Recommendation 19

Other factors that may have influenced the reduced participation of smaller businesses include insufficient communication about the Fund reaching SMEs, limited capacity within SMEs to participate in collaborative bids, and the lengthy approvals processes for funding.51 We received written evidence from Universities Scotland, which told us that “insufficient communication and notice of calls severely limits breadth and excellence” of the research and innovation funded by the Fund. This issue is particularly relevant to small and medium sized enterprises which have limited resources both in terms of people and resources available for co-investment to engage in collaborative bids.52 UKRI assured us that it is working hard to ensure it is reaching all the businesses that would want to and could contribute and that it has engaged as early and as widely as possible. It asserted that its approach had meant it had been able to reach new participants and that 73% of the businesses that had participated in the Fund had not had any previous interaction with UKRI.53 But it acknowledged it has tended to work in a “fairly generic way” – for example, with regard to setting coinvestment requirements. It recognised that a different approach could help engagement. It told us that it needed to be more conscious of differences in the research and business communities, and that “the mix of big and 47 Q 21; C&AG’s Report, para 5, 2.7, Figure 7 48 C&AG’s Report, para 2.9 49 Q 40 50 Q 41 51 Ev ICF0001, para 1–2, 7, C&AG’s Report, para 2.9. 52 Ev ICF0001 53 Qq 38, 41 Industrial Strategy Challenge Fund 15 small players is different”, within each challenge. It acknowledged that it could take a more flexible approach to targeting its timing of engagement with particular parts of the business community.54 Regional distribution of funding