Dr Chris Low, CEO at Sheffield Olympic Legacy Park, comments on the government’s recent Autumn Statement, and the path to growth for medtech.
The government has the ambition of making the UK a ‘Science and Technology Superpower’ and life sciences has been recognised as a valuable and vital part of the UK economy many times over recent years. However, this sits against the backdrop of a stagnating economy where growth and productivity constantly seem to allude us. This begs the question: how can we leverage these phenomenal sector assets to achieve growth? It is my view that attracting Foreign Direct Investment (FDI) is key.
Lord Harrington was recently commissioned by the government to undertake a review into Foreign Direct Investment into the UK. I was pleased to contribute to this report and meet directly with him to use our experience, and that of the early-stage companies we support, to influence policy. His excellent review involved engaging with investors, science parks, companies, and other stakeholders to understand why FDI has been stalling in recent years and what we can do to attract and facilitate it into our high growth companies.
I was delighted that the Chancellor accepted all of Lord Harrington’s headline recommendations in principle in his Autumn Statement and included a promise to provide funding to the Office for Investment in order to make these recommendations a reality. While the Statement has had a mixed response overall, the FDI component of it is a very positive step forward.
The independent and comprehensive way in which this was carried out has resulted in the shadow chancellor also indicating support for it, which is a helpful signal to investors that policy in this area will be stable and consistent regardless of the forthcoming election result. The impact of this cannot be overstated given the diminishing goodwill towards the UK was partly driven by the political and economic uncertainty of recent years.
FDI has historically referred to large companies relocating to, or investing in, the UK. We have seen the benefits this can bring through the investment provided by Canon Medical Systems into the Canon Medical Arena, recently opened at the Sheffield Olympic Legacy Park. However, FDI is increasingly referring to internationally mobile investors (venture capital and private equity) who are looking to back early-stage start-up and scale-up businesses, many of which are in the healthtech sector. This could represent a huge influx of capital that would enable many of these high potential businesses to scale and lift the anaemic growth levels of the last decade.
While HM Treasury, the Department for Science, Innovation and Technology and the Department for Business and Trade still hold lots of the ‘levers’ needed to attract and facilitate FDI, they need to take a sub-national approach and lean into the devolved structures and investment zone (IZ) mechanisms to do it effectively.
This was expressed in Lord Harrington’s third recommendation, which was for government to build on the success of metro mayors and devolved administrations to expand the ‘place based’ offer to investors. The government accepted this and recognised the need to deliver a more co-ordinated promotion offer and to develop ‘investment ready’ propositions. If executed correctly, this could be very impactful.
International investors often focus on the ‘golden triangle’ because many of the potential investments are in one easily recognisable place with a long history of clustering. IZ based vehicles are necessary to aggregate the investment opportunities and make the overall offering big and attractive enough to international investors – this is a key role for us at Sheffield Olympic Legacy Park and has been recognised by Policy Exchange, who highlighted the Park as an exemplar for a potential IZ. This is partly why we are currently in the process of creating our own investment vehicle based on our key verticals of healthtech, foodtech and sportstech.
The Sheffield Olympic Legacy Park began life as a major regional stakeholder that could attract and convene significant private, academic, and public sector organisations but has since emerged as a national player capable of attracting global investors, blue-chip corporations and some of the most innovative businesses. I know this can be done.
When taken together with the pension reforms – which aim to increase domestic investment flows into areas such as medtech – the FDI measures accepted by the government should have a transformative effect on growth. I only hope policymakers keep focused and constantly look for ways to unlock, facilitate and accelerate the fantastic work healthtech companies and organisations are already doing. As decision makers look under the tree this year, I’m sure many are hoping to find policy stability and predictability – what a surprise those would be!
First published by MedTech Innovation News on 11 December 2023