19th June 2023
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Keira Shepperson, Director of Regional Funds at the British Business Bank explores the Northern Powerhouse Investment Fund’s role in driving forward innovation in the Northern business landscape and discusses the dual pronged approach needed to create meaningful change.
Innovation and technology are the lifeblood of economic progress, and in today’s rapidly evolving business landscape, they have become essential tools for businesses aiming to stay ahead of the curve.
The Northern Powerhouse Investment Fund has emerged as a significant catalyst in the North, driving transformation across major industries by providing crucial investment and support to innovative businesses
In many cases, NPIF investment proved to be a springboard for businesses, igniting a wave of innovation and technology adoption that is reshaping the face of the British economy.
It makes NPIF an attractive option for innovative growing businesses and university spin outs. In April, NPIF participated in a funding round for Productive Machines, an artificial intelligence (AI) startup and deep tech company from The University of Sheffield Advanced Manufacturing Research Centre.
Traditional industries, such as manufacturing, logistics, and agriculture, have long formed the backbone of the UK economy, and have often been marked as industries resistant to change. However, with the emergence of disruptive technologies and changing consumer preferences, these sectors have faced the need to adapt and reinvent themselves.
NPIF recognises this challenge and aims to bridge the gap by injecting funds into businesses eager to transform through innovation.
Glider is good example of this. The Prop Tech firm produces software that is used by many of the UK’s biggest construction companies. The software enables architects and contractors to share project information and models in the early stages of design and construction. Its new platform, Gliderbim, helps to minimise safety risk, improve efficiency and comply with the new Building Safety Act.
In May 2023, the Clitheroe-based company secured a seven-figure loan from NPIF – Mercia Debt Finance and Mercia’s SME Loans fund, to support its growth. The investment will aid the growing demand Glider is experiencing as the industry shifts towards digital solutions. Construction firms and property managers are increasingly adopting digital technology to improve efficiency and sustainability and comply with new safety standards.
This shift towards integrating technology within traditional industries is wide-ranging. NPIF’s investment into Leeming Bar-based Fall Timber is another example of how finance has been used to embrace cutting edge technological solutions.
The sustainable timber merchant, Fall Timber, secured a six-figure investment from NPIF – BEF & FFE Microfinance in April 2023. The company needed a small amount of capital to invest in technology and help fulfil growing customer demand and looked to NPIF’s microfinance offering to achieve this. With the assistance of technology, Fall Timber will significantly expedite its timber supply process, leaving behind the labour-intensive nature of traditional timber cutting methods.
The new approach not only enhances productivity and meets customer demand more efficiently, it also sets an example for other timber businesses to reimagine their operations. This forward-thinking approach demonstrates that even longstanding industries can leverage innovation to stay competitive in a rapidly evolving marketplace.
NPIF’s investment not only propels individual businesses to embrace the digital era and adapt, but also drives a larger cultural shift, facilitating a wave of technological advancements across traditional industries.
Innovation is a two-sided coin
NPIF has played a vital role in enabling the two strands of innovation to thrive in the North: the supply of new-to-market innovations like new technology and software, as well as the adoption of innovations by businesses and the diffusion of innovations throughout industries.
The Fund looks to invest in businesses that are on both sides of the innovation spectrum – those like Glider, that look to create new solutions and form the vanguard of British innovators, as well as businesses like Fall Timber, which look to leverage technologies to streamline their processes. By providing access to capital, NPIF propels businesses towards their innovative aspirations.
The British Business Bank’s Small Business Finance Markets 2023 report explores, in part, the role of finance in supporting innovation, and the two aspects this encompasses. The UK performs well on innovation when measured generally against G7 nations. The 2022 Global Innovation index ranked the UK fourth, marking it as a global leader. However, the proportion of Innovative UK SME’s ranks in the bottom three, relative to other G7 nations. The stark contrast suggests that the UK suffers from a suboptimal rate of innovation adoption by smaller businesses.
NPIF’s approach to investment has enabled businesses in the north to access funding and support to follow their ambitions and innovate. The latest NPIF interim evaluation provided evidence that the funding had enabled businesses to invest in their skills, efficiency and innovation.
The interim evaluation of NPIF confirmed the role it plays in supporting research and development (R&D) activity. 68% of debt funding recipients reported the introduction of more efficient processes, 65% introduced new products or services to market, and 53% increased investments in R&D.
Innovation and technology are revolutionising the economy, reshaping the way traditional industries operate and opening new possibilities for growth. By providing crucial funding and supporting R&D, NPIF has catalysed the transformation of businesses in the North, supporting innovation and driving economic growth across the Northern Powerhouse region and beyond.
The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.
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