The IPL newsletter: Volume 26, Issue 537

Unleashing SME Potential to Scale Up: Helping SMEs Scale Up

OECD
SMEs and start-ups that grow rapidly contribute significantly to job creation, economic growth and competitiveness. Indeed, scalars, i.e., SMEs that grow by one-third over a three-year period, contribute about as much to job creation as large firms. However, there are barriers to SMEs scaling up and opportunities to better leverage their potential. This report examines and identifies the characteristics of scalers and, in turn, the policies that can support them. The report draws on firm-level data for 17 OECD and accession candidate countries for the period 2014-20 and includes a mapping of more than 2 500 SME and entrepreneurship policies of 520 institutions across OECD countries. The central message of this report is that all types of SMEs, no matter their size, economic activity, age or location, can scale up, but that the likelihood is higher for some types of SMEs than others. An effective policy mix needs to cater to both realities. This means setting favourable framework conditions and broad-based support for all types of SMEs to grow, as well as targeted interventions to support those SMEs with high growth potential. Also see this interactive data tool related to the report.
 

World Intellectual Property Indicators 2025

World Intellectual Property Organization
World Intellectual Property Indicators is an annual survey of intellectual property (IP) activity around the world undertaken by WIPO, the United Nations specialized agency for innovation and IP. This authoritative report analyzes IP activity around the globe. Drawing on 2024 filing, registration and renewals statistics from national and regional IP offices and WIPO, World Intellectual Property Indicators provides up-to-date information on patents, utility models, trademarks, industrial designs, microorganisms, plant variety protection and geographical indications.

World Intangible Investment Highlights 2025

World Intellectual Property Organization
World Intangible Investment Highlights, together with underlying data from the Global INTAN-Invest Database, offers novel, up-to-date cross-country, quarterly and annual measures of investment into intangible assets, including those not included in official statistics. The statistics cover a range of high-income and emerging economies.

Bleeding to Death: The Science and Technology Growth Emergency

UK Science and Technology Committee
This report urges the UK government to stem the exodus of science and technology companies. Also see this summary from Science Insider, which includes reaction from University of Manchester innovation policy scholar Kieron Flanagan.

The report puts forward a range of recommendations to fix the long-standing failure to scale. These are summarized as follows:

• Leadership from the Prime Minister and Chancellor, through a newly empowered “National Council for Science, Technology and Growth”, is urgently needed. It should be modelled on the National Security Council. It should include the PM, Chancellor, Minister of State for Science, and Principal-level representation from DSIT, DBT, the Home Office, MoD, DHSC, DESNZ, DWP, and Department for Education, as well as key public investment bodies and scientific advisers. It should meet frequently to prioritise science and technology for growth, break down barriers to progress, and break the UK out of its doom loop. It should be able to meet responsively to make decisions and call in ad-hoc attendees as needed. The Council would provide strategic coherence and effective delivery, which is evidently lacking from existing structures. (See Chapters 2 and 6 for further discussion.)

• Institutional investors: We welcome the Mansion House Reforms, but the Government must press on with implementation, and go much further. The shocking 90% decline in the proportion of domestic pension fund investment in UK equities is a significant factor behind our economic malaise, but as its origins are largely political, it can be reversed politically. We do not believe that the average contributor to a UK pension fund would think it right that most of their contributions should go to boost overseas economies, starving their own country of investment. The Government should ask pension funds to survey their active contributors on this matter, and respond accordingly. The Government should reserve powers including mandation and withholding tax relief from funds that fail to meet their Mansion House targets. With the Pension Schemes Bill currently in the Commons, the government has a ready opportunity to make the legislative changes needed.

The shrinkage in domestic investment has led also to a shrinkage in the capacity of fund managers to assess early stage and higher risk investments. The Government should explore possibilities short of mandation to incentivise pension funds to invest in science and technology companies. Consolidation of DC pension funds, including the large number of Local Government pension funds, should be pursued vigorously, and investment in UK-based technology companies should be tracked to ensure the reforms are benefiting the sector. (See Chapter 3.)

• Public investment bodies: Innovate UK, the British Business Bank (BBB), and the National Wealth Fund (NWF) all have critical roles to play in what should be a coherent system, but they need to work much more closely together. There is a strong argument for consolidating them into one body, and scaling them up to provide a competitor to the sovereign wealth funds available overseas. Innovate UK, under new leadership, must streamline, simplify, and accelerate its grants. An Innovate grant should be a mark of technological due diligence leading to a pipeline of public and private investment, or it risks being seen as a bureaucratic bridge to nowhere. The BBB has several good schemes to encourage institutional investment into science and technology companies, but these should be expanded. The NWF is new to investing in technology companies and now has a broad remit. A specific target is needed to provide late-stage financing to a small number of promising technology companies, with a view to keeping them in the UK. The public investment bodies should make more extensive and effective use of their ability to take on, share, and reduce risk, including through guarantees. (See Chapter 4.)

• Public procurement: Public procurement is a crucial lever that can unlock growth of innovative science and technology companies in the UK. The Government must build capacity if procurement is to be an innovation engine, supporting UK-based supply chains: outcome-based, swift, flexible, rather than bureaucratic and risk averse processes that favour large incumbents. It should set a target for each procuring body to spend a mandatory percentage of their budgets with innovative UK-based SMEs to build capacity, as the US has done with SBIR (Small Business Innovation Research). Ministers need to back officials who procure innovative, domestic solutions, celebrating successes and accepting failures. The Government needs to adopt a risk-on, long-term mindset, changing the institutional incentives that hold back innovation. For critical frontier technologies, the Government should consider Vaccine Taskforce-style procurement to stimulate their development in the UK. (See Chapter 4.)

• People, networks, and skills: Career structures, pay and incentives must change to allow easier movement between academia, business, and government, so that each of those sectors acquires ready access to the skills and networks of the others. It should encourage universities to make such moves attractive. The Government must encourage the formation of the dense networks between financiers, entrepreneurs, scientists and officials that work so well in Silicon Valley. It should help entrepreneurs navigate the complex landscape and unblock slow decision-making processes by introducing concierge services that can identify high potential science and technology companies and refer them to relevant decision-makers. There is an increasing need for skills training across the Industrial Strategy priority areas; equally, the Government must urgently reform its counter-productive visa policies for global talent and seize the opportunity to attract scientists and technologists from overseas. When talented scientists and entrepreneurs want to move here, the UK should be rolling out the red carpet, rather than red tape. (See Chapter 5.)

• Research foundations: The UK has immense scientific and technological potential, but it cannot take its research base for granted. The UK has long vested its hopes in its excellent research base in universities and companies that spin out from them. But this is now under threat due to the unresolved higher education funding crisis, which the Government must resolve before it is too late. Yet, instead of tackling the problem, the Government is proposing counter-productive actions like a levy on international students. (See Chapter 5).

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This newsletter is prepared by Travis Southin.
Project manager is David A. Wolfe