Region records England's highest rates of exits and scale-ups among innovation-backed businesses
The East Midlands is outperforming every other English region at turning innovation into commercial success, according to new research from NatWest.
Analysis published in NatWest's From Innovation to Impact report found that 13.1% of innovation grant recipients in the East Midlands have achieved an exit, while 8.6% have demonstrated recognised scale-up growth.
Both measures are the highest recorded among English regions and exceed UK averages of 10.4% and 6% respectively.
The findings place the East Midlands ahead of better-known innovation economies including London, the South East and East of England when it comes to generating commercial outcomes from publicly backed innovation.
The region is home to 1,333 innovative businesses and 663 recipients of public innovation grants, reflecting strengths across advanced manufacturing, engineering, transport technologies, logistics and university-led innovation.
NatWest's From Innovation to Impact report suggests the East Midlands demonstrates the value of combining research excellence with strong industrial capabilities and established business ecosystems, helping innovative firms progress from development to commercial growth.
The findings come as regional leaders increasingly focus on innovation-led growth as a driver of productivity, investment and high-skilled employment.
While the region leads England on exits and scale-ups, the report also highlights significant headroom for future growth.
Analysis found that 42.4% of grant-backed businesses remain active but have not yet secured follow-on investment, achieved an exit or demonstrated recognised scale-up growth, compared with a UK average of 38.1%.
NatWest describes these firms as part of the UK's "untapped innovation cohort" – businesses that continue to innovate and trade but have not yet achieved a tracked commercialisation outcome.
The report argues that helping more of these businesses access finance, talent, customers and commercial networks could build on the East Midlands' already strong commercialisation record.
Across the UK, businesses interviewed for the report consistently identified access to finance, leadership capability, routes to market and strong local innovation ecosystems as important factors in helping them grow.
NatWest argues that regions with strong industrial bases, established supply chains and close collaboration between businesses, universities and support organisations are particularly well placed to capture more of the economic value created by innovation.
NatWest says examples such as this demonstrate how strong regional ecosystems can help innovative businesses move from development to commercial success, creating jobs, attracting investment and supporting long-term economic growth.
The report argues that successful commercialisation depends on more than research and development alone. Businesses consistently identified access to finance, expertise, networks and routes to market as critical factors in helping them scale. Through its Accelerator network, Venture Banking proposition and specialist support for innovation-led businesses, NatWest works with founders and growth companies across the UK to help connect them with the capital, insights and commercial opportunities needed to turn innovation into sustainable growth.
Dipesh Mistry, Chair of the NatWest Midlands and East of England Regional Board, said: "The report shows that the East Midlands is already producing some of England's strongest commercial outcomes from innovation, but it also highlights a sizeable group of businesses that are still working to make the leap from innovation to commercial scale.
"That's something we see regularly across our network. Businesses often have the technology, the ambition and the market opportunity, but they also need access to the right networks, expertise, customers and finance to grow.
"The opportunity for the East Midlands is not simply creating more innovators. It's helping more existing innovators scale successfully and ensuring the region captures the jobs, investment and economic value that innovation can create."
The report concludes that the East Midlands has many of the ingredients needed to support innovation-led growth and is well positioned to build on its reputation as one of England's strongest commercialisation success stories.
For further press information, please contact Jessica Barker, Corporate Affairs Manager at NatWest: jessica.barker@natwest.com
About NatWest’s research
The findings are drawn from NatWest's From Innovation to Impact report, which examines how the UK can better convert innovation into commercial growth and regional economic prosperity.
The analysis was conducted by Beauhurst on behalf of NatWest and is based on a dataset of 12,381 UK companies that have received at least one publicly disclosed innovation grant since 2011, including Innovate UK funding. Of these, 12,199 grant recipients were included in the commercial outcomes analysis.
Companies were assigned to one of five mutually exclusive outcome categories:
- Exited – acquired, listed on a stock market or sold to new owners
- Follow-on Equity – secured additional equity investment
- Scaling – demonstrating high-growth characteristics without a recorded equity event or exit
- Untapped Innovation Cohort – still trading but without a recorded exit, follow-on equity investment or recognised scale-up signal
- Ceased – no longer operating
Regional analysis is based on companies' registered addresses.
Throughout the report, the term "untapped innovation cohort" refers to businesses that remain active and continue to innovate but have not yet secured follow-on investment, achieved an exit or demonstrated a recognised scale-up signal.
Follow-on equity figures include all subsequent equity investment raised by grant recipients and should be interpreted as an association rather than a direct measure of grant impact.
For the full report, see here.
About NatWest
NatWest serves customers in England and Wales, supporting them with their personal, private, and business banking needs. NatWest helps customers at all stages in their lives, from opening student accounts, to buying their first home, setting up a business, and saving for retirement.
Alongside a wide range of banking services, NatWest offers businesses specialist sector knowledge in areas such as sustainable energy, commercial property and technology, as well as access to specialist entrepreneurial support.
