Columnist

Why innovation needs more than good ideas

The North East has a strong track record of innovation.

Its industrial heritage has provided the foundations for expertise in areas such as manufacturing and energy, while its universities and research institutions continue to develop new ideas and technologies.

Today, that expertise is creating opportunities in some of the sectors expected to shape the UK economy over the coming years, including clean energy, advanced manufacturing, digital technologies and life sciences.

The opportunities for the region are significant, but developing a successful innovation economy takes more than generating good ideas.

The conditions must be created for businesses to commercialise good ideas, scale and become significant employers and contributors to the regional economy.

For ambitious businesses, finance can be critical at several points in that journey.

Developing new technologies or bringing a product to market can require substantial investment, often before a business has established significant revenues.

As companies grow, they may then need further capital to continue developing through research and development.

Access to the right type of finance at the right time can, therefore, determine whether a business is able to take its next step.

This business investment also carries wider benefits for local communities.

When businesses successfully secure investment and grow, they can create skilled employment, develop supply chains and attract further investment into the region.

Over time, this can help strengthen the wider ecosystem and create more opportunities for the next generation of businesses.

There is already significant expertise and activity across the North East, with investors, universities, businesses and other organisations supporting innovation.

The focus should now be on continuing to build these connections and ensuring businesses can access capital as they move through the different stages of growth.

This is where public investment can play an important role alongside private finance.

We are seeing this through the Northern Powerhouse Investment Fund II (NPIF II), which has facilitated almost £275 million into more than 400 businesses across the North since launching in 2024, including more than £122 million in private sector co-investment.

In the North East, we’re already seeing the impact it can have.

A good example is Newcastle-based MySalesCoach, which secured a £1 million investment from NPIF II – Maven Equity Finance alongside an additional £500,000 from existing investors.

The funding is being used to develop its technology platform and expand its sales and marketing activity, all with the aim of growing globally.

Multiply this across all the businesses that could benefit, and it has real benefits for the UK as a whole.

The British Business Bank’s new Innovation Clusters provide another opportunity to progress.

The North East has been allocated £12 million as part of more than £57 million being invested across five Innovation Clusters in the North.

Delivered through NPIF II, the funding will enable further equity investment into businesses operating across a wide range of sectors including those identified as priorities within the Government’s Industrial Strategy. 

Ultimately, the ambition should be to create an environment where innovation can translate into sustainable businesses and long-term economic value.

The North East has the research, expertise and entrepreneurial talent to make this happen, and ensuring businesses can access finance as they grow will be an important part of turning that potential into reality.

Sarah Newbould is associate director at British Business Bank

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