Collaboration king in challenge to overcome innovation funding gap

05 October 2020

untapped unicorns

A round up of the Accelerating Investment and Innovation Summit.
By Estelle Blanks, Executive Director

It’s been months in the planning, but this week we delivered the first Accelerating Investment and Innovation Summit, bringing together panelists from across the globe to discuss how to support more investment in innovation.

Here in the North East, this has been a critical issue for a number of years and has been highlighted time and time again with reports from Beauhurst, Nesta and the Scaleup Institute all pointing to a gap in innovation funding and a disparity in how those funds are spread across the country.

The latest report by the Scaleup Institute, Deloitte and Innovate Finance, called for urgent action to close the UK’s growth capital gap amounting to an emerging £15bn.

So what action did the summit highlight to help fix this problem?

First of all, our keynote speakers highlighted some key actions and policy frameworks at national, northern and North East levels. Nigel Walker, Innovate UK, highlighted the role of the Investor Partnership Model and in particular the impact of the Regional Angel Investment Accelerators. Henri Murison stressed the importance of addressing the challenge of innovation finance “at pace” in order to ensure new and innovative industries can emerge to stimulate employment and growth. Ammar Mirza CBE recognised the role of publicly backed funds in the region, the North East Fund, and the responsibility of the North East Access to Finance Task and Finish Group to plan for the future of finance supply and demand in the region.

Based on this context, there are three key actions that came out strongly:

1 Build Supply

Pragmatism won the day, as a desire to drive action through collaboration became apparent in each panel discussion. The notion that we should be actively working to bring the public sector together with private investors to the benefit of growing innovative businesses, the environment, society and the regional economy at large was particularly prevalent. Especially as Henry Whorwood, Head of Research at Beauhurst kick-started the conversation by highlighting the impact of coronavirus on the number and size of deals which have taken place since March. But likewise, describing just how reliant the North is on an influx of public funding to help leverage private investment.

This point came out strongly across the board  with Irene Graham from the Startup Institute laying out how regions across the UK need to build the supply of innovation investment by leveraging institutional funding, and encouraging syndicates and partnerships between public and private funders. Access to devolved funds is perhaps one way of achieving this, as highlighted by Dr Henry Kippin, Director of Economic Growth at the North of Tyne Combined Authority. One entrepreneur argued that the North East is not ready to invest in disruptive technologies, let us make sure that it is.

2 Build demand

Going hand in hand with building supply, is building demand and ensuring we foster an entrepreneurial environment in the region through a focus on access to finance education, raising ambitions, and opening up new opportunities by addressing the diversity challenge. We have a real strength in key sectors, but innovation levels in the region are relatively low and it is up to us to build an innovation and investment ecosystem that supports SMEs to innovate, grow and secure investment.

Irene Graham highlighted that growing SMEs in the region contribute £8m to the local economy. This figure can’t be ignored and demonstrates the impact investing in growing businesses has on the wider economy. 

3 Connect the two

But there is no use in building supply and demand if we don’t work to bring the two together. As US based investor Meganne Houghton-Berry pointed out, “the only reason I invested in a North East business is because you brought the opportunity to me”. This is where initiatives like the Newcastle Angel Hub, the Angel Accelerator programme, and the Growth Hub, really need to step in and step up so we are able to collaborate more effectively and tell the region’s innovation story to potential investors.

The last year has been a challenge for most businesses. But Coronavirus has also given us an opportunity to Build Back Better through impact investing, addressing the diversity challenge in investment and by helping the region ‘level up’ through innovation and entrepreneurship. The panels chaired by Helen Oldham (NorthInvest) and Jenny Tooth (UKBAA) really demonstrated that targeted interventions on diversity can make a huge difference. It was good to hear about the new Fund Her North initiative, which aims to give female entrepreneurs and businesses based in the North of England the backing they need to take on this challenging landscape. There was also a clear commitment in the investing for impact panel chaired by Charlotte Thompson (KTN) to ensure positive social, economic and environmental outcomes are part of the levelling up agenda and a central part of the devolution model presented by Henry Kippin.

This is an opportunity we have a responsibility to take hold of and drive forward. We are the proverbial ‘magic wand’. I am looking forward to working with colleagues across the Northern innovation and investment ecosystem to ensure we make a real difference for businesses here in the North East.

Missed the Summit? Watch the sessions again.

Keynote speakers: The Northern Investment Landscape

The Future of Early-Stage Investment Across the North

Investing for Impact: Accelerating Innovation and Growth

Creating Investment Portfolios to Minimise Risk & Maximise Returns

Where and what next? Actions to bridge the funding gap and empower diversity

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