Innovation SuperNetwork: Response to Autumn Statement 2023

22 November 2023

untapped unicorns

Estelle Blanks, CEO at Innovation SuperNetwork

Today the Chancellor of the Exchequer, Jeremy Hunt gave his Autumn Statement. In the last few days we’ve seen some of what the statement would detail via his attendance at the CBI conference on Monday and in the press, so we already had a good idea that we’d see a continued focus from the Treasury on funding innovation in key sectors and plans for money to be invested into stimulating more venture capital via pension funds for scaling businesses.

On the face of it, this is all welcome news.

The Mansion House reforms as they are termed, have committed funding to ensure that more than a billion pounds from pension funds and other sources would make their way into UK science and technology companies. This support for increased private investment in innovation would be complemented by a new Growth Fund within the British Business Bank. Again, a hugely welcome continuation of financial support that should build on the funding already allocated for regional investment and provide more opportunities for scaling Northern businesses.

Inspired by the US Kaufman Fellowship, measures to fund a VC fellowship scheme are interesting. Anything that helps us to build better risk appetite from investors to support truly novel companies should be welcomed. However, the investment here is nominal. I would question just how far £3m and 20 places will go in making a difference.

Fundamentally there are two elephants in the room. Impact and diversity. While recent reports from Beauhurst and others have indicated improvements in the amount of investment going into businesses led by under-represented groups, there is still a huge disparity in the amount of investment that hits the regions and lands with women and ethnic minority groups.

Any VC Fellowship scheme should take the need for greater diversity in the investor landscape seriously and ensure that investors and funds with diverse leadership are mentored through the programme. Additionally, we can’t keep ploughing investment for pure profit above all else. Enabling sustainable and equitable growth should be central to any policy that supports private investment.

Without this, we will only compound the problems we are trying to address locally to ensure that more regional businesses can secure finance, but that more diverse founders also increase their chances of success.

But what’s obviously missing from this budget is sufficient support for start-up enterprises. While simplified R&D Tax relief will reduce the rate at which companies are taxed, this measure relies on a business’s ability to invest in research and development. A challenge for scaling companies, even more so for those starting-up.

Our work across the North East and Tees Valley to simplify the funding landscape and connect businesses at all stages of growth is ever more critical to ensure our local start-up ecosystem can compete nationally and internationally.

On funding for innovation, there are some obvious highlights that relate to key regional sectors for growth.

Following the announcement from Innovate UK that the North East will be home to its Digital Launchpad, the Chancellor’s announcement of an additional £500m to fund innovation centres for AI is welcome. I’d expect the region would be earmarked as an ideal place to locate one of these centres, but we will have to await further information on exactly how Treasury expects to deploy that investment.

Our work in building the region’s Digital Cluster over the last five years has increased innovation across the digital sector and connected businesses, large and small, with the infrastructure, research and funding the sector needs. An innovation centre for AI alongside the National Innovation Centre for Data, already located on the Helix site, would add tremendous value to our already strong Digital Cluster.

Finally, our mission at Innovation SuperNetwork is to ensure sustainable and inclusive economic growth for the region. The £4.5bn commitment from Government into advanced manufacturing and green growth sectors as part of a longer-term strategy should go some way to enable more equitable economic growth for the region and the UK.

As part of this £2bn for zero emission investment in the automotive industry will undoubtedly have a positive impact on the North East – where we are already leading the way in manufacturing this technology.

£960m for a green growth accelerator is also an interesting proposition, and I look forward to understanding more about how this accelerator will go about tackling the biggest challenges facing us in the race to net zero.

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