Source · Select Committees · Science, Innovation and Technology Committee
Recommendation 22
22
Not Addressed
Taking risk and being rewarded for doing so are essential components of a dynamic, innovative...
Conclusion
Taking risk and being rewarded for doing so are essential components of a dynamic, innovative economy and capital is essential to driving national, regional and local growth. Whilst the Government is limited in what it can do to influence the flow of capital across the economy, London, Oxford and Cambridge dominate venture capital flows and angel investor networks, leaving high-potential early-stage businesses in other parts of the UK underfunded. The Government’s additional Proof of Concept funding, 46 to help bridge the first part of the ‘valley of death’ between research and commercialisation, falls far short of what is needed to drive real change, at just £40 million over five years. (Conclusion, Paragraph 77)
Government Response Summary
The government agrees on the importance of innovation diffusion and adoption, detailing programs like Made Smarter, BridgeAI, and Robotics Adoption Hubs, but the response does not directly address the committee's concerns about imbalanced venture capital flows and the inadequacy of Proof of Concept funding in certain regions.
Government Response
Not Addressed
HM Government
Not Addressed
The government agrees with the importance of diffusion and adoption of innovation and technologies across the UK. That is why we are expanding the Made Smarter Adoption programme, committing up to £99 million from 2026 to support a further 5,500 small and medium-sized manufacturing businesses to adopt new technologies, and extending this proven model through a dedicated scheme for the Professional and Business Services sector. Studies consistently demonstrate the UK’s productivity gap, citing low and volatile investment, skills mismatches, and poor diffusion of technology and innovation.3 Small and Medium-sized Enterprises (SMEs) in particular face barriers adopting new digital technologies, including a lack of information, skills and resources.4 We are working to tackle these issues by implementing the ten recommendations set out by the SME Digital Adoption Taskforce, 3 Technology Adoption Review, 2025 Technology Adoption Review 2025; The UK’s Capital Gap, 2025 The UK’s capital gap 4 SME Digital Adoption Taskforce final report, 2025 SME Digital Adoption Taskforce: final report – GOV.UK including by bringing industry together at roundtables with No.10 to collaboratively deliver digital adoption support for small businesses, and running local-level SME Digital Adoption pilots. We will be publishing an update in the Spring. This work sits alongside support already available to help companies adopt digital technologies such as AI, including the Digital Catapult, Hartree Centre and the Cyber Action Toolkit from the National Cyber Security Centre. To drive widespread diffusion and uptake specifically of AI, across the workforce and SMEs in every region and locality, we will increase understanding of AI tools and capabilities, provide targeted support with integration, and improve access to upskilling materials. This will include working with industry to upskill 10 million workers by 2030 and expanding BridgeAI to focus on guidance and support for SMEs. Through Innovate UK, the government is also committing £52m to support a new national network of Robotics Adoption Hubs. Run by universities, businesses, or public sector organisations selected through open competition, these will provide companies of all sizes access to expert advice, live demonstrations, and networking opportunities. The window for applications has recently closed, with Hubs expected to be operational from the second half of 2026.