British Business Bank—written evidence (ACT0027)

 

House of Lords Communications and Digital Select Committee inquiry:

Scaling Up: AI and creative tech

 

 

Executive Summary

 

The British Business Bank (the Bank) is the UK’s economic development bank, committed to fostering sustainable growth and supporting the transition to a net zero economy by improving access to finance for smaller businesses. In 2023, the Bank deployed £3.5bn of public funding to support UK small businesses, addressing market gaps in debt and equity finance through a range of tailored programmes.

 

The Bank plays a catalytic role in enhancing the UK’s private markets, encouraging UK investors to support high-growth companies to scale within the UK. Firms with substantial UK ownership are more likely to remain in the country, contributing to local economic growth.

 

The focus of this Inquiry, AI and creative tech, can be classified as part of the 'deeptech' and 'R&D-intensive' sectors. These companies are built on significant scientific or engineering advancements and can face long, costly commercialisation processes. The Bank is able to support these businesses through a variety of programmes at various stages of their finance journey.

 

The Bank largely adopts a sector-agnostic approach to investment, not prioritising any specific sector or technology. However, there are exceptions to this: Future Fund: Breakthrough (FF:B), Life Science Investment Programme (LSIP) and the Long-Term Investment for Technology and Science (LIFTS). These programmes have a focus on developing the availability of later stage, scale up capital for their specific sectors. FF:B focuses on R&D intensive industries (deeptech and life sciences), LSIP is dedicated to life sciences and LIFTS’s purpose is to catalyse institutional investment into innovative science and technology companies.

 

Whilst the Bank does not have a dedicated AI or creative tech fund, there is considerable overlap amongst our funds dedicated to backing innovation, which AI and creative tech businesses may benefit from. The AI and creative tech sectors are inextricably connected to life sciences, deeptech and R&D intensive sectors, making them suitable for funding under our funds dedicated to improving access to long-term 'patient' investment finance.

 

To support innovation, the Bank is increasing the availability of patient, scale up capital, helping to bridge the venture capital (VC) funding gap with the US. The Bank’s commercial subsidiary, British Patient Capital (BPC), is the largest domestic investor in UK venture and growth capital funds. Despite the UK’s lag in later-stage growth capital compared to the US, BPC is instrumental in expanding the number and size of VC funds capable of supporting substantial funding rounds, thus helping companies to scale and stay in the UK.

The Bank, as a centre of expertise for small business finance, monitors market trends to inform policymaking and better understand barriers to finance. Although not exclusive to AI and creative tech, regional disparities and gender and ethnicity-based barriers remain significant challenges. For example, academic spinouts, often operating in deeptech and R&D, find it harder to secure equity investment if they are outside the ‘Golden Triangle’ of London, Oxford, and Cambridge.

 

Under its objective to unlock potential, the Bank is working to address these challenges by ensuring entrepreneurs can access the finance they need regardless of where and who they are. Our programmes are more likely to support academic spinouts than the general equity market, and we launched a new generation of Nations and Regions Investment Funds to enhance access to finance across the UK. The Bank is also developing a better understanding of diversity within its investment and lending portfolios to support female and ethnic minority business owners. Our Start Up Loans programme has been particularly impactful, with 40% of loans going to female entrepreneurs and 20% to ethnic minority entrepreneurs.

 

A key theme in this submission is the need to mobilise UK institutional capital to scale domestic businesses. Compared to the US, Canada, and Australia, UK institutional investors, particularly pension funds, invest significantly less in British VC. For example, 10% of Britain’s venture capital pool comes from pension funds, compared to 72% in the US. In Canada, pension funds invest 15 times what UK pension funds invest in Private Equity (PE) and VC. In Australia, Defined Contribution (DC) pension schemes have over 20% in a range of illiquid assets, and that has been the most successful DC programme in the world.

 

In response to this gap, at the International Investment Summit on 14 October, the Chancellor and Secretary of State for Business and Trade announced the Bank will establish the British Growth Partnership. The British Growth Partnership will leverage the Bank’s track record, market access and its position as the largest domestic investor in UK venture capital to encourage more UK pension fund investment into the UK’s fastest growing, most innovative companies. These long-term investments will be made independently of government on a fully commercial basis. In the coming months, the British Business Bank will seek to raise hundreds of millions of pounds of investment for this fund, with the aim of making investments by the end of 2025. This initiative could significantly increase the availability of capital for pioneering deeptech and R&D intensive UK businesses, supporting the country's position as a global leader in innovation and technology.

 


Definitions

 

Artificial Intelligence (AI)

This written submission will refer to the below definitions to describe deeptech and R&D-intensive companies. These definitions have been used in British Business Bank research publications and applied using PitchBook’s technology verticals. The definitions of deeptech and R&D intensive companies include AI as a key sub-sector.

 

Creative tech

The Creative Industries Policy and Evidence Centre defines ‘createch’ as a company that must undertake technology-related R&D which forms a significant part of its business.[1] In the spirit of this definition of ‘createch’, creative tech (as used in this Inquiry) should also be considered part of the broader R&D intensive definition below. While some creative tech companies may not explicitly fall into these categories, given their R&D intensive focus they are likely to face similar growth journeys and access to finance issues.

 

 

 

Deeptech

R&D-intensive

Definition

Companies founded on tangible scientific discoveries or meaningful engineering innovation

Companies attempting to commercialise technologies with long and costly processes

PitchBook Verticals

  • 3D Printing
  • Advanced Manufacturing  AgTech
  • Artificial Intelligence & Machine Learning
  • Augmented Reality
  • Autonomous Cars
  • CleanTech
  • Climate Tech
  • Infrastructure
  • Manufacturing
  • Nanotechnology
  • Robotics and Drones
  • Space Technology
  • Wearables and Quantified Self

 

Excluding any companies in SaaS and fintech verticals

In addition to deeptech sectors listed to left:

 

  • HealthTech
  • Life Sciences
  • LOHAS & Wellness
  • Oncology

 

Excluding any companies in SaaS and fintech verticals

 


Introduction

 

1.                 The British Business Bank, established in 2014, is the UK Government's economic development bank. The Bank has the mission to drive sustainable growth and prosperity across the UK, and to enable the transition to a net zero economy, by improving access to finance for smaller businesses.

 

2.                 The availability of capital to smaller businesses drives economic growth because it enables business investment, innovation, and expansion, leading to increased productivity, job creation, and overall economic development.

 

3.                 We design, deliver and manage access to finance programmes for smaller businesses across the UK that address gaps in the market. As well as increasing the supply and diversity of finance, we raise awareness of the finance options available to smaller businesses. However, they mostly don’t obtain finance directly from us; instead we work through more than 200 delivery partners:

 

 

 

 

4.                 The British Business Bank’s role is catalytic to UK private markets over time and results in more growth companies staying in the UK as they scale, since companies with material UK ownership are more likely to stay in the UK.

 

5.                 From April 2023, the British Business Bank updated its strategic objectives to align with the Bank’s mission and focus on the long-term impact on the market, to help smaller businesses access finance. The Bank’s 2023 strategic objectives include:

 

 

 

 

 

6.                 British Business Bank programmes provide either debt finance, equity finance, or a combination of both finance types to address a breadth of market failures, as outlined in the diagram below:

A diagram with text and images Description automatically generated with medium confidence

 

 

7.                 In August 2024, the Bank published an Impact Report[2] alongside our Annual Report and Accounts. The report looked at how the Bank’s activity in 2023 directly supports the country’s economy, what outputs and outcomes are generated, and what impact we can expect from our activities over the longer term.

 

8.                 In calendar year 2023, the Bank deployed a total of £3.5bn of finance into smaller businesses. This enabled the Bank to:

 

 

 

 

9.                 The expected impacts over the life of this finance are:

 

 

 

 

Bank support for AI and creative tech

 

10.            The Bank adopts a sector-agnostic investment strategy, refraining from prioritising any specific sector or technology. This broad approach allows for a diversified investment portfolio across a range of industries. However, there are targeted exceptions within our suite of funds, namely the Future Fund: Breakthrough (FF:B), the Life Sciences Investment Programme (LSIP), and the Long-Term Investment for Technology and Science (LIFTS). Each of these funds is tailored to address the unique needs of its respective sector, particularly in the provision of later-stage, scale up capital that is crucial for growth and development.

 

11.            FF:B is aimed at supporting R&D intensive industries (deeptech and life sciences). The LSIP focuses specifically on the scale up part of the life sciences sector. LIFTS seeks to catalyse investment into innovative science and technology companies, increasing the supply of capital to UK science and technology scale ups at the later stage.

 

12.            Whilst the Bank does not have a fund exclusively dedicated to AI or creative tech, these industries still benefit significantly from our existing programmes. The FF:B , LSIP, and LIFTS funds share a common emphasis on fostering innovation and supporting companies with the potential for transformative impact. The Bank and others have identified a funding gap for R&D-intensive businesses seeking significant rounds of capital to scale up and accelerate their growth.[3] AI and creative technology businesses, which often require patient, scale up capital to bring their innovations to market, align well with the objectives of these funds, where these technologies are applied in those sectors, and are not excluded from their benefits.

 

13.            For example, there is a strong relationship between AI and life sciences, as AI is increasingly being used to advance research and innovation in the field. AI techniques such as machine learning and deep learning are being applied in various areas of life sciences, including drug discovery and development, alongside more traditional approaches.[4] Creative tech and deeptech have a symbiotic relationship, especially in areas like R&D where deeptech enables creative tech to innovate at a rapid pace. In turn, creative tech drives the adoption and commercialisation of deeptech by applying scientific breakthroughs to consumer-facing products and creative industries. AI, quantum computing, and immersive technologies, are often the backbone that fuels innovation in creative tech industries, allowing for advancements in areas like augmented reality (AR), virtual reality (VR), and digital media production.[5]

 

14.            This makes AI and creative tech approaches suitable for investment through our more targeted funds outlined above, as well as our other funds, where these technologies are being implemented, even if the Bank does not have a specific hypothecated fund exclusively for AI or creative tech.

 

15.            This response will reflect the Bank’s experience as both a market participant and as a centre of expertise on smaller business finance in the UK. As a Government-owned entity, the British Business Bank is not in a position to comment on some of the Inquiry’s questions around future government policy. These questions have been noted in Annex A of this response. The remainder of this response is laid out in accordance with the topics as ordered in the Inquiry’s call for evidence.

 

 

What is the economic potential for improving the UK’s scale up landscape, and what are the consequences of failing to capitalise on this?

 

Summary: The UK has the potential to become more competitive and more investible, leveraging its world-class universities and relatively strong VC market. While the UK has overtaken India as the third largest VC market in the world, we have not closed the scale up funding gap with the USA in key sectors such as life sciences, deeptech and other R&D intensive industries. Companies that receive foreign investment are more likely to exit abroad taking the economic growth and benefits they generate with them. The British Business Bank’s commercial subsidiary, British Patient Capital (BPC) was formed from the Patient Capital Review to address this problem and catalyse the UKs domestic VC market to enable long-term investment in innovative companies across the UK. The Bank is establishing a new investment vehicle, the British Growth Partnership, that will leverage BPC’s expertise and track record as the largest domestic investor in UK venture and venture growth, and open up its commercial capability and investment pipeline to institutional investors. Greater institutional investment into innovative high potential firms could significantly boost economic growth and capitalise on firms making impactful contributions in their communities.

 

Problem: Scale Up Funding Gap

 

16.            The UK is home to world class universities, scientific research and high potential innovative companies. As such, life sciences, deeptech and R&D intensive sectors are important for UK VC investment and have great potential. Despite this, UK life sciences and deeptech companies raise significantly less funding than their US counterparts and are often reliant on overseas investors for growth funding.

 

17.            Due to high research and development costs, breakthrough technology companies typically require more capital than other companies to take their products to market. A lack of access to domestic patient capital continues to hold back some UK companies from scaling up and fulfilling their commercial potential here in the UK.

 

18.            The funding shortfall is particularly acute for British life sciences and deeptech companies in their growth stage, where there are fewer UK investors leading and participating in funding rounds. Companies that received overseas investment were more likely to have exited abroad, representing significant unrealised economic potential for the UK.[6]

 

19.            Our latest Small Business Equity Tracker report confirms that whilst the UK has overtaken India as the third largest VC market in the world and narrowed its overall market gap with the US, sectoral gaps remain in life sciences and deeptech industries. Comparing the UK to the US provides a useful benchmark in assessing whether the market is functioning effectively.[7]

 

20.            In absolute terms the US raised eight times more investment than the UK in 2021-2023 – a significant reduction from 14 times more investment in 2014-2016. When adjusting for the size of the economy, however, the UK now raises the same amount of investment as the US (at 0.97% of GDP). Though encouraging, the analysis suggests this has largely resulted from cyclical fluctuations since the pandemic, and not necessarily because the UK has closed the gap with the US on a structural basis.

 

21.            Looking at UK market gaps on a sectoral basis, the UK performs most strongly in fintech where it deploys twice as much as the US in GDP-adjusted terms. The sectors in which the UK has the largest gap with the US include life sciences, where the US raises 59% more investment on a GDP-adjusted basis, R&D intensive sectors (41%) and deeptech (27%). In these sectors VC investment requires specialist technical and scientific knowledge as well as large pools of patient capital- areas which remain challenges for UK companies seeking to scale.

 

22.            While UK companies have been as successful in progressing to later funding rounds as their US counterparts, they raise less on average at each round. This gap is most acute for later stage funding, with US companies receiving 2.6 times and 2.3 times more at the fifth and sixth rounds respectively. In total, from a cohort of companies raising their first round in 2015-2016, the average US company received a total of £120m in VC funding by its sixth round, compared to £55m for the equivalent UK company.

 

Potential: Building the UK’s innovation economy

 

23.            The UK provides fertile ground for innovation to thrive, but a lack of access to patient capital – particularly capital from domestic sources – continues to hold back some UK companies from scaling up and fulfilling their commercial potential here in the UK.

 

24.            By unlocking billions of pounds of domestic investment for the UK’s high growth businesses, the UK can capture the full commercial potential of its world class breakthrough technology companies.

 

25.            Greater institutional investment into innovative high potential firms could drive the UK’s economic growth and potentially enable UK pension savers to access greater returns, based on tangible investments into firms making impactful contributions in their communities. 

 

26.            As the UK’s largest domestic investor in UK venture and venture growth capital, the British Business Bank is already enabling greater availability of patient capital to help build the UK’s innovation economy and has an existing long-term commitment to growth investment in high potential firms.

 

27.            VC funding is a key driver of innovation in an economy, enabling companies to commercialise solutions which solve societal problems and generate long-term productivity growth. Breakthrough technology companies, and the commercialisation of UK R&D that they embody, are critical to strengthening the UK’s position as a science superpower.

 

28.            These companies have the potential to disproportionately drive productivity and living standards and will support the UK to be internationally competitive in the industries of the future. Many of these companies also help address societal challenges, including the transition to net zero and global health.

 

AI and creative tech

 

29.            Although the Bank does not have a dedicated fund for AI or creative tech, these sectors benefit from the Bank’s existing programmes that emphasise innovation and scale up capital. Through the Bank’s interventions, we are improving the UK’s scale up landscape to support innovative firms, including but limited to AI and creative tech, get access to the capital they need.

 

Intervention: British Patient Capital

 

30.            Launched in June 2018, following HM Treasury’s Patient Capital Review, which identified barriers in accessing long-term finance for growing innovative firms looking to scale up, BPC’s mission is to enable long-term investment in innovative companies across the UK led by ambitious entrepreneurs who want to build successful, world-class businesses.

 

31.            BPC drives the development of high-growth UK companies via commitments to venture and venture growth funds and co-investments alongside fund managers into UK companies looking to scale up.

 

32.            We support many innovative companies through programmes run by BPC:

 

 

 

 

33.            BPC is helping to close the gap between the UK and the US by increasing the availability of later stage growth funding capital in the UK, helping more innovative companies scale up and remain in the UK.

 

34.            BPC is the largest domestic investor into UK venture and venture growth capital funds. Although the UK still lags behind the US in terms of the availability of later stage growth capital for UK companies, BPC is playing a catalytic role in increasing the number and size of VC funds with sufficient scale to support larger funding rounds in UK companies.

 

35.            BPC Annual Report and Accounts 2023[8] shows that BPC has continued to strengthen the availability of long-term patient capital for high-growth innovative companies. Highlights of the Annual Report include:

 

 

 

British Growth Partnership to unleash pension capital into the growth economy

 

36.            One issue that we have long identified as holding back UK economic growth is a lack of UK pension and institutional capital being invested in scaling UK businesses.[9] We welcome the opportunity to assist in addressing this problem through a number of initiatives, building on the impact of BPC.

 

37.            As announced at the International Investment Summit, the Bank is establishing a new investment vehicle, the British Growth Partnership. Subject to regulatory approval, the British Growth Partnership will allow the Bank and institutional investors to invest in innovative companies together, encouraging more UK pension fund investment into the UK’s fastest growing, most innovative companies.

 

38.            Leveraging the British Business Bank’s market expertise, these long-term investments will be made independently of government on a fully commercial basis. In the coming months, the British Business Bank will seek to raise hundreds of millions of pounds of investment for this fund, with the aim of making investments by the end of 2025.

 

39.            By unlocking domestic investment for the UK’s high growth businesses through the British Growth Partnership, the UK can capture the full commercial potential of its world class breakthrough technology companies.

 

40.            To date, industry reaction to this initiative has been positive, with eight pension providers managing total assets of over £350bn, acknowledging that such a vehicle could be a valuable addition to the market.

 

41.            Another initiative the Bank has launched is the Long-Term Investment for Technology and Science (LIFTS). LIFTS aims to unlock additional investment for smaller businesses, and in particular the UK’s fastest growing and most innovative companies, while also enabling the UK’s pension savers to benefit from the value created by UK innovation.

 

42.            Taken together, the British Growth Partnership and LIFTS have the potential to unlock billions of pounds of additional investment for the UK’s fastest growing and most innovative companies, thereby boosting the economy while also driving returns for pension savers. They also have major implications for the way that the Bank will operate. Further details on the impact of these initiatives is outlined later in this submission.

 

 

 

 

What specific barriers do SMEs face when seeking to scale in AI, and in creative technology? To what extent are these challenges unique to their respective sectors? What role does access to finance play?

 

Summary: SMEs in the AI and creative tech sectors face numerous barriers to scaling including limited access to capital, talent shortages, insufficient data and tech infrastructure. As a centre of expertise for small business finance, the Bank’s Small Business Equity Tracker and Small Business Finance Markets reports give a detailed insight into the barriers facing small businesses in access to finance. Regional and place-based barriers remain an issue in access to finance, and ethnic-minority and female business owners remain underserved. These barriers may not be unique to the AI and creative technology sectors, but ensuring all small businesses have the access to finance they need to scale is vital for innovation and the UK’s economic success. A challenging equity environment is a potential barrier for AI and creative tech businesses, with the scale up VC gap with the US still a problem in the deeptech and R&D-intensive sectors.

 

Specific SME Barriers in AI and creative tech

 

43.            SMEs in the AI and creative tech sectors face several barriers when scaling:[10]

 

 

 

 

 

 

 

44.            These factors combine to make scaling challenging without targeted support or access to specialised resources.

 

45.            In addition, deeptech companies are a particularly complex area of the market in terms of the scientific and regulatory knowledge required. Most generalist investors struggle to make informed decisions in this space, and the UK has a shortage of specialised deeptech investors with deep pools of capital. The additional layer of expensive due diligence is additive to the commercial due diligence which must still be performed as with all VC investments, incurring a much higher transaction cost and incentivising VC funds to invest in less scientifically complex sectors.

 

46.            As acknowledged at the start of this submission, the Bank invests in third party funds which are dedicated to addressing later stage funding gaps to boost scale up investment in innovative companies across many sectors. AI and creative tech are part of that focus, as deeptech and R&D intensive sectors.

 

47.            The following points in this section will cover the general state of the finance and equity markets and other barriers facing small businesses owners. Whilst not unique or specific for AI and creative tech, these access to finance issues may impact businesses in any sector and are important to understand and overcome. This section will also cover the specific scale up barriers in access to finance, as covered in response to the Inquiry’s first question.

 

The Small Business Finance Market

 

48.            The British Business Bank’s Small Business Finance Markets Report examines in detail the funding landscape for smaller businesses, providing policy makers and the market with a comprehensive, independent assessment of finance trends throughout the year.[11] 

 

49.            In 2023, the use of external finance saw a consistent rise over the year from 41% in Q1 to 50% in Q3 2023. The speed of this increase indicates a growing need among businesses for finance to support cash flows. This is supported by evidence from the latest Bank Finance survey, which shows working capital was the main reason for seeking finance for 58% of smaller businesses in 2023, up from 53% the year before. This was a significant increase.

 

50.            Finance use overall is affected by both supply side and demand side factors. Market intermediaries reported a lack of awareness of finance options (60%), followed by access to supply (45%) and cost of finance (43%) as the main barriers affecting smaller business demand for finance.  The Bank’s 2023 Finance Survey also revealed smaller business awareness of some alternative finance types had fallen from a year ago, including invoice financing, equity crowd funding platforms, marketplace lending and finance from business angels.

 

A graph of a business Description automatically generated with medium confidence

 

51.            The report also identified regional and place-based challenges remain in accessing finance to many parts of the UK, particularly equity finance, and there continues to be a gap in the proportion of finance going to female and Ethnic Minority businesses. Please see further analysis from the report below.

 

Regional and place-based barriers to finance

 

52.            Regional funding gaps are most acute for equity finance, where London’s dominance has increased over time. The number and value of equity deals in London has increased at a faster rate than the rest of the UK, so that by 2023, the capital received 46% of deals and 58% of total investment. London’s increasing share of equity deals may be attributed to greater access to skilled labour, financial expertise as well as a positive networking environment.

 

53.            However, while the effect has been greater in London, clustering effects have also been seen in cities outside of London. Whilst UK equity ecosystems have developed over the decade with a greater number and breadth of equity investors, the growth in investor presence has been greatest in London, further reinforcing regional imbalances. From 2017, the number of unique VC offices per region increased more in London than areas outside of London (186% compared to 142%). London’s VC market remains substantially deeper than areas outside of the capital.[12]

 

54.            Findings from the British Business Bank’s 2021, 2022 and 2023 Nations and Regions Tracker reports[13] highlight the place-related factors influencing smaller business access to finance. These include:

 

 

 

 

 

 

 

55.            Barriers in access to finance for academic spinouts outside the ‘Golden Triangle’ and how the Bank supports spinouts is discussed later in this submission.

 

Female and ethnic minority barriers to finance

 

56.            There continues to be a gap in the proportion of finance going to female and ethnic minority businesses, but recent initiatives are beginning to raise awareness of the issues.

 

57.            Female and Ethnic Minority-led smaller businesses make up around 25% and 8% of the UK business population respectively. Approximately 8% of businesses are led by those with a disability. These groups face particular barriers in accessing finance, and as highlighted in the Bank’s Alone Together research. Intersectionality can compound these challenges.[14]

 

58.            Female and ethnic Minority-led businesses face challenges in raising finance to start and grow their business. Over the past ten years, these businesses have been more likely to be discouraged from applying for finance, despite greater availability of finance options and providers in the market. Not knowing where to find the right finance, lower awareness of finance options and increased perceptions of rejection remain as key barriers for these groups.

59.            Female-led businesses are typically less willing to use finance to grow than their male-led counterparts, with Q1 and Q2 data indicating the gap widened in 2023. Willingness to use external finance amongst female-led businesses has declined from 40% in 2014, to 25% in 2023, significantly lower than for male-led businesses (43% and 35% respectively). Around 57% of female-led businesses agree they never think about whether they could or should use more external finance. This is significantly higher than the 52% of male-led businesses reporting the same over 2022 and 2023. This may reflect barriers they perceive or already encountered in seeking finance.[15]

 

60.            A lack of data on funding to female and ethnic minority led businesses makes measuring progress difficult. Where it exists, there are some signs of improvement. The share of equity deals to teams with at least one female founder has increased by almost ten percentage points over the past decade, but the share of investment going to all-female teams remained static at just 3%. Lending from Community Development Financial Institutions (CDFIs) to these groups surpasses their respective shares compared to the overall business population.[16]

 

Challenging Equity Market

 

61.            The Bank’s Small Business Equity Tracker Report examines recent trends in equity investment into UK SMEs and the international competitiveness of the UK VC market. The report also assesses the UK’s VC market gaps and Bank activity in the market, giving us insight into challenges and trends in scale up equity finance.[17]

 

62.            The latest report shows a challenging environment for scale ups, with equity finance for smaller businesses falling by 48% in 2023, following record levels of activity in the previous two years. A tighter macroeconomic environment and heightened interest rates continued to affect both the relative attractiveness of the asset class and hamper exit opportunities for UK companies. Other notable findings include:

 

 

 

 

 

 

What does this mean for AI and creative technology?

 

63.            The UK market still requires more late stage and specialist investment to close the gap with the US market, particularly in R&D intensive sectors like deeptech and life sciences, where companies face high capital requirements. As noted earlier in this submission, AI and creative technology will rely on VC investment to scale and develop their product. Improving the availability of later-stage scale up capital will be vital for these two sectors.

 

64.            As the most active late-stage investor in UK life sciences and deeptech, the Bank and its commercial subsidiary, British Patient Capital, will continue to support these kinds of innovative businesses as they navigate their funding journeys. More information on how the Bank is acting to address these barriers to finance are detailed in our answer to the Inquiry’s next question.

 

65.            The Small Business Finance Markets Report 2024 also identified regional and place-based barriers remain and female and ethnic minority entrepreneurs still face challenges accessing finance. While not unique to AI and creative tech, these barriers to finance are pertinent.

 

66.            The report also highlighted four key issues that are likely to shape small business finance markets over the next decade. This includes funding the transition to net zero, finance providers making greater use of digital technology and AI, the return to more ‘normal’ interest rates and the need to create a dynamic and resilient economy.

 

67.            AI has the potential to shape small business finance markets over the next decade. Finance providers are already using predictive AI but generative AI is creating new opportunities, with fintech and new entrants leading the way in its adoption. Going forward, AI could help increase the availability and lower the cost of finance to smaller businesses helping to address some of the finance market challenges outlined earlier. The British Business Bank is helping to support the development of fintech and finance providers using new technologies and delivery models.[18]

 

 

 

 

How effectively are existing organisations (such as UKRI), catalyst programmes, industry schemes and other Government initiatives addressing these issues? What outcomes are being achieved? Are any changes necessary, and how would they work in practice?

 

Summary: For innovative businesses, like those in AI and creative technology, BPC has catalysed and strengthened the availability of long-term patient capital for high-growth innovative companies. The Bank is establishing the British Growth Partnership that will leverage BPC’s expertise and track record as the largest domestic investor in UK venture and venture growth opening up its commercial capability and investment pipeline to institutional investors, in order to catalyse institutional investment into UK high potential companies. We also work to address regional and place-based barriers in access to finance to ensure entrepreneurs can access the finance they need regardless of where and who they are. We recognise that the British Business Bank is one of a multitude of government bodies and business and finance groups which work to address the issues facing AI and creative technology businesses. We collaborate closely with Innovate UK (IUK), with whom we have a Memorandum of Understanding (MoU), and other public institutions to support innovative businesses on their funding journey.

 

Backing Innovation

 

68.            The British Business Bank has a strategic objective to back innovation, by ensuring the UK’s most innovative businesses, including life sciences, deeptech, and R&D intensive sectors, can access the capital they need to start and scale.

 

69.            Overall last year, the Bank’s programmes took £882m of taxpayer funding and unlocked an extra £2.5bn of lending and investment from the private sector, channelling £3.4bn of support to the UK’s most innovative businesses. The Bank is the largest domestic investor in UK venture and venture growth opportunities. It has supported 15% of UK equity deals, accounting for 18% of total equity investment.

 

70.            This funding for innovation unlocks a disproportionate amount of private sector support and hence has a disproportionately large economic impact: From 25% of the overall funding, 60% of the additional jobs created overall are linked to our support for innovation (23,800), and 65% of the expected additional turnover generated (£12.9bn). In terms of additional GVA generated, backing innovation contributes 72% of the Bank's total (£6.0bn). This is due to the funding supporting 1,400 high growth, innovative companies.[19]

 

71.            BPC’s impact in the VC market is also outlined earlier in this submission and specific programme performance is detailed below.

 

British Patient Capital (BPC)

 

72.            The UK provides fertile ground for innovative, dynamic businesses to thrive, but a lack of access to late-stage capital prevents many companies from scaling up and fulfilling their commercial potential. British Patient Capital was established in 2018 to address this problem. By focusing on the late-stage funding gap, BPC helps to ensure high-growth UK companies have access to the right type of funding at the right time in their life-cycle, supporting them as they expand, create jobs, develop products and enter new markets.

 

73.            As the UK’s largest domestic investor in UK venture and venture growth opportunities, BPC is increasing both access to, and availability of, long-term, patient finance. We do this via three schemes, each one addressing specific market issues.

 

 

 

 

74.            Across all its activities, British Patient Capital invests on a commercial basis to deliver competitive returns for the UK taxpayer. By demonstrating that a patient capital approach can produce commercially attractive returns, we are encouraging other UK institutional investors to invest in the asset class, to both drive and benefit from the success of our high-growth companies.

 

75.            The BPC Annual Report and Accounts 2023 shows that BPC has continued to strengthen the availability of long-term patient capital for high-growth innovative companies, during FY 2023/24:

 

 

 

 

 

76.            BPC Core programme portfolio performance:

 

 

 

 

Future Fund: Breakthrough (FF:B)

 

77.            FF:B was launched in July 2021 and is a UK-wide programme that co-invests alongside private investors. It has made investments into 18 innovative, R&D-intensive companies – split broadly evenly between life sciences and deep-tech. These investments include:

 

 

 

78.            An early impact assessment of FF:B[20] shows FF:B is on course to deliver on its financial targets and is playing a significant role in supporting R&D expenditure in innovative companies, enabling them to increase employment, undertake R&D activities and support the commercialisation of products.

 

 

Life Sciences Investment Programme (LSIP)

 

79.            LSIP is a £200m initiative managed by British Patient Capital designed to address the growth equity finance gap faced by high-potential UK life sciences companies.

 

80.            LSIP makes cornerstone commitments to later stage Life Sciences venture growth funds with a strong UK focus, so that capital-intensive, cutting-edge firms in the sector receive the long-term funding they need to succeed in the UK. To further support the objectives of LSIP, British Patient Capital also entered into a collaboration agreement with Abu Dhabi’s Mubadala Investment Company. LSIP aims to:

 

 

 

 

81.            In January 2023, the programme invested $67m as a cornerstone investor in SV Health Investors’ SV Biotech Crossover Opportunities Fund (SV BCOF).

 

Enterprise Capital Funds (ECF)

 

82.            The Enterprise Capital Funds (ECF) combines private and public money to make equity investments into early stage, high growth businesses. The primary objective of ECF is to address the ‘equity gap’ by increasing the availability of early-stage equity finance to high potential UK companies. The programme does this by providing public resources for an investment product that encourages an increased flow of private capital into the equity gap and lowering the barriers to entry for entrepreneurial equity fund managers seeking to channel finance and mentoring to SMEs. As of March 2024, £2.3bn (including by third parties) has been committed through the ECF programme.

 

83.            The expansion of the supply in VC funding was attributed to the substantial growth of the technology sector in the 2010s and the increasing depth of the start-up ecosystem. Stakeholders have emphasised the critical role played by the Bank’s ECF programme and BPC in enabling the development of the ecosystem. According to the ECF Evaluation 2021[21], a key motivation for businesses seeking equity finance from ECF backed VC funds was to invest in the development of technology at the heart of their business model.

 

Long-Term Investment for Technology and Science (LIFTS)

 

84.            The Long-Term Investment for Technology and Science (LIFTS) initiative will aim to create two new investment vehicles that are accessible to pension fund capital, unlocking over £1bn of total private capital, including from Defined Contribution (DC) pension schemes, to support innovative companies in the UK.

 

85.            As part of the initiative, the British Business Bank has awarded a total of £250m:

 

 

 

86.            The successful LIFTS bidders, Schroders Capital and ICG plc, are expected to begin making investments by the end of 2024.

 

British Growth Partnership

 

87.            As outlined in the beginning of this submission, the Bank is establishing a new investment vehicle, the British Growth Partnership, which will create a new way for the British Business Bank and institutional investors to invest in innovative companies together.

 

88.            Leveraging the British Business Bank’s market expertise, these long-term investments will be made independently of government on a fully commercial basis. In the coming months, the British Business Bank will seek to raise hundreds of millions of pounds of investment for this fund, with the aim of making investments by the end of 2025.

 

89.            By unlocking hundreds of millions of pounds of domestic investment for the UK’s high growth businesses through the British Growth Partnership, the UK can capture the full commercial potential of its world class breakthrough technology companies.

 

Permanent capital base

 

90.            As well as announcing the British Growth Partnership at the International Investment Summit, the government will also implement a set of reforms to the British Business Bank’s financial framework that will increase its impact and enhance its ability to respond flexibly to the market. These reforms include putting the British Business Bank’s £7.9bn set of commercial programmes on a permanent footing.

 

91.            Making the capital base of the Bank’s commercial programmes permanent will allow the Bank to re-invest its commercial returns over the long term, positioning it as a stable, long-term investor. This permanence will enable the Bank to follow through with investments from early-stage to late-stage growth, ensuring companies receive consistent support as they scale. A permanent capital base will provide the Bank with the flexibility to catalyse capital into UK companies across various stages of growth. By leveraging its full range of capabilities, the Bank will be better positioned to support the Government’s missions and the delivery of its Industrial Strategy.

 

Unlocking potential

 

92.            The Bank has a dedicated objective to unlock potential by ensuring entrepreneurs can access the finance they need regardless of where and who they are. The Bank looks at this objective through two lenses; regional interventions and supporting underserved founders.

 

Regional and place-based barriers

 

93.            The Bank’s work to ensure that money is not concentrated to London and the Golden Triangle is best demonstrated through our Regional Funds. In 2023/24 the Bank launched a new generation of six Nations and Regions Investment Funds supported by £1.6bn of new Government funding:

 

 

 

 

 

 

 

94.            The purpose of the Nations and Regions Investment Funds is to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the UK, with an inclusive approach to all eligible sectors. By March 2024, £1.1bn was committed with £0.5bn of follow-on capital[22].

 

95.            The Bank’s regionally focussed interventions address the additional challenges businesses operating in thinner finance markets face, due to their location. The Regional Funds have been demonstrably successful in addressing those targeted challenges, helping to increase supply of capital through leveraging private capital and seeking to develop self-sustaining finance ecosystems.

 

96.            In 2023, 84% of the businesses supported by the Bank have been outside of London (19,400 businesses), and £2.9bn of finance deployed was into businesses outside of London.[23]

 

Female and ethnic-minority barriers

 

97.            Another key component of unlocking potential involves our work around diversity, equity and inclusion – ensuring that smaller businesses have access to finance, regardless of the personal characteristics of the people who are running them. We are proud of the impact of our Start Up Loans programme, which has made 40% of its loans to women entrepreneurs and 20% to Ethnic Minority entrepreneurs.

 

98.            To help encourage a better gender balance in smaller business finance, the Bank regularly publishes research on barriers to finance for underserved groups. As an example, last year the Bank published Finding What Works[24], looking at why the venture capital industry has performed poorly in investing in women-owned businesses, and what can be done to change the mindsets and behaviours of investment committees.

 

99.            The British Business Bank and British Patient Capital are signatories to the Investing in Women Code and drive change by leading by example, as well as promoting the Code to other LPs and VCs. The Investing in Women Code is a commitment to support the advancement of female entrepreneurship in the United Kingdom by improving female entrepreneurs’ access to tools, resources and finance from the financial services sector.

 

100.       The Bank has also worked to ensure that all its services are fully accessible to people with disabilities. During the year, for example, the application system for Start Up Loans was updated to include questions around accessibility – customers can self-identify any needs they may have, and those needs are then flagged to our business support partner.

 

101.       The importance of tracking and monitoring protected characteristics within portfolios is widely recognised, but challenges remain with collecting, storing and reporting on personal data. The Bank has integrated diversity, equity and inclusion considerations into discussions with delivery partners in relation to their own operations and their portfolio. Increased engagement between policymakers and finance providers has led to some positive developments. Business surveys provide useful insights, with the Bank’s own Finance Survey now reporting on access to finance for disabled entrepreneurs.

 

Collaboration with other Government bodies

 

102.       The barriers to scale up capital for small businesses in AI and creative tech sectors cannot be overcome solely by the interventions of the British Business Bank. For example, a small business employing AI or developing technology may be able to get scale up capital through one of our equity programmes, but in the past it could also have received grant funding and other support from IUK or UKRI.

 

103.       As organisations such as UKRI and IUK play an important role in building the innovation ecosystem, the Bank collaborates with these and many other government bodies and business and finance groups to provide a holistic offer to small businesses at different stages of their finance journey. 

 

104.       To increase our joint impact in early 2024 the Bank signed a Memorandum of Understanding with IUK to take forward a series of actions to further enhance our collaboration.[25] This new collaboration will see the two organisations working even more closely together to co-create new opportunities to promote investment and to support UK businesses through better tailored offerings and to co-ordinate their activities in localities across the country.

 

105.       The Bank, UKRI, IUK published a joint report in 2022[26] which examined how the programmes we deliver to back innovation-led businesses work together to support their success. The crossover between UK research council spinouts, Innovate UK-funded companies, and recipients of British Business Bank investment is significant:

 

 

 

 

 

 

 

What role do academic institutions play here, and what can be done to boost commercial links with AI and creative technology?

 

Summary: Academic institutions play a salient role in the development of innovative businesses, and it is vital that capital and investment is available to commercialise cutting edge technology. The Bank supports university spinouts with British Business Bank programmes more likely to fund academic spinout companies than the overall equity market. While the Bank is having a positive impact and supporting university spinouts, improving the availability of finance for university spinouts outside the ‘Golden Triangle’ could see further benefits to deeptech and R&D businesses in the UK.

 

Why University Spinouts are Important

 

106.       Academic institutions play a salient role in the development of innovative businesses. The creation of spinout companies is an important avenue through which founders and universities can commercialise cutting edge academic research. Beauhurst define an academic spinout as a company that was set up to exploit IP developed by a recognised UK university and then either licences the IP from the university, or the university owns or has the option to purchase shares in the company. It is important to note that staff or students can set up start-ups which would not meet this definition.

 

107.       The British Business Bank's Small Business Equity Tracker[27] outlines how the value of equity deals involving university spinouts has increased in the UK:

 

 

 

 

How the Bank supports University Spinouts

 

108.       As laid out in our latest Small Business Equity Tracker, the Bank has supported 15% of UK smaller business equity deals between 2021-2023, with a high proportion in tech companies and university spinouts.

 

109.       British Business Bank programmes are more likely to fund academic spinout companies than the overall equity market. During 2021-2023, the Bank supported 160 equity deals into companies classified as academic spinouts.

 

110.       These companies accounted for 13% of Bank-supported deals (compared to 9% across the wider market) between 2021 and 2023.

 

111.       The British Business Bank has a number of programmes that support university spinouts. British Patient Capital, the Regional Angels Programme (RAP) and Managed Funds were the largest contributors, together making up 83% of the Banks deals into university spinouts during the 2021-2023 period.

 

112.       The two regional programmes, Northern Powerhouse Investment Fund I (NPIF I) and Midlands Engine Investment Fund I (MEIF I), also made important contributions, together making up 17% of the Bank’s deals into spinouts.

 

113.       As a percentage of all deals made by the programme, 57% of all the Future Fund: Breakthrough (FF:B) deals went to university spinout companies. While this is only based on 14 FF:B deals, it still reflects these programmes’ objectives of funding R&D intensive companies.

 

114.       The percentage of spinout deals for other programmes are 21% for MEIF I, 15% for RAP, 10% for NPIF I, 8% for ECF. One out of the first five LSIP deals also went into a spinout company. The high proportion of spinout deals across these equity programmes highlights the Bank's strategic objective to back innovation.[28]

 

115.       As mentioned in the response to the previous question in this submission, the Bank works closely with UKRI and IUK in the support of spinout businesses. Spinouts with backing from both Innovate UK and the Bank were more likely to raise external finance. Spinouts supported by both Innovate UK and the Bank had almost double the survival rates. Of those founded between 2010 and 2014, 97% were still active by 2022, making them 17x less likely to close.[29]

 

116.       In March 2023, British Patient Capital made a £30 million investment into Northern Gritstone Limited, the investment company focused on university spinouts and R&D-intensive businesses across the North of England. With a focus on spinouts from their partners at the universities of Leeds, Manchester and Sheffield, alongside other local science and technology start-ups, Northern Gritstone supports the commercialisation of the world-class research and innovation originating from these institutions. It aims to catalyse the nascent venture ecosystems around these communities, drawing in further external capital to drive their growth. While Northern Gritstone will typically invest at pre-seed and seed stage, as a long term investor, it has the capability to invest throughout the lifecycle, and into more established businesses at the later stage.

 

Boosting AI and Creative Technology

 

117.       As outlined in responses to previous questions, regional and place-based barriers can have a detrimental effect on small businesses ability to access finance. This is true for university spinouts outside the Golden Triangle which could be holding AI and creative tech businesses back.

 

118.       The Backing Innovation-led Businesses report published in 2022 found that equity-backed spinouts are found across the UK, but those in the 'Golden Triangle' of London, Oxford and Cambridge secure the most investment. University and research institution spinouts are considered less London-centric compared to the wider UK venture capital market, but a lack of access to established finance ecosystems may be hindering investment outside the Golden Triangle.

 

119.       Spinouts outside the Golden Triangle were less likely to access equity capital, with 40% raising at least one round of external equity, compared to 53% of those within the Golden Triangle.

 

120.       The value of capital raised differed even more substantially, with the median spinout in the Golden Triangle, having raised £5.7 million by year eight, compared to £1.4 million for the median spinout in the rest of the UK.

 

121.       As cited in response to a previous question regarding barriers to finance, our Nations and Regions Tracker 2023 identified 33 innovation-led clusters demonstrating that there are significant innovative investment hotspots beyond the Golden Triangle. Academic spinouts play a significant role in the majority of these, accounting for an average 23% of Technology/IP-related deals and 28% of investment value across all clusters between 2011 and Q2 2023. However, academic spinouts located outside of the Golden Triangle face a more challenging equity environment, as shown by their tendency to complete smaller deals, to secure their first (announced) investment later in life and to rely more on government investors.[30]

 

 

What can the UK learn from overseas?

 

Summary: The UK is one of the most innovative countries globally, ranked 4th in the 2023 Global Innovation Index (GII). However, while the UK excels in research and innovation, it lags behind competitors in R&D intensity relative to the size of its economy. Countries like Israel, South Korea, and the US outspend the UK in R&D as a percentage of GDP. France and Germany have made progress in VC investment, with France increasing its VC share from 31% to 39% of the UK’s total, and Germany rising from 38% to 43% between 2017 and 2023. However, their overall levels of VC investment still trail behind the UK. In specific sectors like deeptech and green tech, these countries are more competitive with the UK, with France and Germany raising almost 90% of the UK’s investment levels at certain stages of the market. Institutional investment, particularly from pension funds, is an area where the UK significantly lags. For example, US retirement savings contribute 72% of its venture capital pool, compared to just 10% in the UK. Canada and Australia also outperform the UK in pension fund investment in private equity and venture capital.

 

Competitor Countries are more R&D Intensive

 

122.       The UK is one of the most innovative countries in the world, though other competitors are more R&D intensive when adjusting for the size of the economy.[31]

 

123.       The Global Innovation Index (GII)[32] is one of the most comprehensive evidence sources globally on the innovation performance of leading economies. The GII ranks 132 countries’ innovation capacity based on key pillars such as research, infrastructure, market sophistication and innovation outputs. The latest edition places the UK as the fourth most innovative country globally in 2023.

 

124.       Compared to the other top VC markets globally, with a score of 62.4 the UK sits behind Sweden (64.2) and the US (63.5). The UK’s underlying innovation strengths in the GII continue to centre around research capability, including citation impact and top university rankings. Separate data from the OECD also confirms this, using a measure of the share of research publications that are in the top 10% most-cited globally. Of the top 12 VC markets, in 2020-2022 Singapore (19.1%), the UK (14.1%) and the US (13.4%) are the most internationally competitive countries.

 

125.       However, countries' innovation performance on these metrics is also driven by the size and development of their economies. When adjusting for differences in GDP (using OECD data on gross domestic expenditure on R&D), other competitor countries are more R&D intensive than the UK. Israel (5.9% of GDP), South Korea (5.0%) and the US (3.5%) spent the most on R&D as a proportion of GDP during 2020-2022, while the UK (2.9%) ranked seventh of the top 12 VC markets.

 

126.       For Israel and South Korea this intensity is partly driven by their sectoral composition, which includes a strong focus on capital intensive industries like defence and manufacturing, as well as high levels of government R&D investment in recent years.

 

 

France, Germany and Canada growth in green tech and deeptech sectors

 

127.       Of the comparator countries that sit behind the UK in terms of VC market size, Canada, France and Germany have been the closest competitors.[33]

128.       The data shows that, having initially fallen further behind the UK in 2017, France and Germany have seen some steady improvement in the years since. French VC investment has increased from 31% of the UK total in 2017 to 39% in 2023, while German investment has risen from 38% to 43%. However, their investment levels as a proportion of the UK’s still remain less than 50% in 2023.

 

129.       While the UK has maintained a significant gap over these key competitors in aggregate, the relative specialisations of these economies means that they could be more competitive with the UK in certain stages and sectors of the market.

 

130.       These competitor economies are most competitive with the UK in deeptech and green tech[34] sectors, looking at data for 2021-2023. In deeptech, France and Germany raise comparable amounts of finance at early stage VC (covering Series A & B) – attracting 72.8% and 88.9% of UK investment levels, respectively. In green tech, France also raised 89.5% of the UK’s investment level at early stage VC.

 

Institutional investment by foreign competitors

 

131.       As outlined in answer to the Inquiry’s first question, the UK has an opportunity to catalyse institutional investment into the growth economy. The Bank is establishing the British Growth Partnership which will leverage the Bank’s expertise and track record to manage third-party capital from institutional investors, including pension funds, to increase investment in the growth economy.

 

132.       Compared to foreign competitors, the UK’s institutional investors and pension funds invest far less in venture capital.

 

 

 

 


ANNEX A – List of questions on which the British Business Bank is not in a position to comment

 

What further measures (financial and non-financial) are needed to address barriers to scale in AI, and creative technology?

 

 

October 2024

32

 

[1] Creative Industries Policy and Evidence Centre, Understanding Createch R&D (2022), (pec.ac.uk)

[2] British Business Bank, Impact Report 2024, (British-business-bank.co.uk)

[3] Creative Industries Policy and Evidence Centre, Understanding Createch R&D; Council for Science and Technology, Harnessing Research and Development in the UK Creative Industries (2023), (gov.uk)

[4] Deliotte, AI in pharma and life sciences, (deliotte.com)

[5] House of Commons Culture, Media and Sport Committee, Connected tech: AI and creative technology (2023), (parliament.uk)

[6] British Patient Capital, Future Fund Breakthrough – Factsheet, (britishpatientcapital.co.uk)

[7] British Business Bank, Small Business Equity Tracker 2024, (british-business-bank.co.uk)

[8] British Patient Capital, Annual Report and Accounts 2023, (britishpatientcapital.co.uk)

[9] British Business Bank & Oliver Wyman, The Future of Defined Contribution Pensions: Enabling Access to Venture Capital and Growth Equity (2019), (british-business-bank.co.uk)

[10] Creative Industries Policy and Evidence Centre, Understanding Createch R&D; Council for Science and Technology, Harnessing Research and Development in the UK Creative Industries (2023); Responsible Technology Adoption Unit (formerly the centre for Data Ethics and Innovation), New research reveals the most pressing opportunities and barriers to trustworthy innovation in data and AI (2021), (gov.uk)

[11]   British Business Bank, Small Business Finance Markets Report 2024, (british-business-bank.co.uk)

[12] British Business Bank, Small Business Finance Markets Report 2024

[13] British Business Bank, Nations and Regions Tracker 2021, (british-business-bank.co.uk); Nations and Regions Tracker 2022, (british-business-bank.co.uk); Nations and Regions Tracker 2023,(british-business-bank.co.uk)

[14] British Business Bank, Alone Together: Entrepreneurship and diversity in the UK (2020) (british-business-bank.co.uk)

[15] British Business Bank, Small Business Finance Markets Report 2024

[16] British Business Bank, Small Business Finance Markets Report 2024

[17] British Business Bank, Small Business Equity Tracker 2024

[18] British Business Bank, Small Business Finance Markets Report 2024

[19] British Business Bank, Impact Report 2024, (British-business-bank.co.uk)

[20] British Business Bank, Future Fund: Breakthrough- Process Evaluation and Early Impact Assessment 2024

[21] British Business Bank, Enterprise Capital Funds interim evaluation report 2021 (british-business-bank.co.uk)

[22] British Business Bank, Annual Report and Accounts 2024, (british-business-bank.co.uk)

[23] British Business Bank, Impact Report 2024

[24] British Business Bank, Finding What Works: Pathways to Improve Diversity in Venture Capital Investment (2023), (british-business-bank.co.uk)

[25] Press Release: Innovate UK and British Business Bank sign memorandum of understanding (April, 2024), (british-busniess-bank.co.uk)

[26] British Business Bank, UK Research and Innovation, Backing Innovation-led Businesses: The Role of Public Investment (2022), (british-business-bank.co.uk)

[27] British Business Bank, Small Business Equity Tracker 2024

[28] British Business Bank, Small Business Equity Tracker 2024

[29] British Business Bank, UK Research and Innovation, Backing Innovation-led Businesses: The Role of Public Investment (2022)

[30] British Business Bank, Nations and Regions Tracker 2023

[31] British Business Bank, Small Business Equity Tracker 2024

[32] WIPO, Global Innovation Index 2023.

[33] British Business Bank, Small Business Equity Tracker 2024

[34] Greentech covers any technology that has been created to contribute to a better environmental outcome. This captures a broad range of environmental benefits including decarbonisation, resource efficiency, pollution control and nature preservation.

[35] British Business Bank, Small Business Equity Tracker 2022

[36] Onward, Pension Power Unlocking the UK’s pensions for science and tech growth 2023 (ukonward.com)