UK-based Tech Companies

Mark Sewards Excerpts

Wednesday 11th March 2026 Westminster Hall

[Chris Evans]

I stand corrected, Mr Betts—I was in meetings all morning, so I have not seen the sports news yet.

For constituencies like mine, which were dependent on heavy industry, the development of high technology offers new growth opportunities that we can harness in our valley communities once again. I want to focus my comments on a company called Academii. Academii helps organisations improve their workplace training by replacing one-size-fits-all learning with streamlined content, smart delivery and measurable outcomes. It is used by major employers in the energy and utility sectors, as well as by the NHS, community health boards and international clients.

Earlier this year, the business secured £700,000 of investment from the Welsh Labour Government to further develop its platform and expand its workforce. Academii is a powerful example of what a talented team of entrepreneurs and technicians can achieve when united behind a cutting-edge idea. I firmly believe that this spirit can be fostered in our universities, which can become the powerhouse of technological change across south Wales.

Clusters in university campuses can form the basis of spin-out companies, which, under the umbrella of a higher educational institution, take groundbreaking research and transform it into a market-ready product or service. Spin-outs are widely recognised for their highly effective, lucrative and sustainable business models. Their success is driven by their dynamic and entrepreneurial culture, which involves faster decision making, greater flexibility and a higher appetite for risk taking.

[Mark Sewards (Leeds South West and Morley) (Lab)]

I recently visited the Nexus innovation hub at the University of Leeds, which does the things that my hon. Friend was just describing, with innovative spin-outs and companies genuinely innovating in really challenging areas. However, they struggle to access Government procurement because they do not have things like Cyber Essentials, but they do have the equivalent accreditation from international organisations. Does he agree that the Government should do more to recognise these accreditations, so that we do not stifle innovation?

[Chris Evans]

I am always happy to take interventions, but my hon. Friend seems to have written my speech for me, because I will develop that argument as I go along. I note he is from Leeds—Leeds pinch all of Sheffield Wednesday’s best managers, do they not, Mr Betts?

Spin-outs offer postgraduate students the sought-after opportunity to work in a start-up, allowing them to develop skills and experience outside of academia. At a time when many graduates are struggling to navigate the job market, spin-out companies can be a fantastic place to start their career. Places like Wales, Northern Ireland and the north-east have traditionally been reliant on public sector work and have a lack of entrepreneurship, but spin-out companies can remedy those problems. Young people can found these companies, and young people can work in them. Their success boosts employment, the economy and investment in higher education. In 2024 alone, spin-outs channelled a record £3.35 billion of investment into university research. Such investment not only benefits the economy but ensures that promising technologies are not abandoned due to lack of funding.

While much of this funding is awarded to spin-outs in the golden triangle of Oxford, Cambridge and London, Swansea University has bucked the trend. It has emerged as one of the UK’s leading academic institutions for generating spin-out companies, having established 58 spin-outs since 2011. Swansea’s recent successes include Ail Arian, a business that recovers silver from printed electronics, and Corryn Biotechnologies, which has designed wound dressing that mimics the natural healing process of the skin. Celtic Vascular Ltd is another Welsh spin-out that deserves recognition for its groundbreaking work. Its team of researchers has pioneered AI-driven software that detects coronary heart disease with 92% accuracy.

I am proud that Welsh universities are leading the way in generating spin-out companies and inspiring others outside the golden triangle to do the same. However, the Government must do more to support spin-out companies. The biggest challenge that academics face when spinning out is finding the financial support to bridge the initial gap from the lab to the market. The UK Government recognised that challenge in their 2024 autumn Budget, in which £40 million was allocated to early-stage spin-out companies. Although that funding is welcome, it falls short of what is needed. For context, £40 million is approximately the cost of bringing just two drug-discovery programmes from inception to their first in-human clinical trials. Yet for a share of the Government’s first £9 million tranche in 2025, UK Research and Innovation was overwhelmed with more than 2,750 expressions of interest. There is a huge gap in funding at the point when researchers want to bring their discoveries out of the lab.

UK-based investors largely avoid scale-up investments, unwilling to take risks on products that have not yet been prototyped or introduced to the market. The grants awarded by Innovate UK are simply unreliable. They reached a peak of £150 million in 2023, but the funding for spin-outs fell by 44.5% in 2024 to £83.3 million. That reflects a shift in the Government’s wider investment strategy: the allocation of research and innovation grants is becoming more targeted and selective. Early-stage spin-out companies have directly lost out to this new strategy. In January 2026, Innovate UK paused its smart grants programme, which was designed to bring original, high-impact innovations to the marketplace. In its place, a new growth catalyst programme has opened, targeted at spin-outs that are ready to scale. Grants for the scheme must be aligned with private investment, which means that eligible companies are expected to be market-ready.

It has been said that a “valley of death” has subsequently emerged between the lab and the market, which many potentially game-changing innovations fail to span. To avoid that, as my hon. Friend the Member for Leeds South West and Morley (Mark Sewards) said, they are forced to rely on the US for capital. In return, the facilities and workforce are based across the Atlantic.

Ministers have a duty to turn the tide on this issue. With better UK-based support, this country’s technology, healthcare and life sciences sectors, let alone the economy, would be emboldened and much richer. I therefore ask the Minister whether the Government will provide more financial support for projects in pre-investment phases of development, beyond the £40 million set aside in the 2024 autumn Budget. Will they allow the British Business Bank to play a key role in providing that support, given its recent expansion and its position at the heart of the Government’s growth agenda?

I do not need to tell the Minister, who is a fellow Welsh MP, that Wales is home to a wealth of talent, innovation and entrepreneurial spirit. I want to see this nation thrive, but that will happen only if the Government provide the support and investment needed to unlock its full potential. I call on them to do just that, before other states around the world do it for us.