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About the writer: Steve Race has been the serving Member of Parliament for Exeter since 2024. He is a member of the Labour Party, and has kindly offered us his thoughts on the brimming opportunities for growth and innovation in the South West. The Committee would like to thank him for his contribution, and all further text has been written by Mr. Race.
The South West’s Innovation Moment: Why the Future Is Being Built Right Here
When people picture Exeter and the South West, they tend to think of cream teas, coastal holidays, and rolling green fields. And fair enough — we’ve got all of that in abundance. But if you stop there, you’ll miss the real story. Because today, the South West of England is quietly becoming one of the UK’s most exciting regions for technology, innovation, and investment.
As the MP for Exeter, I see this first-hand every day. Exeter itself is a powerhouse of research and innovation — home to our top-tier university, the world-renowned Met Office, and a growing ecosystem of science and tech businesses that are already shaping the future. But it’s not just about one city. From Cornwall to Bristol, from Plymouth to Yeovil, this region is buzzing with possibility.
And here’s the truth: we’re only just getting started.
What Makes a Region Investable?
Last week I spoke at the UK Real Estate and Infrastructure Investment Forum, sharing the stage with business leaders and investors to discuss what makes a successful regional innovation cluster. In my view, it comes down to five interlinked factors. First, you need strong institutions that attract and retain talent — our universities, research centres and hospitals provide exactly that. Second, a track record of success helps build investor confidence, and we’ve steadily built one. Third, you need a full articulation of what makes the region great — the compelling “vibe” or narrative that draws people in. Add to that supportive and committed local stakeholders, and finally, strong connectivity: between cities, institutions, people, and ideas.
The South West has all of these in abundance — and for students and staff in our universities, that presents a powerful opportunity to help shape what comes next.
A Region Rich in Innovation
The range and quality of innovation across our region is remarkable. In Exeter, we are building major strengths in areas like climate science, life sciences, photonics, and artificial intelligence. The University of Exeter works in close collaboration with the Met Office and our leading teaching hospital, and the innovation happening at Exeter Science Park is globally significant. We’re actively pursuing an AI Growth Zone designation for our city — with a bid backed by local government, academia, and business.
Elsewhere in the region, there are exciting things happening across sectors. In Plymouth, we have the largest naval base in Western Europe and a growing hub for nuclear engineering and skills. In Cornwall, critical minerals mining is supporting the tech of the future, while one of the UK’s spaceports and a national drone hub are helping drive our leadership in aerospace and satellite technology. The marine science cluster in Falmouth has global recognition, and North Devon is emerging as a key player in both defence and renewable energy, especially floating offshore wind.
Somerset is home to some of the most ambitious infrastructure projects in Europe — from the Hinkley C nuclear project, with tens of thousands of people working on site, to the future gigafactory being developed at the Gravity Smart Campus. The aerospace sector in Yeovil, led by Leonardo Helicopters, remains a cornerstone of advanced engineering.
And then we have our other city powerhouses. Bristol’s leadership in robotics, quantum tech, and advanced materials is firmly on the global map. Bath excels in sustainable engineering and digital innovation. Across the South West, we are combining research excellence with industrial muscle — and that makes this region incredibly fertile ground for high-growth innovation.
From Start-ups to Scale-ups
The South West is now home to more than 1,000 active start-ups, and collectively these businesses have raised £6.6 billion in investment. Crucially, they’re not just growing in number — they’re growing in value, with the average venture-backed startup in our region now worth £11 million. And this isn’t just about Bristol or Bath. In Exeter alone, we’re seeing exciting ventures take root and thrive.
Companies like New Motion Labs are rethinking mechanical systems with next-generation gears and chains; Intelligent AI is transforming the insurance sector through cutting-edge data analysis; Brain in Hand is supporting neurodiverse individuals through smart, app-based interventions that link users with carers and services; and RoleMapper, a female-founded business, is leading the way in job data compliance and organisational development. Each of these companies has raised millions in early-stage investment — and they’re just the start.
What’s particularly exciting is that nearly half of our startups are still at seed stage. That means they’re brimming with ideas and ambition, but still need the right support to scale. For students and graduates in the region, that represents an enormous opportunity to join — or even start — businesses that will shape the future of tech, science, and innovation in the UK.
The Investment Revolution
While our innovation ecosystem is thriving, there’s still a significant disparity in where capital flows. The South West currently attracts just 2.7% of the UK’s private equity and venture capital — a figure that doesn’t reflect the quality or potential of the companies here.
But that’s beginning to change. We’re seeing a quiet revolution in the way investment works across the region. A growing number of angel investors and networks are stepping in to support early-stage ventures. Councils and universities are bridging funding gaps. The new £100 million South West Fund — seeded by Devon and Avon pension funds and managed by Foresight — is a major moment for long-term, regionally-rooted investment.
There’s also growing momentum around organisations like QantX, which is supporting spin-outs from the SETSquared university partnership. The idea is to replicate the success of Northern Gritstone in the North — identifying talent locally and helping companies grow here in the South West, rather than chasing capital in London.
Deep tech is especially promising. Startups working in AI, biotechnology, and advanced materials now account for 44% of the total equity value of South West tech businesses — some £284 million out of £641 million. That’s an extraordinary concentration of cutting-edge capability.
Backed by Government — and You
The Labour government is investing in this growth, and we’re backing it with serious reform. We’ve committed £20 billion to research and innovation, and I accompanied Lord Patrick Vallance recently as he helped to launch our new national metamaterials hub, with £10m of funding from UKRI. We’re creating a new Skills England body to close the skills gap, investing in technical education, and reforming the apprenticeship system to better match today’s economy. Our National Wealth Fund will help unlock further capital, and planning reform will make it easier to build what’s needed. We’ve even launched a new Regulatory Innovation Office, so outdated rules don’t hold back new ideas.
This is a government that wants to partner with students, universities, local authorities, and businesses to make this region thrive.
But government alone can’t do it all. We need researchers, entrepreneurs, investors, and future leaders — people like you — to drive this forward. Whether you’re designing quantum processors, building green energy systems, or starting the next social impact venture, there’s a place for you in the South West’s innovation story.
A Region on the Rise
So let’s lay it out clearly. We have the institutions that attract and develop world-class talent. We have a growing track record of successful innovation. We’re learning to shout more loudly and proudly about our achievements. Our networks are deepening, our ecosystem is growing, and our quality of life — well, that’s still as unbeatable as ever.
The future is being built in the South West. Now’s the time to be part of it.
Image: St Martin’s Church and Mol’s Coffee House near the Exeter Cathedral, Tomislav Medak, 2008//CC BY 2.0
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