The UK’s £29.5 billion investment boom: impact for SMEs

Here’s how a £29.5 billion injection into UK sectors like tech, renewables, and housing is reshaping industries and opening doors for small businesses to thrive.

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More good news for UK businesses after last week’s Autumn Statement confirmed a business rate freeze. Prime Minister Rishi Sunak has just announced a £29.5 billion in fresh investments will soon be pouring into tech, life sciences, renewables, housing, and infrastructure industries. 

According to statements from Downing Street, a group of prominent “A-list CEOs and investors” have committed the substantial sum towards new UK projects and capital in total. 

The announcement was made at The Global Investment Summit yesterday morning and is intended to create more than 12,000 thousand new jobs across the country, with a specific focus on technology, life sciences, renewable energy and housing. 

The Global Investment Summit typically serves as a platform where global leaders, investors, and CEOs converge to explore and foster investment opportunities in various sectors within a specific country or region. It's an event aimed at showcasing investment potential, encouraging collaborations, and facilitating discussions around economic growth and development.

Key investment pledges so far include: 

Renewable energy infrastructure

  • Iberdrola have confirmed £7 billion of investment as part of a total £12 billion programme for 2024-28, with North Star, also committing £500 million and 400 new jobs to offshore wind infrastructure.
  • Gren, another key player, plans to invest £1 billion in district heating and local energy systems, catering to over 200,000 homes and numerous businesses. The substantial projects follow a significant surge in inward investment from £19 billion in 2021 to an impressive £55 billion in 2022, contributing to the creation of 11,500 jobs within the industry in the past year alone.

 Infrastructure & Innovation

  • IFM Investors will be committing £10 billion for large-scale infrastructure and energy transition projects, while Aware Super is investing £5 billion across energy transition, affordable housing, life sciences, innovation, and technology.
  • Aware Super‘s £5 billion commitment spans energy transition, affordable housing, life sciences, innovation, and technology.

Tech Advancement

  • After the triumph of the inaugural AI safety summit by the UK Government, Microsoft is injecting £2.5 billion into erecting essential AI infrastructure. This significant investment will introduce additional next-gen AI data centres and thousands of graphic processing units, amplifying the UK's stature as an AI superpower. Last year alone, the country's AI sector reaped revenue exceeding £10 billion from thriving AI enterprises.
  • Oxford Quantum Circuits will be raising £85 million for pioneering enterprise-ready quantum computing projects.

Healthcare & Tech

  • BioNTech's 10-year investment of approximately £1 billion aims to expand R&D activities in healthcare and AI expertise in the UK.
  • Yondr's £1 billion investment turbocharges the UK's tech and data capabilities, particularly with a new 30MW datacentre in Slough.

Green Initiatives & Affordable Housing

  • Aira's £300 million investment facilitates heat pump rollouts and upskilling efforts, aiming to create 8,000 green jobs and transition one million UK customers from gas boilers.
  • PATRIZIA‘s £100 million announcement focuses on highly sustainable affordable housing, starting with a commitment to fund the development of 70 affordable homes in Milton Keynes.

Alongside this initiative, Innovate UK is initiating a £110 million Investor Partnership aimed at supporting science and technology SMEs in the UK.

To further propel innovation and investment, the Government is also introducing three fresh regulatory sandboxes. These unique platforms serve as controlled environments where the latest technologies—like hydrogen-powered aviation, autonomous marine vessels, and drones—can be tested and developed. 

The Department for Business & Trade has assembled an expert panel tasked with exploring potential avenues for implementing a UK corporate re-domiciliation regime, which would simplify the process for foreign companies looking to relocate to the UK. 

This strategic move not only positions the UK as an attractive destination for international businesses but also opens up opportunities for SMEs in the science and technology sectors to collaborate, access funding, and drive further growth and innovation.

Potential impact for SMEs

This increased investment presents several opportunities for small business owners:

  • Supply chain opportunities: as substantial projects and investments generate jobs, small businesses can tap into supply chain openings, offeringessential goods and services required for these major projects.
  • Collaboration opportunities: Large-scale projects often require joint ventures. Small businesses can seize opportunities to work alongside larger enterprises, bringing their unique expertise and agility to the table.
  • Boosted consumer spending: with more people employed, there is a potential boost in consumer spending. Small businesses, especially those in local communities, can benefit from increased demand for goods and services.
  • Diversification of services: job creation in various sectors, such as technology, renewables, and infrastructure, will allow small businesses to diversify their offerings. They can adapt and provide services or products that align with the demands of these growing industries.
  • Skill development and increased talent pool: the creation of jobs contributes to the development of a skilled workforce. Small businesses can tap into this talent pool for recruitment, potentially accessing individuals with specialised skills gained from working on significant projects.
  • Community development: job creation contributes to community development, fostering a positive environment for small businesses. As local economies thrive, small businesses may benefit from increased foot traffic and community support.

Conclusion

Following the Autumn Statement’s tax cuts and full expensing commitment, The Global Investment Summit is another feature of the government’s push for economic growth. 

However, the size of the investment pot aims also to solidify the UK’s status as one of the prime spots worldwide to invest and do business.

Written by:
Stephanie Lennox is the resident funding & finance expert at Startups: A successful startup founder in her own right, 2x bestselling author and business strategist, she covers everything from business grants and loans to venture capital and angel investing. With over 14 years of hands-on experience in the startup industry, Stephanie is passionate about how business owners can not only survive but thrive in the face of turbulent financial times and economic crises. With a background in media, publishing, finance and sales psychology, and an education at Oxford University, Stephanie has been featured on all things 'entrepreneur' in such prominent media outlets as The Bookseller, The Guardian, TimeOut, The Southbank Centre and ITV News, as well as several other national publications.

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