Source · Select Committees · Public Accounts Committee
Recommendation 25
25
Accepted
UK excels in R&I spin-outs but struggles with commercial scaling amidst intense global competition.
Conclusion
The government considers R&I and the diffusion of new technologies to be vital to the UK’s future and to achieving its mission to grow the UK economy.65 Achieving this growth will require UK companies to successfully scale up their commercial exploitation of R&I.66 Professor Boyle told us that while the UK has a good record of spinning out commercial ventures from R&I, it has been less successful at scaling up these ventures.67 As well as the inherent challenges of achieving commercial success, we heard from UKRI and Professor Grant that the UK now faces intense challenge from competitors.68 Professor Grant told us that other countries are developing extraordinary science bases, and doing so at a huge pace.69
Government Response Summary
The government agreed with the Committee's conclusion on the importance of scaling innovation, reiterating its commitment through the Industrial Strategy, the new Proof-of-Concept fund, and an integrated approach to provide the right policy environment for firms.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2026 6.2 DSIT will publish allocations to UKRI in Autumn 2025, and UKRI’s allocations will be published by Spring 2026. 6.3 DSIT and UKRI will draw on a variety of data sources to understand where to have the greatest impact on scaling innovation domestically. This involves not only assessing where there is strength in research, but also where there are existing or nascent industry strengths, absorption capacity and identifiable market failures. 6.4 UKRI has recently launched the first round of the new discipline agnostic Proof-of-Concept funding opportunity. Understanding the full impact will only be possible after the first rounds of projects conclude and are evaluated (evaluation dates not yet confirmed). Early insights will contribute to allocation decisions. 6.5 Scaling innovation is not a linear pipeline from research to scale-up but instead requires an integrated approach across different actors (both private and public) that provides the right policy environment for innovative firms at every stage of their growth journeys. The government’s Industrial Strategy set out how we plan to achieve this. This includes better engagement and alignment between UKRI, the British Business Bank, the National Wealth Fund and other public finance institutions through the new Strategic Public Investment Forum, plus more effective use of public procurement to buy from innovative suppliers, and removing regulatory barriers to scaling. 6.6 In deciding the aforementioned allocations, DSIT will consider the impact on the financial sustainability of university research. DSIT uses analyses of Transparent Approach to Costing data, as well as insights and analyses provided by UKRI, to understand the financial challenges universities face within the R&I system.