Business and regional leaders call for overhaul of region’s ‘finance ecosystem’
A new independent report has been published today (July 23) which outlines the steps needed to deliver more investment-ready businesses and a stronger finance pipeline for every stage of business growth across the North West.
‘Finance and Innovation – Essential Enablers for Future Business Growth’ was commissioned by the North West Business Leadership Team and supported by promanchester, the Liverpool Chamber of Commerce, Innovate UK and the City Region Mayors of Liverpool and Greater Manchester.
Report author, Lee Hopley, began her research prior to the onset of COVID-19, work that has been informed by interviews with both businesses and investors from across the region and beyond.
The recommendations focus on the support that is required for a more dynamic and resilient business sector that can adapt to the ‘new normal’ while embracing technology solutions and innovation.
Increased angel investment and early stage risk capital is also crucial.
Task group chair, Richard Gregory – senior advisor Virgin Money UK – launched the report, saying: “Our entrepreneurs and innovative businesses are crucial for our recovery.
“They are the future wealth creators of our economy, never has it been more urgent to understand how best to support their successful development.
“Key to this is the need to ensure that they have access to an adequate supply of finance. Simply increasing the pool of available capital alone will not be sufficient for the region’s future growth needs.
“We need to better equip innovative and scaling businesses with the skills, knowledge and networks to access the right finance at the right time.”
While many of the issues identified in the report are common to other UK regions.
The report identifies the significant opportunities for devolved and national bodies to work together to drive change, with opportunities for local actions to significantly improve the financing landscape for innovative businesses.
Some will require partnership across the region and, at least in the immediate aftermath of this recession, engagement at a national level to effectively support the future engines of growth across the North West.
Liverpool City Region Mayor Steve Rotheram said: “Before the crisis struck, the Liverpool City Region had the fastest economic growth in England at 3.5% a year and well above average productivity growth.
“Our innovative growth businesses were central to this.
“To keep improving on our performance it is clear that these businesses will require varied sources of funding and high-quality advice to help them access it. This report is a timely and useful contribution to the debate on how we develop a strong finance and support landscape for businesses as part of building back better.”
Greater Manchester City Region Mayor, Andy Burnham, said: “We know how important it is that Greater Manchester’s vibrant and innovative industries are able not only to recover, but accelerate to meet the new challenges posed by the current climate.
“Throughout the crisis we’ve listened to the voices and experiences of business leaders, working to ensure local businesses can access the support and information they need.
“This work from the North West Business Leadership Team shows the vital role which innovation finance must play. From digital connectivity and decarbonising infrastructure, to manufacturing supply chains and skills training, our response to the pandemic will shape the growth and resilience of our region for years to come.
“We have an opportunity to build back in a way that’s better, fairer, and more prosperous for everyone in the North West, and we cannot afford to miss it.”
Neil Ashbridge, chair of Liverpool Chamber of Commerce, said: “This report commissioned by the NWBLT is useful and timely given the recent economic shock caused by the COVID-19 pandemic.
“As economic activity recovers it will be vital that SMEs can access funding to rebuild sales and to invest in new processes, products and services.
“The report also highlights anomalies in the provision of funding to SMEs, not only across the UK, but within the North West, and it is important these are addressed. It provides decision makers in the public and private sectors with a helpful roadmap when considering how to support SMEs access funding and, importantly, the most appropriate funding for their business.”
Sam Booth, promanchester chief executive, said: “Promanchester were delighted to be invited to support the NWBLT with this fundamental piece of research and never could its release have been more timely.
“Amid these most unprecedented and challenging times it is now more important than ever to safeguard and provide necessary support to the development of our future businesses and economy.
“What this report highlights is that whilst the finance may well be available, the pathway to access is not as clear. Support mechanisms, networks and education play a key role in getting businesses on the right path to securing the right finance at the right time.”
Rick Holland, regional manager of Innovate UK, North West England, concluded: “Innovation requires ideas, talent and, usually, finance.
“These are inter-dependent, and I am pleased to have supported this study throughout to understand how we can all improve the financial landscape for innovators in the North West.”
The report calls for nine actions to create ‘dynamic finance ecosystem’ in the North West and power-up innovation.
It points out that regional funding streams are ‘fragmented’ and simply increasing the pool of available capital will not be enough for the region’s growth needs.
It adds that flow in finance, plus management skills, will be essential in bouncing back from any COVID recession, and that there are significant opportunities for devolved and national bodies to work together to drive change.