Key Takeaways
- • Science Minister Lord Vallance urged UK pension schemes and venture capital firms to invest more in world-class UK science and technology companies, calling them "underexposed" to frontier sectors such as AI, biotechnology and quantum, in a speech at the British Venture Capital Association's private capital showcase on 2 October 2025.
- • The government cited $16 billion invested into UK start-ups and scale-ups last year and more than $8 billion raised in the first half of 2025, which it said exceeded France and Germany combined.
- • The government unveiled a new and improved Innovation Clusters Map to help investors identify regional hubs across sectors aligned with the Industrial Strategy, including advanced manufacturing, digital and tech, life sciences and financial services.
- • Arm, the Cambridge-founded chip designer, was cited as the flagship example of British innovation that scales globally, with the Minister arguing that pension-backed growth investment would retain more value and jobs in the UK.
Summary
Science Minister Lord Vallance will tell investors at the British Venture Capital Association's (BVCA) private capital showcase on Thursday 2 October that pension firms should capitalise on the opportunity to direct more private capital into UK science and technology. He said the UK has long excelled in research and in incubating companies at the frontier of fields including life sciences, AI and quantum technology, but that many promising firms have been constrained from scaling to their full potential by a shortage of available capital.
The government says $16 billion was invested into UK start-ups and scale-ups last year, and more than $8 billion was raised in the first half of 2025, a total it describes as exceeding France and Germany combined. Despite this, Lord Vallance argued that the UK's deep pools of institutional capital send only a small fraction to its most promising growth companies. He called on private pension investors to work with venture capital firms and other asset managers to back the next generation of high-growth companies, arguing this would generate long-term returns for investors while keeping more of the value and jobs created in the UK. Arm, the Cambridge-founded company, was cited as a flagship example.
To help investors target opportunities, the government unveiled an updated Innovation Clusters Map identifying areas where networks of businesses and research institutions benefit from close proximity. The tool covers sectors aligned with the Industrial Strategy, including advanced manufacturing, creative, digital and tech, financial services, professional and business services, and life sciences. Highlighted clusters include the north west of England, where life sciences companies are developing treatments for cancer and inflammation and vaccines against bacteria linked to pneumonia and sepsis, and the Glasgow city region, which is building satellites that underpin modern connectivity.
The initiative is framed within the government's Plan for Change and Industrial Strategy, which the Minister said combines public funding, streamlined regulation and industry partnerships to channel investment into science and technology. The map is intended to allow investors, industry, research institutions and government to understand local innovation ecosystems and identify regional growth opportunities.
The government says $16 billion was invested into UK start-ups and scale-ups last year, and more than $8 billion was raised in the first half of 2025, a total it describes as exceeding France and Germany combined. Despite this, Lord Vallance argued that the UK's deep pools of institutional capital send only a small fraction to its most promising growth companies. He called on private pension investors to work with venture capital firms and other asset managers to back the next generation of high-growth companies, arguing this would generate long-term returns for investors while keeping more of the value and jobs created in the UK. Arm, the Cambridge-founded company, was cited as a flagship example.
To help investors target opportunities, the government unveiled an updated Innovation Clusters Map identifying areas where networks of businesses and research institutions benefit from close proximity. The tool covers sectors aligned with the Industrial Strategy, including advanced manufacturing, creative, digital and tech, financial services, professional and business services, and life sciences. Highlighted clusters include the north west of England, where life sciences companies are developing treatments for cancer and inflammation and vaccines against bacteria linked to pneumonia and sepsis, and the Glasgow city region, which is building satellites that underpin modern connectivity.
The initiative is framed within the government's Plan for Change and Industrial Strategy, which the Minister said combines public funding, streamlined regulation and industry partnerships to channel investment into science and technology. The map is intended to allow investors, industry, research institutions and government to understand local innovation ecosystems and identify regional growth opportunities.
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