These are the key findings of the latest Market Spotlight report on the UK’s science and technology economy by Bruntwood SciTech, a joint venture between Bruntwood and Legal & General
Plans to exclude performance fees from workplace pension caps and recently launched changes to pension investment rules would unlock millions of pounds in additional investment, new jobs, and economic growth for the North West.
The findings, from the Market Spotlight report by Bruntwood SciTech, explored what the potential impact the relaxing of fee limits, which is currently being considered by the government, would be on pension fund investment into private equity and venture capital and, in turn, the science and tech sector.
In measuring the regional impact on employment GVA, from growth and expansion of the science and technology sector associated with additional PE and VC investment – Bruntwood SciTech say that investment across the North West will account for over £637m of a total £5.26 billion expected for the UK per annum by 2030.
Last year, the North of England accounted for 430,000 jobs in the science and technology sector – compared to 597,000 roles in London. Of the 8,900 additional jobs the Spotlight report says could be created over the next three years in the UK, 1,200 of them would be in the North West of England – which compares to 1,700 generated for London. By 2030, 15% of all new science and technology jobs created would be in the North West compared to 17% in the capital.
Bruntwood SciTech says that industries where R&D and patent approval is more capital-intensive or lengthy in bringing products and services to market, such as life sciences and biotechnology, are likely to receive the greatest benefit from the removal of pension investment constraints.
The report predicts that the impact of the reforms would accelerate between 2025 and 2030 as now emerging sectors, like autonomous and electric vehicles and battery storage, naturally attract greater levels of investment.
Commenting on the findings, Chris Oglesby, executive chair at Bruntwood SciTech, said: “Our study provides powerful evidence in support of further pension investment reform as a means of rapidly accelerating domestic private equity and venture capital activity in the science and technology industries. This will unlock significant innovation, economic growth, and thousands of new jobs.
“Today, around 80% of investment into UK tech and life sciences comes from overseas, largely institutional sources and especially from North America and Asia. Inevitably, much of this capital is drawn to London. While global money is increasingly finding a home in the regions, boosting domestic investment is the fastest possible route to Levelling Up our knowledge economy.
“A private investment boom dovetails with the Government’s own efforts to address regional imbalances, such as spreading its own R&D spending more widely around the UK based on different local strengths, and the £100m Innovation Accelerators in Greater Manchester, Glasgow, and the West Midlands.
“With additional investment into the digital, transport and skills infrastructure of our places, especially regional cities, we can increase their capacity to absorb this new wave of private capital and cascade its benefits to their surrounding towns and neighbours.”
The research was conducted by Development Economics on behalf of Bruntwood SciTech – a joint venture between Legal & General and regional property company, Bruntwood.
