Yesterday (20th July 2021), the UK government opened up its new £375 million scheme designed to drive investment in innovative UK firms.1 The scheme, Future Fund: Breakthrough, is proposed to help high-growth, R&D intensive companies bring game-changing technologies to market. The scheme will span multiple industries including life sciences, quantum computing, and clean technology.
It will be interesting to see whether and how this scheme will change the landscape of innovation in the UK. One indicator of commercially focused innovation is the number of patent applications being filed, and so we would expect to see a rise in the number of new patent applications being filed by the companies benefitting from this scheme.
Whilst the UK is well known for scientific developments and has an international reputation for scientific research, data provided by the EPO suggests that UK-based companies are currently lagging behind in terms of protecting new ideas. Figure 1 shows that the UK currently ranks in 9th place behind the US, Japan, China, Korea and several European counterparts, including France and Germany. Notably, the filing numbers for most of the top ten countries are generally flat over the past decade, with the exception of the US, China, and South Korea. This may be an indication that Europe, including the UK, is falling behind other major jurisdictions.
Figure 1. Number of European patent applications per country of residence of the first named applicant. Data is shown for the top 10 countries in 2020. Data points for GB are highlighted with blue boxes. European patent applications include direct European applications and international (PCT) applications that entered the European phase during the reporting period. This figure has been produced using data published by the EPO, which is accessible at https://www.epo.org/about-us/annual-reports-statistics/statistics.html
If the UK economy is to see the most benefit from this scheme, the UK companies taking part will need to retain ownership of their technological advances and protect their investment. An additional drive in innovation could be part of what the UK needs to move up this ranking and drive the economy forward.
The new scheme is only applicable to firms looking to raise at least £30 million of investment, and to be eligible the applicants must already have commitments of 70% of an investment round from private investors. The scheme therefore appears to be designed to encourage investors to put money into larger scale operations rather than fund innovation within smaller UK firms. As a result, we also hope that future schemes will emerge that provide support for smaller operations as start-ups and SMEs offer significant growth prospects but may find access to capital more difficult.