With our annual Accelerating Investment and Innovation Summit drawing to a close, we heard from one of our panellists Mark Stamper, Principal Innovation and Economy Manager at North of Tyne Combined Authority.
He shared his thoughts on the region’s growing access to finance ecosystem, which remains strong against a backdrop of the COVID-19 pandemic and macro-economic pressures, as well as news of the Combined Authority’s £15m investment to boost coordination and scale within the ecosystem.
Innovation SuperNetwork’s Accelerating Investment and Innovation Summit brought together a range of policy makers, investors, corporates and SMEs, and one message remained clear; our regional access to finance ecosystem is still growing and remains impactful. The increasing diversity, both of investors and investees, demonstrates the continued effort of the region to put the North East firmly on the national map of powerful and innovative ecosystems.
This collaborative achievement is especially impressive considering the historical investment landscape of the North East, which we know has received a lower share of national investment in innovation, research and development, both through public schemes and private investors.
However, with 31% of our region’s population living in the top 15% of the UK’s most deprived areas, it’s not surprising that the latest British Business Bank’s Nations & Regions Tracker suggests that, despite interest in finance, fewer businesses in these areas apply, and more are rejected when they do than other areas of the country.
Nevertheless , it is clear from the Tracker that we’re holding our own against the remaining disruptions of the COVID-19 pandemic as well as a looming recession. For example, the North East achieved a milestone 3% of all equity deals nationally, which is in-line with our national business and employment share. The average value of these deals has also increased from last year, showing a trend towards bigger and more frequent deals in our region.
Our growing culture of innovation, with tech related firms and innovation accountable for 50% of all equity deals secured, is a key strength for the North East. The Net-Zero challenge is also a good opportunity for our business base, with the region securing 28% of all Net- Zero investment in 2020, the highest of any region. These figures reaffirm the importance of our regional capability to solve national economic and environmental challenges through innovation.
It is clear that the region is demonstrating that we have a growing pipeline of propositions that are appealing to national and international investors. Last month regional stakeholders pitched ‘£30bn of investible opportunities in this decade’ to City of London investors in areas such as off-shore wind, electrification, healthy ageing and life-sciences. However, this highlights the wider issues hindering levelling up, with large investment still needing to be sourced from outside the region.
There is still much to do to scale our ambition and attain the resources necessary. It is crucial that we manage the transition of the current regional funds to post European funding arrangements, working with stakeholders such as the British Business Bank to design fit for purpose regional funding that maintains the ecosystem and reduces uncertainty. As we know, regional funds are proven to catalyse investment from elsewhere, and provide much needed resources to respond to the myriad of business needs, from workspace improvement, research and development, skills and wider growth support.
We must also create focus and clarity around our key opportunities and continue to build on our industry and institutional strengths. Creating greater visibility of the depth and breadth of the long-term opportunity in our region will deliver the aggregated scale to make the region more attractive to larger investors.
The access to finance ecosystem is undoubtedly important for our collaborative levelling up efforts, despite its complexity. Synergy is needed to maximise the expertise and resources already available, so we can plug gaps, develop resilience and sustainability and strengthen our regional proposition to outside investors. Based on feedback from the market, the Combined Authority are investing over £15m in combination of early-stage equity funding, social finance funds and in a package of support to boost ecosystem coordination, which we expect to begin in the new year.
Developing the economic landscape in the North East requires continued collaboration from investors, both Governmental and private sector, and we ask that you get in touch to work with us to accelerate investment and innovation in the region, keeping the ball rolling in the interest of strengthening our access to finance ecosystem.
To find out more about the North of Tyne Combined Authority’s access to finance programme or wider innovation programme, contact Mark Stamper at Mark.stamper@northoftyne-ca.gov.uk.
