Conclusion 1

UKRI and the Department are thinking creatively about how the government can support emerging innovative businesses, but there is more to do to translate this into results. We received evidence that small businesses often find publicly funded research infrastructure opaque, slow and expensive to access, and unsuited to their needs. UKRI provided several examples of how it is supporting businesses, and AI companies in particular. For example, it provides free time on publicly-funded supercomputers to startups carrying out strategically significant AI research and development. The Department acknowledged the government could still do more to be a better customer, given the potential for government procurement to help technology companies to grow. However, the Department has recently changed its procurement approach to make it more likely that UK companies will supply some of the £400 million worth of specialised AI chips it plans to purchase. Disappointingly, British companies still find it much harder than their US counterparts to obtain the capital investment they need to grow while remaining based in the UK. We welcome the government’s review of how it is supporting businesses to ‘scale-up’, and the Department’s attempts to strengthen links between UKRI’s grant recipients and government-funded sources of capital such as the British Business Bank and the National Wealth Fund. recommendation The Department should develop quantitative metrics covering its various support mechanisms for businesses, beyond just grant funding, and which allow comparisons between years. It should report on these annually. Together with other information, these metrics should allow the Department’s overall progress in supporting scaling businesses to be monitored.