From Discovery to Scale: Why UK Life Sciences Industrial Strategy Needs a Whole-System Funding Map
The Government's Life Sciences Sector Plan is ambitious in the right ways. It links the sector to the wider growth mission, recognises the importance of start-up and scale-up conditions, and sets out a ten-year vision in which the UK strengthens research activity, improves clinical research performance, attracts investment and builds more companies of scale.
That is a welcome direction of travel.
In From Hosting Innovation to Owning It: Why UK Life Sciences Policy Must Shift Focus from Multinationals to Scaling Domestic Biotech, we set out the argument that the UK will not secure the full economic value of its science unless more attention is paid to the conditions that allow domestic companies to grow, stay and scale here in the UK. Our arguments were not novel, but we suggested a number of concrete actions that could be taken without deploying more capital.
This paper starts from that position rather than restating it. Our purpose here is to ask a narrower but perhaps more fundamental question: what does an industrial strategy require in order to succeed, and what's missing from our current approach that could hold us back from achieving the ambitions in the Life Sciences Sector Plan?
A clear view?
A successful industrial strategy is not just a statement of ambition. It needs clear goals, measurable outcomes, public reporting, identifiable accountability and the willingness to make trade-offs when evidence shows that part of the pipeline is not working.
The current Life Sciences Sector Plan explicitly reflects some of those principles. It states that every commitment has a named senior responsible owner, that progress will be reported through an annual implementation update, and that delivery will be measured against headline targets covering commercial R&D, scale-up capital, patient access and foreign direct investment.
But a successful industrial strategy, particularly one in a constrained funding environment where choices have to be made, also needs a clear understanding of the existing funding paradigm.
That's especially important in life sciences.
Life sciences is an interconnected ecosystem running from early academia to late stage companies and everything in between. That whole ecosystem must function in order to take innovation from concept to patients. There must be sufficient liquidity at all stages to feed the whole pipeline.
And the funding ecosystem is just as complex, with multiple Government agencies, one of the most active charity sectors in the world and disparate sources of private capital, from very small to very large, many of those not UK based.
If our focus is ensuring we build companies and retain value in the UK, delivery depends on whether research funding, translational support, clinical trials, regulation, data access, NHS adoption and growth capital work together well enough to move companies from discovery to commercial scale.
The problem is that strategy can still fail even when the formal architecture looks sensible. If policymakers cannot see where funding is concentrated, where it overlaps, and where the real bottlenecks sit, then those policymakers cannot intervene to re-deploy capital effectively. Or at least, not with a clear understanding of what that redeployment will do to other parts of the system.
A siloed evidence base
A great deal of useful analysis already exists on UK life sciences and health research funding. The problem is not a total absence of evidence; it is that most of the analysis looks at only one part of the system at a time.
For example, the UK Clinical Research Collaboration's Health Research Analysis 2022 is useful because it brings together a detailed picture of public and charitable health research spending, covering 173 organisations and more than 23,500 projects. But it is also both limited in scope and dated for present strategic purposes: it is a health research map based on 2022 data, not a current whole-system picture of life sciences investment across company finance, translational infrastructure, private capital, manufacturing support and scale-up funding.
A different example is Tony Hickson's review for UKRI on university-investor relationships. That work is highly relevant to industrial strategy because it identifies gaps in pre-seed and scale-up funding, calls for a more contiguous pathway linking council awards, Innovate UK and the British Business Bank, and argues for mapping gaps in seed, venture and scale-up finance across regions and priority sectors. But again it's focused on the spin-out pipeline, not the life sciences funding system as a whole.
The British Business Bank's evaluation of the Life Sciences Investment Programme shows a persistent funding gap for growth-stage Series B and beyond life sciences companies and in analysing whether a specific intervention is helping to build later-stage specialist capital. But again it is, by design, an evaluation of one programme aimed at one part of the market, not an overarching account of how public, charity and private capital interact across the whole system.
In a system without new money, Hickson and the British Business Bank can point out the gaps in the system, but can't help us make choices on where we re-deploy from to fill them.
Taken together, these examples illustrate the real problem. There are good analyses of public and charitable health research funding, of university spin-outs, and of later-stage venture growth finance, but there is still no integrated picture that shows whole-system spend across the full life sciences landscape in a form usable for industrial strategy.
Why this gap matters
This matters because industrial strategy depends on allocation, not just aspiration. If Government wants to create the conditions in which UK-headquartered companies can start, grow, scale and remain in Britain, it needs to know far more clearly where money is already flowing and where the system is thin.
Without that visibility, it is difficult to know whether the UK is over-performing in discovery but under-supporting company growth, whether charity funding is reinforcing academic excellence without enough connection to commercial translation, or whether promising therapeutic companies are spending too much time searching for the right investors because relevant networks remain opaque and fragmented.
This is also why aggregate totals can be misleading. The existence of substantial public commitments, major charity expenditure and periods of strong venture activity does not tell policymakers whether those different sources add up to a coherent national growth strategy.
Charities and strategic alignment
That point applies particularly strongly to charities. The UK medical research charity sector is a major source of funding and should remain free to choose where it deploys its capital according to its own charitable objects, governance and priorities.
But recognising that freedom does not mean leaving charitable funding entirely outside strategic consideration. If Government had a clearer view of where funding is concentrated, where translational gaps persist and where commercial scale-up is consistently under-supported, it could invite charities into a better informed discussion about how their choices interact with wider public and private investment flows.
That would not mean directing charities or asking them to abandon mission-led funding. It would mean making voluntary alignment easier: helping charities see where they may already be reinforcing strengths, where they may be duplicating existing support, and where partnership, co-funding or modest shifts in emphasis could strengthen the path from scientific excellence to downstream health and economic value in the UK.
A whole-system map would therefore be useful not only for Government, who could more comfortably considering reducing support to areas already well funded by the charity sector. And it would also help charities, if they wished, to make better informed choices in a wider strategic context while preserving their independence.
Private capital and incentives
A similar logic applies to private capital. Investors are free to choose where they invest, and Government should not pretend otherwise.
Yet in practice private capital often flows most readily towards projects that are already relatively de-risked. That is rational from the perspective of fund managers and their mandates, but it can leave strategically important parts of the pipeline persistently underfunded, especially where timelines are long, technical risk is high, specialist expertise is limited or commercial inflection points are still some way off.
If policymakers could see more clearly where those patterns recur, they would be in a stronger position to decide whether some forms of investment deserve different treatment. In other words, if certain stages, modalities or company types are known to be riskier but strategically important, there is a case for asking whether stronger incentives should be used to move more capital towards them.
That need not mean trying to override market choice. It could mean using more selective tools such as co-investment, risk-sharing mechanisms, targeted tax reliefs or other incentives designed to improve the risk-reward balance in under-served parts of the system.
The important point is that such incentives should be guided by evidence rather than by broad assumptions about where capital ought to go. A whole-system funding map would not remove investment risk, but it would make it easier to identify where risk is deterring capital from parts of the life sciences pathway that matter most for long-term UK growth.
What should change
The immediate need is not another broad statement of ambition. It is a coordinated national effort to build a whole-system map of life sciences funding in the UK, bringing together Government, UKRI and its relevant councils including MRC, BBSRC and Innovate UK, the BioIndustry Association, the Association of Medical Research Charities, investors and other relevant actors.
That exercise should identify where money is going by stage, modality, geography, therapeutic area and recipient type. It should also show where public and charity funding overlaps, where private capital is missing and where founders face avoidable friction in locating specialist investors willing to back therapeutic development at the relevant stage.
A practical output should be a national repository of UK life sciences funding resources, including a clearer map of private and angel networks, organised by their sectors of interest and willingness to invest in different types of companies and technologies. That would not solve the scale-up problem on its own, but it would give policymakers, founders and system leaders a far better understanding of the architecture they are trying to improve and allow all of those organisations to make better informed choices related to capital deployment.
Conclusions
The real test for the Life Sciences Sector Plan is not whether its actions are sensible; in many respects they are. But whether it will actually build companies and drive UK economic growth. This is, after all, an industrial strategy, not a science strategy.
That test starts with a basic question: can the UK move from a set of important but siloed analyses to a genuinely strategic understanding of who is funding what across the whole life sciences system? Without that understanding, industrial strategy will continue to operate with only partial visibility, and policymakers will both struggle to direct capital deliberately towards the points where UK science becomes UK economic value, and risk duplicative funding in already well resourced areas.
A successful strategy therefore has to be integrative. It must treat public funding, charity funding and private capital not as separate conversations but as interdependent parts of one system, and use that visibility to align them more intelligently. The choice is stark: either we build and use a whole-system funding map, or we accept that taxpayer money, charitable effort and private investment will continue to be channelled through well‑intentioned silos rather than a coherent national growth strategy.