The UK has all the components needed to become a global science and technology superpower

Earlier this month, the House of Lords Science and Technology Committee published a report laying out its ambitions for the UK to become a “science and tech superpower” by 2030. The report noted how Government plans to increase the proportion of GDP spent on research and development (R&D) to 2.4% by 2027. It has also increased public funding for UK Research and Innovation (UKRI), government departments, and other funders of research.

Continuous investment is needed for the UK to maintain a pole position and expand into new areas of innovation

The UK has already proven it has the ability to be a world leader in a number of areas from fintech to life sciences, thanks to several key factors. These include: world class research universities (four of the world’s top 10 universities are here); forward-thinking regulators with an open approach to innovation; a sophisticated investor network and growing investment capital; a strong framework of common law; and a timezone that allows true global operations across EMEA, APAC, and the Americas. London is particularly unique – as the largest city in the UK, it has one of the most ethnically and culturally diverse populations in the world. The fact that it is home to a global finance centre, a tech centre, and a policy / regulatory centre all within a few tube stops of one another, makes it an exceptional place for innovative companies to be born and thrive. But continuous investment is needed for the UK to maintain a pole position and expand into new areas of innovation. While transformational innovation can come from large corporates, it requires a degree of risk-taking and non-conformity which larger corporates are often reluctant to pursue. This is why it is essential that R&D investment be broadened to SMEs as well.

Supporting innovative SMEs and innovation campuses

At OakNorth Bank, we’re proud to have supported innovative SMEs over the years, such as: Clavis IDS (a manufacturing business which has won the Queen’s Award for Enterprise numerous times), Blis (a global martech leader), NetPay (the award-winning payment services provider which is now part of Fiserv), and Bruntwood SciTech which is dedicated to driving the growth of the UK science and technology sector, through its network of over 500 science and tech businesses across the UK.

Last year, we provided a loan to the business to support the development of vital new life science lab space in the West Midlands at two locations: Innovation Birmingham (the region’s leading digital tech campus situated in the heart of the city’s Knowledge Quarter), and Birmingham Health Innovation Campus (co-located with the city’s universities and NHS hospital trusts), which is set to become a world leading healthcare technologies campus. Earlier this year, we completed another transaction with the business to support the acquisition and redevelopment of Glasgow’s Met Tower, a 14-storey office building in the heart of the city centre, that’s set to become its new tech and digital hub. The site will be transformed into a hub where university spinouts, start-ups, scaleups, and large leading tech businesses can co-locate together and benefit from being in an innovative, collaborative tech cluster.

Earlier this year, I invested in About: Energy, which uses data and software to accelerate and enhance the battery development of its customers across the battery manufacturing, automotive, and aerospace sectors. The business was founded from battery research at Imperial and the University of Birmingham – demonstrating the important role that innovation campuses such as those Bruntwood is creating have.

While some have criticised the report, for us, there are a few of key areas government should focus on to ensure this is successful:

• Education: invest in tech education from GCSE level if not earlier and incentivise students to study STEM subjects through more scholarships and grants which businesses such as OakNorth could subsidise.
• Focus on scaling SMEs: the UK ranks third best in the world for start-ups but only 13th best for scale-ups. One of the recommendations from the Khalifa Review of Fintech was the launch of a new scale-up Visa which will make it quicker and easier for fast-growing, scale-up businesses to bring in highly skilled individuals.
• Regulation: With the UK having left the EU, we have a unique opportunity to create more proportionality in the regulatory environment.?We must ensure that requirements are broadly equivalent with other regulatory jurisdictions, whether that be within the EU, the US or other developed economies, but must also demonstrate how policymaking and regulation can help enhance competition and innovation in a forward-looking way.