Source · Select Committees · Science, Innovation and Technology Committee
3rd Report - Flying Blind: Innovation, Growth and the Regions
Science, Innovation and Technology Committee
HC 538
Published 13 March 2026
Recommendations
2
Accepted
The UK’s clusters of innovation-led growth—from Cambridge Biotech to Glasgow Satellite City—are key engines of...
Recommendation
The UK’s clusters of innovation-led growth—from Cambridge Biotech to Glasgow Satellite City—are key engines of national economic prosperity, productivity growth and economic regeneration. Mapping, monitoring and supporting their growth should be a major pillar of the Industrial Strategy and the …
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Government Response Summary
The government accepts the recommendation, highlighting the creation and ongoing improvement of the 'Innovation Hub' as a single portal for funding, and outlining Innovate UK's plan for a more integrated approach with stronger regional engagement. UKRI will also report on engagement with innovators and the contribution of innovation investment to economic growth and regional capability.
Department for Science, Innovation and Technology
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3
Accepted
The Government should establish a national framework for cluster development that embeds regional Key Performance...
Recommendation
The Government should establish a national framework for cluster development that embeds regional Key Performance Indicators and tracks cluster lifecycles. As part of this, it should develop regional economic profiles that line up clusters with key sources of economic activity, …
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Government Response Summary
The government agrees with the recommendation and states it is already acting on it by supporting university collaborations, such as the Cambridge-Manchester partnership with £4.8 million, and exploring further partnerships in regions like the Northern Growth Corridor to drive regional growth and spin-out development.
Department for Science, Innovation and Technology
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4
Accepted in Part
The Government should publish annual data covering the performance and impact of innovation clusters.
Recommendation
The Government should publish annual data covering the performance and impact of innovation clusters. These should set out any gaps around infrastructure, skills, and commercialisation outcomes and detail how public investment is being used across different parts of the country. …
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Government Response Summary
The government 'partially agrees' with the recommendation, focusing its response solely on the Oxford to Cambridge Growth Corridor, detailing infrastructure investments and an investment prospectus for that specific cluster, but it does not commit to publishing annual data on the performance and impact of innovation clusters across the country as broadly recommended.
Department for Science, Innovation and Technology
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6
Rejected
The Government should establish a portal where innovators can be matched with suitable funding and...
Recommendation
The Government should establish a portal where innovators can be matched with suitable funding and support to help them cut through the current tangle of options. Innovate UK should announce targets for increasing engagement with innovators across the country, using …
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Government Response Summary
The government rejects the recommendation for a new portal and Innovate UK targets, arguing that existing mechanisms are more effective. It highlights embedded regional considerations in innovation policy, roles of senior figures like the Northern Growth Envoy, and regular engagement between ministers, UKRI, and local leaders, which they believe adequately addresses regional needs.
Department for Science, Innovation and Technology
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8
Not Addressed
The Government should incentivise complementarities between institutions in London, Oxford and Cambridge and those in...
Recommendation
The Government should incentivise complementarities between institutions in London, Oxford and Cambridge and those in other regions, such as through programmes to help spinout companies to scale up elsewhere in the country. Good practice examples include the partnership between the …
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Government Response Summary
The government partially agrees but its response fails to address the recommendation to incentivise complementarities between regional institutions or establish a mechanism for identifying spin-out scaling opportunities, instead discussing existing data transparency and R&D mapping.
Department for Science, Innovation and Technology
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9
Not Addressed
The Government should publish a strategy setting out how it plans to exploit the full...
Recommendation
The Government should publish a strategy setting out how it plans to exploit the full potential of the Oxford-to-Cambridge Growth Corridor – including locations outside these cities. This strategy should identify the existing and potential strengths of places between Oxford …
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Government Response Summary
The government agrees with the recommendation but then provides a response entirely focused on UKRI's strategy to leverage private investment and improve R&D spending data quality, failing to address the specific request for a strategy for the Oxford-to-Cambridge Growth Corridor.
Department for Science, Innovation and Technology
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10
Not Addressed
The Government should publish an assessment of whether funding to Golden Triangle institutions should be...
Recommendation
The Government should publish an assessment of whether funding to Golden Triangle institutions should be made contingent on projects having a quantifiable economic impact elsewhere. (Recommendation, Paragraph 33) 44
Government Response Summary
The government agrees with the recommendation and states they have published a national Spin-out Register and a UK university spin-out dashboard, with future iterations planned to include further economic impact measures. However, the response does not explicitly commit to the specific request of assessing whether funding to Golden Triangle institutions should be contingent on projects having a quantifiable economic impact elsewhere.
Department for Science, Innovation and Technology
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11
Not Addressed
The Government should appoint a minister to champion innovation in each region of the UK...
Recommendation
The Government should appoint a minister to champion innovation in each region of the UK – not just the Golden Triangle. These ministers should be tasked with ensuring that regional needs, opportunities and interests are considered in decisions on investment …
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Government Response Summary
The government partially agrees but its response fails to address the specific recommendation to appoint a minister to champion innovation in each UK region, instead discussing existing funding for university knowledge exchange and piloted shared technology-transfer approaches.
Department for Science, Innovation and Technology
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13
Accepted in Part
Future disclosures of departmental R&D spending should include breakdowns by region and cluster.
Recommendation
Future disclosures of departmental R&D spending should include breakdowns by region and cluster. The Government and UKRI should also develop a framework for tracking impact and publish annual regionally disaggregated reports that set out how public R&D funding supports innovation …
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Government Response Summary
The government partially agrees, highlighting the British Business Bank's (BBB) regional investment funds and new funding for East, South-East, and ten innovation clusters, which aim to ensure access to finance for innovative businesses across the UK. However, it does not explicitly commit to publishing the specific departmental R&D spending breakdowns or company-level data as requested.
Department for Science, Innovation and Technology
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14
Not Addressed
The Government and UKRI should, in response to this report, and on an annual basis...
Recommendation
The Government and UKRI should, in response to this report, and on an annual basis thereafter, set out how the R&D budget will be allocated by sector, region and cluster. The Government should also, in its response to this report, …
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Government Response Summary
The government's response fails to address the recommendation for annual reporting of R&D budget allocations and private sector investment by sector, region, and cluster, instead discussing proof-of-concept funding and spin-out support.
Department for Science, Innovation and Technology
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15
Accepted
The Government should in its response to this report set out how it intends to...
Recommendation
The Government should in its response to this report set out how it intends to ensure the Secretary of State’s mandate to use public spending to unlock private sector investment is taken up by Government departments, UKRI, Innovate UK and …
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Government Response Summary
The government accepts the recommendation, committing to launch the 'UKRI Venture Builder' pilot program in 2026/27 and detailing Innovate UK's integrated end-to-end support offer, including the Velocity account management service and strengthened ties with public finance institutions, as mechanisms to unlock private sector investment.
Department for Science, Innovation and Technology
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16
Not Addressed
University spinouts play an important part in ensuring that the UK’s research base contributes to...
Recommendation
University spinouts play an important part in ensuring that the UK’s research base contributes to economic growth. However, academics at some institutions would benefit from greater flexibility in working structures as they start and grow their spinouts, and universities should …
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Government Response Summary
The government's response focuses entirely on the role and funding model of Catapults, arguing for their existing structure and regional impact, without addressing the committee's recommendation regarding university spinouts, academic flexibility, or universities accepting smaller returns on intellectual property.
Department for Science, Innovation and Technology
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17
Not Addressed
The Government should accelerate delivery of the University Spinout Dashboard and commit to making it...
Recommendation
The Government should accelerate delivery of the University Spinout Dashboard and commit to making it an annual publication. The dashboard should include standardised data on equity terms, intellectual property agreements, institutional support, and regional outcomes. (Recommendation, Paragraph 54)
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Government Response Summary
The government agrees on the importance of transparent performance reporting but responds by detailing its approach to monitoring the Catapult Network's performance and impact, completely missing the recommendation regarding a University Spinout Dashboard.
Department for Science, Innovation and Technology
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19
Acknowledged
The Government should consider making funding to build the capacity of technology transfer offices contingent...
Recommendation
The Government should consider making funding to build the capacity of technology transfer offices contingent on their ability to deliver significant volume of throughput and provide evidence of success in building capacity and developing skills in their local economies. (Recommendation,Paragraph …
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Government Response Summary
The government agrees with the overall intent of the recommendation and highlights initiatives to improve access to finance for deep tech companies and strengthen specialist investor capability through the British Business Bank and venture capital fellowships, but does not commit to making funding for technology transfer offices contingent on their performance metrics.
Department for Science, Innovation and Technology
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20
Rejected
In its response to this report, the Government should set out how it plans to...
Recommendation
In its response to this report, the Government should set out how it plans to support the establishment of a Northern Gritstone or Midlands Mindforge for every region of the UK. (Recommendation, Paragraph 61)
Government Response Summary
The government partially agrees but does not commit to establishing Northern Gritstone or Midlands Mindforge-like funds for every region, instead rejecting a mandate to the British Business Bank for this purpose and stating DSIT is exploring options for a broader R&D infrastructure investment framework.
Department for Science, Innovation and Technology
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21
Not Addressed
The Government should establish a series of regional branches of the British Business Bank, with...
Recommendation
The Government should establish a series of regional branches of the British Business Bank, with a substantial presence on the ground in undercapitalised regions, to ensure that the Bank’s policies are aligned with the needs of innovative businesses across the …
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Government Response Summary
The government states it 'partially agrees' but then discusses local growth plans, university-industry collaboration, and skills strategies, explicitly stating it will 'not commit to a Regional Graduate Retention Strategy' which was not the recommendation. The response does not address the recommendation to establish regional branches of the British Business Bank.
Department for Science, Innovation and Technology
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23
Acknowledged
The Government should expand the Proof of Concept Fund and ensure it meets the needs...
Recommendation
The Government should expand the Proof of Concept Fund and ensure it meets the needs of existing or emerging clusters of innovation. It should also increase the size of available awards to £1 million. (Recommendation, Paragraph 78)
Government Response Summary
The government partially agrees with the objective but does not commit to expanding the Proof of Concept Fund or increasing award sizes. Instead, it highlights the work of the Regulatory Innovation Office (RIO) in addressing regulatory barriers and refers to wider departmental and cross-government activities, including the Industrial Strategy and DSIT's work on regional innovation ecosystems, as partially addressing the recommendation.
Department for Science, Innovation and Technology
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24
Accepted
The Government should introduce a mechanism for businesses that ‘graduate’ from proof of concept funding,...
Recommendation
The Government should introduce a mechanism for businesses that ‘graduate’ from proof of concept funding, to funnel them directly through subsequent stages of investment. (Recommendation, Paragraph 79)
Government Response Summary
The government partially agrees but does not believe a *new* framework is required, stating that existing actions like Investment Zones, DSIT/UKRI reforms, and place-based staff networks already support local innovation and funnel businesses through investment stages.
Department for Science, Innovation and Technology
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26
Rejected
In its response to this report, the Government should set out how it intends to...
Recommendation
In its response to this report, the Government should set out how it intends to ensure the Catapult network is more effectively targeted at addressing regional disparities, including its assessment of whether removing the imperative for Catapults to raise private …
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Government Response Summary
The government explicitly rejects the recommendation to remove the requirement for Catapults to raise private funding, arguing that the current mixed funding model ensures market responsiveness, prevents displacement of private activity, and provides flexibility to address regional contexts.
Department for Science, Innovation and Technology
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27
Accepted in Part
The Government and Innovate UK should develop a standardised and transparent set of performance indicators...
Recommendation
The Government and Innovate UK should develop a standardised and transparent set of performance indicators for the Catapults. These should include measures of industry engagement, commercialisation outcomes, support for technology and innovation adoption, regional economic impact, and wider societal benefits …
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Government Response Summary
The government agrees with the importance of clear performance reporting and states Catapults already use standardized KPIs, but commits to expanding data collection for innovation adoption and regional outcomes, and will implement an improved measurement approach before April 2028.
Department for Science, Innovation and Technology
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28
Accepted
There should be a minister in the Cabinet Office responsible for innovative procurement, supported by...
Recommendation
There should be a minister in the Cabinet Office responsible for innovative procurement, supported by a dedicated unit and responsible for exploring new approaches to engaging SMEs, spinouts, and scaleups, particularly those developing UK-owned intellectual property; and making use of …
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Government Response Summary
The government agrees, stating that Chris Ward is already the minister responsible for public procurement, including innovation. It is exploring the creation of a dedicated unit, appointing Innovation Champions, and highlights significant existing investments in defence innovation.
Department for Science, Innovation and Technology
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29
Accepted in Part
The Government should encourage the development of specialist investor capability in science and tech across...
Recommendation
The Government should encourage the development of specialist investor capability in science and tech across the UK, particularly in strategic deep tech sectors such as quantum. It should support the development of regional investor and investment readiness training programmes, expand …
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Government Response Summary
The government agrees with the intent, committing to stimulate private investment through the ProQure programme, expand the British Business Bank's capacity with £2.5 billion/year from 2026/27 to build specialist investor ecosystems, and develop specialist fund managers via a Venture Capital Fellowship and regional events, but it rejects the creation of investor envoys.
Department for Science, Innovation and Technology
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31
Accepted in Part
The Government should publish a long-term strategy for science infrastructure investment.
Recommendation
The Government should publish a long-term strategy for science infrastructure investment. It should instruct the British Business Bank to ring-fence a percentage of its funds to support the development of innovation infrastructure in partnership with the private sector. (Recommendation, Paragraph …
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Government Response Summary
The government partially agrees with the recommendation. It points to an existing UKRI roadmap guiding infrastructure investment up to 2030 and states DSIT is exploring options for a new framework. However, it rejects instructing the British Business Bank to ring-fence funds, arguing it would duplicate functions of the National Wealth Fund.
Department for Science, Innovation and Technology
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32
Accepted in Part
UKRI should revise its Infrastructure Roadmap to include a detailed mapping of existing capabilities, identify...
Recommendation
UKRI should revise its Infrastructure Roadmap to include a detailed mapping of existing capabilities, identify underserved regions, and prioritise infrastructure development that supports economic resilience and long-term growth. (Recommendation, Paragraph 102)
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Government Response Summary
The government partially agrees, citing past UKRI work on an infrastructure roadmap and landscape analysis. It commits to exploring options for a framework and toolkit to support R&D infrastructure investment decisions, but does not explicitly commit to revising the roadmap with all the specific details requested.
Department for Science, Innovation and Technology
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34
Rejected
The Government should publish a Regional Graduate Retention Strategy, backed by investment and cross-department coordination.
Recommendation
The Government should publish a Regional Graduate Retention Strategy, backed by investment and cross-department coordination. This should include support for university-industry collaboration to create high- skilled local employment, linked to analysis of public services such as housing, transport, and education …
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Government Response Summary
The government partially agrees but explicitly states it will not commit to a new Regional Graduate Retention Strategy at this time, asserting that existing policies such as Local Growth Plans, Investment Zones, and Local Skills Improvement Plans already address university-industry collaboration and local employment.
Department for Science, Innovation and Technology
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36
Accepted
Strategies to support increased industry adoption of technologies must have a regional focus, just as...
Recommendation
Strategies to support increased industry adoption of technologies must have a regional focus, just as industries are largely regionally focused. This will require targeted interventions that identify high-potential clusters, provide long-term investment to deliver the infrastructure for them to flourish, …
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Government Response Summary
The government agrees with the regional focus, committing £99 million to expand the Made Smarter Adoption programme from 2026, targeting SMEs across regions, and investing £52 million in a national network of regionally-based Robotics Adoption Hubs to drive technology diffusion locally.
Department for Science, Innovation and Technology
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37
Accepted
The Government should prioritise the diffusion and adoption of innovation and technologies across the UK.
Recommendation
The Government should prioritise the diffusion and adoption of innovation and technologies across the UK. This will require greater emphasis on building skills for smaller businesses; increased advice and support on regulatory matters for smaller businesses; making finance available to …
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Government Response Summary
The government agrees to prioritise diffusion and adoption, committing £99 million from 2026 to expand the Made Smarter Adoption programme for 5,500 more SMEs, extending it to the Professional and Business Services sector, implementing the SME Digital Adoption Taskforce recommendations, upskilling 10 million workers, expanding BridgeAI for SMEs, and investing £52 million in Robotics Adoption Hubs.
Department for Science, Innovation and Technology
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39
Rejected
The Regulatory Innovation Office should work with universities, SMEs, and spinouts to map the full...
Recommendation
The Regulatory Innovation Office should work with universities, SMEs, and spinouts to map the full pathway from research to market, identifying where disproportionate burdens or barriers exist. It should also publish a regional support strategy with measurable objectives and deliverables. …
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Government Response Summary
The government partially agrees, but emphasizes the Regulatory Innovation Office's focused role on regulatory barriers, stating that mapping the full research-to-market pathway and publishing a regional support strategy would cover issues beyond RIO's remit, which are addressed by wider government initiatives.
Department for Science, Innovation and Technology
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42
Accepted in Part
The Government should, in its response to this report, and on an annual basis thereafter,...
Recommendation
The Government should, in its response to this report, and on an annual basis thereafter, set out a framework to clarify the roles and responsibilities of sub-national authorities in the innovation landscape, particularly in areas that do not yet have …
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Government Response Summary
The government partially agrees with the aim of the recommendation but states a new framework is not required at this time. It argues existing actions through the English Devolution White Paper, Investment Zones, and UKRI reforms already support local leaders and address the committee's objectives.
Department for Science, Innovation and Technology
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43
Rejected
The Government should commission an independent review examining the link between R&D, new businesses and...
Recommendation
The Government should commission an independent review examining the link between R&D, new businesses and growth in jobs and GDP since 2008, and task it with recommending how to make public investment in R&D increase productivity, growth, and jobs. This …
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Government Response Summary
The government rejects the recommendation for an independent review examining the link between R&D, new businesses, and economic growth. It states that a substantial body of existing evidence already addresses these links at national and regional levels.
Department for Science, Innovation and Technology
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Conclusions (13)
1
Conclusion
Accepted in Part
Even in a digital age, physical proximity remains key to innovation and its commercialisation and absorption. Geographic clusters can drive productivity, foster concentrated networks of expertise, infrastructure and collaboration, and support regional growth, which is economically and politically important. Yet their success relies on sustained investment, established infrastructure and skills …
Government Response Summary
The government partially agrees, acknowledging the importance of a coordinated approach and impact tracking, but states a separate national framework for cluster development is not currently required. They commit to developing a more robust monitoring approach, including updating the Innovation Clusters Map this autumn to track priority cluster performance and R&D investment, and expanding the scope of data collected for future updates.
5
Conclusion
Rejected
Public support for R&D is not effectively designed to reach researchers and innovators that have not traditionally received large amounts of innovation funding – such as those in the regions. UKRI, the country’s biggest public innovation funder, has acknowledged the problem, but its new objectives are only the starting point …
Government Response Summary
The government explicitly disagrees that funding to Golden Triangle institutions should be contingent on demonstrating economic impact elsewhere, but states it already considers both national and local impact when evaluating R&D investments to maximise impact across the UK.
7
Conclusion
Acknowledged
While the most cutting-edge science may be best carried out in established centres of excellence, as Lord Vallance put it, there are centres of excellence across the country, in Cardiff, Durham, Edinburgh, Leeds, Manchester, Milton Keynes and Newcastle – amongst others. Traditional innovation hubs like London, Oxford and Cambridge are …
Government Response Summary
The government partially agrees with the principle of tracking regional R&D impact, stating it is strengthening transparency by publishing regional data and an Innovation Clusters Map with future annual updates, and will continue to refine data over time.
12
Conclusion
Not Addressed
The UK is flying blind when it comes innovation policy. It is unacceptable that the Government and UKRI cannot properly measure and map R&D spending and the accompanying private sector investment. Without clear, transparent measurement of what is being done and its impact, it is impossible to assess existing policies …
Government Response Summary
The government's response fails to address the committee's conclusion regarding the lack of proper measurement and mapping of R&D spending and private sector investment, instead discussing its support for investor-led vehicles and university commercialisation.
18
Conclusion
Not Addressed
Some university technology transfer offices have made a significant contribution to their local economies. Others, however, are underperforming, leaving academic founders without the support and expertise needed to scale. (Conclusion, Paragraph 57)
Government Response Summary
The government response discusses public procurement for innovation and defence investment in novel technologies, but does not address the committee's observation about underperforming university technology transfer offices.
22
Conclusion
Not Addressed
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 …
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.
25
Conclusion
Rejected
The Catapult network has the potential to help drive innovation and economic growth across the UK’s regions, but in regions with low R&D intensity and limited public investment, Catapults risk competing with local bodies for funds rather than fostering knowledge diffusion. (Conclusion, Paragraph 82)
Government Response Summary
The government rejects the committee's observation, stating it disagrees with the recommendation and referencing a substantial body of existing evidence and research on the economic impacts of public R&D investment at national and regional levels.
30
Conclusion
Not Addressed
Infrastructure deficits can be a major barrier to scaling up innovation, commercialising research, and ultimately to regional growth. Planned reforms to the Green Book offer an opportunity to rebalance regional investment, but their impact will depend on effective implementation. Scientific infrastructure plans should be aligned with those for services such …
Government Response Summary
The government partially agrees in principle but provides a response focused on UKRI's existing infrastructure roadmap and exploring a new framework/toolkit for investment decisions. It does not specifically address aligning scientific infrastructure with transport plans or the effective implementation of Green Book reforms as outlined in the conclusion.
33
Conclusion
Accepted
We are concerned by an apparent tendency to place major new scientific institutions in London by default. This compounds the challenges other regions face in attracting and retaining graduates and skilled professionals, despite their world-class universities and thriving innovation hubs. Disparities in salaries, access to funding, and quality of public …
Government Response Summary
The government partially agrees, acknowledging the role of university-industry collaboration in local growth but does not commit to a new Regional Graduate Retention Strategy. It highlights existing policies like Local Growth Plans and LSIPs that support local employment opportunities and skills development across regions.
35
Conclusion
Accepted
The UK’s strengths in cutting-edge science have been hampered by low rates of technology and innovation adoption, particularly among SMEs and in non-tech sectors. This is the low-hanging fruit of innovation policy: the investment needed to support businesses in adopting technologies could have a transformative economic impact in regions and …
Government Response Summary
The government agrees with the observation, detailing significant investment to expand the Made Smarter Adoption programme with £99 million from 2026, extend it to new sectors, implement the SME Digital Adoption Taskforce recommendations, and commit £52 million to new Robotics Adoption Hubs to improve technology adoption.
38
Conclusion
Acknowledged
The establishment of the Regulatory Innovation Office is a welcome recognition of the need to tackle regulatory barriers to innovation, particularly at the cutting edge. We believe that it can play a significant role in ensuring that innovation benefits the whole of the UK, beyond the and we will be …
Government Response Summary
The government partially agrees, confirming the Regulatory Innovation Office's focused role in identifying and addressing regulatory barriers for priority technologies and its annual reporting of progress and impact, while noting broader issues are handled by wider government activity.
40
Conclusion
Acknowledged
Local leaders, including but not only mayoral authorities, are pivotal to regional innovation ecosystems and regional growth. Their proximity to stakeholders, understanding of their areas, and ability to convene cross- sector partnerships position them uniquely to drive growth. Devolved national, regional and local authorities could play a greater role in …
Government Response Summary
The government partially agrees with the observation, highlighting ongoing initiatives like the English Devolution White Paper and Investment Zones to support local leaders in unlocking regional innovation potential. It references DSIT and UKRI reforms to build partnerships and increase regional R&D funding, but does not commit to new initiatives for local authorities matching UKRI funding.
41
Conclusion
Acknowledged
The Local Innovation Partnerships Fund’s ambition to give regions more control over innovation policy is welcome, but it falls short on scale, with just £500 million over five years, or around 0.5% of the science budget. (Conclusion, Paragraph 130) 49
Government Response Summary
The government acknowledges the Local Innovation Partnerships Fund as a starting point and the UK's largest cluster-focused regional programme, stating it will monitor outcomes and build upon it if successful, but does not commit to increasing its scale.