeline of investment, across the public and private sector, for science and technology companies that want to bridge the valley of death from initial idea to billion-dollar company––and if not, where are the gaps?

b) How well do the current organisations intended to help early stage commercialisation (such as Innovate UK and the Catapults) perform this task? What could be done to make these organisations more effective?

c) How effective are the UK’s universities at encouraging commercialisation? Has the recent Independent Review of University Spin-outs [10] resulted in positive policy changes?

Private sector investors, companies, and capital markets

4. How can the Government encourage more private-sector investment in R&D, and in R&D intensive companies, including technology start-ups and scale-ups, in the UK? What are the major factors behind the exodus of capital and companies to the US, and is there anything that the UK can do to prevent this? We would welcome case studies from entrepreneurs or investors who have moved abroad, setting out their reasons for doing so.

a) How should the Government encourage multinational technology companies to focus more of their R&D activities and foreign direct investment here? What factors lie behind their reluctance? Does the UK compete sufficiently for this investment?

b) Why don’t major institutional investors in the UK invest more in UK science and technology companies as they scale up? Is there sufficient expertise and understanding of science and technology in the UK finance sector?

c) To what extent is the lack of scale-up capital and UK tech investment due to larger macroeconomic factors (e.g. passive investing, global diversification)? Is there anything the UK Government can do to mitigate these?

d) Are financial regulatory frameworks making London an attractive place for high-growth science and technology companies to IPO and list? What can the UK do to encourage high-growth companies to list here?

Public sector late-stage investors; the National Wealth Fund

5. Are the current major public sector investment vehicles, such as the National Wealth Fund, British Business Bank, and British Patient Capital, sufficiently resourced––in terms of capital, as well as scientific, technological, and financial expertise––to make meaningful scale-up investments in UK science and technology companies? [11] Do they have the mandate to do this? If not, what changes or reforms would you propose?

a) What evidence do we have that these initiatives “crowd-in” investment from the private sector rather than crowding it out? What can the Government do to encourage co-investment with the private sector in priority areas? Does the Government have a clear view of the kind of investor it wants to be?

Government policy levers to support scale-up of science and technology

6. The Government has set out many policy actions in the Science and Technology Framework and elsewhere that it hopes will support the UK’s science and technology sector and scale-up.[12] Are these measures working? Do they address the right problems? What additional policy levers exist for the Government to support scale-up?

a) On public procurement, are the flexibilities provided by the Procurement Act 2023 being used by Government to support UK innovation? Are there international procurement models the UK should emulate?

b) What impact assessment has been made of major Treasury policies such as R&D tax credits? Are recent reforms of R&D tax credits making them more effective at supporting innovation in the UK? The Committee will consider your written evidence alongside oral evidence that it will take over the following months. Our final report will make specific policy conclusions and recommendations to the Government; an example science policy report is here.

ANNEX: Guidance for Submissions 

This is a public call for written evidence to be submitted to the Committee. The deadline for submissions is 11.59pm on Friday 9 May 2025.  

Written submissions should be submitted online, as a Word document. If you have difficulty submitting online, please contact the Committee staff by email at hlscience@parliament.uk or by telephoning 020 7219 5750. 

Short submissions are preferred. Scientific and technical content should be accessible to non-specialist readers. Ideally, responses should not be longer than six pages in size 12 font; please ask if you wish to provide a longer submission.  Any submissions longer than six pages should include a one-page summary.

There is no requirement to answer all questions in your submission. You may tell us about issues that we have not specifically asked about, but that are relevant to the topic of the inquiry. 

All submissions made through the written submission form will be acknowledged automatically by email.

Evidence which is accepted by the Committee may be published online at any stage; when it is so published it becomes subject to parliamentary copyright and is protected by parliamentary privilege. Once you have received acknowledgement that the evidence has been accepted you will receive a further email, and at this point you may publicise or publish your evidence yourself. In doing so you must indicate that it was prepared for the Committee, and you should be aware that your publication or re-publication of your evidence may not be protected by parliamentary privilege. 

The Committee cannot accept any submissions that have not been prepared specifically in response to this call for evidence, or that have been published elsewhere. 

Personal contact details will be removed from evidence before publication, but will be retained by the Committee Office and used for specific purposes relating to the Committee’s work, for instance to seek additional information. 

Persons who submit written evidence, and others, may be invited to give oral evidence. Oral evidence is usually given in public at Westminster and broadcast online; transcripts are produced and published online. Persons invited to give oral evidence will be notified separately of the procedure to be followed and the topics likely to be discussed. 

We will handle the personal data you give us in line with the General Data Protection Regulation and the Data Protection Act 2018, as set out in our privacy notice: https://www.parliament.uk/site-information/data-protection/privacy-notice-for-house-of-lords-select-committee-witnesses/.

Substantive communications to the Committee about the inquiry should be addressed through the Clerk of the Committee, whether or not they are intended to constitute formal evidence to the Committee. Please copy in HLScience@parliament.uk to correspondence.

This is a public call for evidence. Please bring it to the attention of other groups and individuals who may not have received a copy directly. 

Diversity comes in many forms and hearing a range of different perspectives means that committees are better informed and can more effectively scrutinise public policy and legislation. Committees can undertake their role most effectively when they hear from a wide range of individuals, sectors or groups in society affected by a particular policy or piece of legislation. We encourage anyone with experience or expertise of an issue under investigation by a select committee to share their views with the committee, with the full knowledge that their views have value and are welcome.

You may follow the progress of the inquiry at https://committees.parliament.uk/committee/193/science-and-technology-committee-lords. 

 

[1] Invest 2035: the UK's modern industrial strategy - GOV.UK

[2] Including by this Committee: House of Lords - "Science and technology superpower": more than a slogan? - Science and Technology Committee; House of Lords - Don’t fail to scale: seizing the opportunity of engineering biology - Science and Technology Committee; House of Lords - AI and creative technology scaleups: less talk, more action - Communications and Digital Committee; Letter to the Prime Minister on investment in innovative science and technology companies - GOV.UK; David Connell and Bobby Reddy, “Selling Less of the Family Silver”, July 2024

[3] Government backs UK R&D with record £20.4 billion investment at Autumn Budget - GOV.UK

[4] UK companies on list of top R&D spenders almost halves in a decade

[5] These include the current UK economic situation, the renewed commitment to spending on defence and security, political developments in the US and Europe, and technological change from AI, to name a few.

[6] The Science and Technology Framework explicitly assigns responsibilities to individual departments across its ten strands of activity, but is a DSIT document. We are interested in whether there is sufficient coordination between these departments and who should drive this strategy forward.

[7] AI, engineering biology, future telecommunications, semiconductors, and quantum technologies. The UK Science and Technology Framework: update on progress (9 February 2024) - GOV.UK

[8] This identified “eight growth-driving sectors” in a much broader picture than DSIT’s prioritisation exercise, including: advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, professional and business services. Invest 2035: the UK's modern industrial strategy - GOV.UK

[9]Metascience is the scientific study of science and research. The UK’s Metascience Unit describes itself as follows: “All our work starts from a simple idea: that the scientific method, so powerful in so many areas of life, should be systematically and routinely applied to how we practice, fund and support science itself.”

[10] Independent review of university spin-out companies - GOV.UK

[11]The National Wealth Fund was formerly named the UK Infrastructure Bank and will operate “alongside” the British Business Bank. The National Wealth Fund: more than a rebrand? Labour’s £7bn pledge piles pressure on UK Infrastructure Bank to deliver Britain is building a new sovereign wealth fund — what can it learn from the others?

[12]These include, for example:

 

This call for written evidence has now closed.

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