More than 800 innovative businesses across the North of England could help drive the region's next wave of jobs, investment and economic growth, according to new NatWest research.
Analysis published in From Innovation to Impact Report identified 836 grant-backed businesses across the North West, Yorkshire and the Humber, and the North East that remain active and trading but have not yet secured follow-on investment, achieved an exit or demonstrated recognised scale-up growth. NatWest describes these firms as part of the UK's "untapped innovation cohort" - innovative businesses with significant unrealised growth potential.
The findings come as the North continues to strengthen its innovation economy through investment in research, commercialisation and business support. Home to 4,257 innovative businesses, 2,145 recipients of public innovation grants and 516 academic spinouts, the North has become one of the UK's most significant centres of innovation outside London and the South East.
While innovative businesses across the North have already attracted more than £8.9 billion in follow-on equity investment, the report suggests there remains substantial potential to generate further growth. It found that 39.0% of grant-backed businesses in the North West, 39.1% in Yorkshire and the Humber, and 38.6% in the North East fall within the untapped innovation cohort, all broadly in line with the UK average of 38.1%.
NatWest argues that the North's next economic prize lies not in creating more innovation, but in helping more innovative businesses achieve commercial scale. Supporting firms within the untapped innovation cohort to access finance, talent, expertise, networks and routes to market could unlock significant new jobs, investment and productivity growth across the region.
The North already has a strong track record of commercialising innovation. Among grant-backed businesses, 228 have achieved successful exits, 450 have secured follow-on equity investment and 150 have demonstrated recognised scale-up growth. The report suggests helping more businesses follow a similar path could strengthen regional productivity and attract further investment into northern economies.
One example highlighted in the report is the Electech Innovation Cluster, a business-led electronics cluster covering Lancashire and South Cumbria. Bringing together businesses, colleges, universities and industry partners, the cluster is helping firms tackle skills shortages, strengthen commercial networks and access new market opportunities.
The report points to initiatives such as Electech as examples of how strong local innovation ecosystems can help businesses access capabilities that would be difficult to develop independently, supporting the transition from innovation to commercial growth.
Malcolm Buchanan, Malcolm Buchanan, Chair of the NatWest North Regional Board, said: "The North is producing innovative businesses at scale. What this report highlights is the opportunity to help more of those businesses realise their full commercial potential.
"Across the region we see ambitious firms developing world-class technologies and solutions. The challenge is ensuring they can access the finance, expertise, skills and commercial connections needed to grow.
"If more of these businesses can scale successfully, the prize for the North could be significant in terms of jobs, investment and long-term economic growth."
The report concludes that the North already possesses many of the ingredients required for innovation-led growth. Building on strong foundations in research, entrepreneurship and industry, the opportunity now is to help more innovative businesses translate innovation into long-term economic impact.
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.
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.
