Four years ago, we launched the Government and UKRI’s flagship, business-led Industrial Strategy Challenge Fund. It is a new approach to funding challenges ranging from net zero, health and wellbeing through to advancing technologies, aiming to create a better world for us all.
The fund has access to £2.6 billion to invest in exciting challenges ranging from Quantum Technologies and Robotics, through to Small Modular Reactors. We are already seeing the projects we are funding have an economic impact right across the country by driving innovation, creating jobs and establishing the UK as a global destination for science and innovation.
The Challenge Fund has delivered significant success already and has further to go. It is estimated £1.1 billion of additional net turnover has been generated in participants of completed projects.
To break this down, this delivers an average £4.1 million in additional net turnover for each project participant, the majority being Small and Medium Enterprises (SMEs).
Challenge Fund Highlights
- 43% of Challenge Fund grants administered through Research Councils directly involve a business, demonstrating great engagement with companies
- 22% of Collaborative R&D grants involve multidisciplinary collaboration, higher than 15% of non-Challenge grants. This shows the Challenge Fund is driving multidisciplinary research – which is one of its stated aims
- 44% of grants have both an academic and a business partner, which is 26% higher than other UKRI grants, enabling collaboration between industry and academics
- 28% of Challenge Fund grants involve both a large company and an SME, highlighting the fund is an effective tool for fostering collaboration across the value chain
This success is due to landmark collaborations between research and industry to support commercialisation, connecting businesses, and providing access to skills and facilities to create innovative solutions.
The Challenge Fund directly supports the goal of achieving net zero carbon emissions by 2050.
Notable projects include creating new offsite techniques in construction such as through the Advanced Industrialised Methods for the Construction of Homes (AIMCH) project; pioneering greener ways of flying through advances in electric and autonomous flight technology and developing the world’s first net zero carbon industrial cluster by 2040.
Health and wellbeing activity is also fundamental for supporting critical COVID-19 vaccination projects, as well as building the UK’s resilience against future pandemics.
Currently, a £66 million investment in a Vaccines Manufacturing Innovation Centre is being accelerated to deliver 70 million pandemic vaccine doses in 2021, as well as supporting businesses such as Cobra Biologics and Oxford BioMedica in the fight against the virus.
The Challenge Fund helps accelerate the growth of innovative UK SMEs and builds resilience in this important business community.
Investment projects have included technology and vehicle start-up, Arrival. The business has developed a smart, electric van that is already being trialled by UPS as part of its transition to a zero emissions fleet. The funding has enabled Arrival to become one of the UK’s largest unicorns. Furthermore, Bristol-based Robotics company, ROVCO has accomplished a revenue increase from £0.5 million to £10 million due to its investment from the ISCF Robots for a Safer World Challenge.
Overall 63% of all project participants anticipate that annual turnover will increase as a result of engaging with the Challenge Fund.
Looking to the Future
As new economic and societal challenges continue to come to the fore, such as the impact of COVID-19, as well as the UK forging a new outward-looking future outside of the EU and across globe, we need to go even further to support the ambitions of the R&D Roadmap.
To do this, we will drive greater exploration of industry collaboration, do even more to support new and emerging industries, push for greater regional regeneration and take a more flexible and agile approach to deliver results.
We recognise we need to continue to enable innovative businesses to grow and develop, so that by working in partnership we can grow the UK economy.
As we look to the rest of 2020 and beyond, we will be using the Investing for Impact campaign to highlight how the Challenge Fund is playing its part to build a strong economic future for the UK.
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