The Government’s R&D Roadmap, published last year, sets out the important direction the UK needs to take to meet the target of increasing R&D spend to 2.4% of GDP by 2027.

Importantly, the Roadmap describes how improvements in access to finance can help to stimulate business investment in R&D. Increasing and improving access to risk capital is a critical element of a vibrant research and innovation ecosystem and a recent survey of 500 businesses conducted by the NCUB and the Universities Commercialisation and Innovation (UCI) Policy Evidence Unit at the University of Cambridge found that the second most significant factor where businesses said their needs were not being fully met was in accessing finance for R&D and innovation in the UK.

Lessons can be learned from all areas across the UK, as access to finance across different devolved nations as well as in local areas in the UK varies . The local differences in business’ R&D activities are significant, with over half of R&D expenditure in 2019 performed by businesses in 3 English regions only: the East of England, South East, and London (ONS, 2020).

Highlighting this growing concern, the Rees Review  found that while access to capital is improving, there are structural issues related to its source, amount and concentration across the UK.  Published in 2019, it made important recommendations as to how investor relations with university spin-outs could be further enhanced.

In response, Yorkshire Universities (YU) and NCUB hosted a virtual roundtable exploring the ways in which universities and businesses in Yorkshire & the Humber can access finance to fund research commercialisation, business development and local growth. Building on the Rees Review on university-investor links, a few key guiding themes emerged from the discussion around how different areas across the UK can access finance.

Key themes

  • Identifying local strengths

A local area’s chances of attracting funders can be increased if it has clearly identified strengths that are communicated through a strong brand and, ideally, a sector focus. The three main themes of sector focus include the local area’s sectoral strength as advertised by the area, the investor’s perspective on these sectoral strengths from an investment standpoint, and the importance of universities in identifying with a strong brand that can reach investors.

  • Building a brand

A strong local brand can clearly and effectively communicate places’ collective strengths outwards. Attracting investors is helped when they can easily grasp and identify with the brand that the local area stands for, including its businesses and universities. A strong brand also helps to attract the right investors who are knowledgeable in the area, thus making it easier for both universities and businesses in the local area and investors to connect.

  • Knowing your investor

Different investors lend themselves to different parts of an emerging business’ journey. On the one hand, there is a distinction to be made amongst investors. In particular, whether they are financial investors who want to see direct returns or corporate investors who bring sector and industry knowledge. On the other hand, some investors are able and willing to provide seed funding, while others are looking to invest in businesses that are already well-established. Knowing what an investor is looking for is important to understanding and attracting the right forms of capital.

  • Enabling access

Developing skills and knowledge about how to engage and work with investors is critical to enable access to capital. At the university level, clubs and modules for students and the broader community are important. The Innovate UK-funded   is a tool that universities in Yorkshire can borrow and use to explore the commercial potential of their research, develop entrepreneurial skills of their early career researchers,  and strengthen links between their academic and industrial communities, rather than having to reinvent the wheel.  On an individual level, enabling strengths means providing the right support to all people. Anybody with or without a degree and from any background who wants to be an entrepreneur should be able to follow. This means training needs to be adjusted to enable diversity.

At the business level, access to pre-seed and seed capital is vital in accessing later-stage investment provided by public funds and private investors. Without the right seed capital, start-ups and spinouts may lose out on  public and private capital, initiatives, and funds aimed at scaling up. Access to finance therefore needs to be enabled at multiple stages. Universities can play an important role in providing this early-stage funding and other support.


The recent announcement by the Northern Gritstone project demonstrates an important example of an ambitious initiative aimed at improving access to finance through collaboration. With initial set up funds of £5 million through the Connecting Capability Fund, the new investment company launched jointly by the Universities of Manchester, Leeds, and Sheffield funds spin-out enterprises across all three institutions using external capital raised from different investors, including strategic corporate partners, institutional investors, and individuals. They are hoping to raise a target of £500 million through strategic corporate funders.

Building a local profile built on common strengths, communicated through a strong brand, and realised through strong collaborative efforts across businesses and universities, can help local areas to access finance and build a strong network of investors in the long-term. In light of the government’s commitment to increasing national spend on R&D, as well as the ‘levelling up’ agenda, alongside efforts to tackle COVID-19 and its related socio-economic challenges, it is important to strengthen the connections between universities, private finance, investors and government at the local level.

Read our new joint publication with Yorkshire Universities titled ‘Ambitions and aspirations for University-Investor links in R&D in Yorkshire and the Humber’ exploring the findings and recommendations from the Research England-commissioned Rees Review and what they mean in practice for Yorkshire.