The East of England has established itself as one of the UK’s leading innovation economies, with innovative businesses in the region attracting more follow-on investment than any English region outside London, according to new research from NatWest.
Analysis published in NatWest’s From Innovation to Impact report found that 29.8% of innovation-backed businesses in the East of England have secured follow-on equity investment, making it the strongest-performing English region outside the capital.
Only London recorded a higher proportion, at 33.7%, while the East of England outperformed the UK average of 26.4% and significantly exceeded rates recorded in both the East Midlands (19.5%) and West Midlands (15.4%).
The findings reinforce the East of England’s position as one of the country’s most significant innovation economies.
Home to 2,446 innovative businesses and 1,212 recipients of public innovation grants, the region is the largest innovation economy across the East Midlands, West Midlands and East of England and is internationally recognised for strengths in science, technology, life sciences and research-led enterprise.
NatWest’s report suggests that strong links between businesses, investors, universities and research institutions have helped create an environment where innovative firms can access the capital needed to grow and commercialise new technologies.
The region’s performance is reflected not only in investment activity but also in broader commercial outcomes. Among grant-backed businesses, 10.5% have achieved an exit, while 6.4% have demonstrated recognised scale-up growth, both broadly in line with national averages.
While the East of England performs strongly on investment attraction, the report suggests there remains significant headroom for future growth.
Analysis found that 36.8% of grant-backed businesses remain active but have not yet secured follow-on investment, achieved an exit or demonstrated recognised scale-up growth.
Although below the UK average of 38.1%, NatWest says this group of businesses represents an opportunity to generate further growth, investment and skilled employment across the region.
The report describes these firms as part of the UK’s “untapped innovation cohort” – businesses that continue to innovate and trade but have not yet achieved a tracked commercialisation outcome.
Across the East Midlands, West Midlands and East of England, grant-backed businesses have attracted £16.2 billion in follow-on equity investment, while the three regions are home to 592 academic spinouts, highlighting the importance of university-led innovation in supporting business growth.
The report argues that successful commercialisation depends on more than research and development alone. Businesses consistently identified access to finance, expertise, networks and routes to market as critical factors in helping them scale. Through its Accelerator network, Venture Banking proposition and specialist support for innovation-led businesses, NatWest works with founders and growth companies across the UK to help connect them with the capital, insights and commercial opportunities needed to turn innovation into sustainable growth.
Dipesh Mistry, Chair of the NatWest Midlands and East of England Regional Board said: “One of the most interesting findings in the report is that the East of England combines some of the UK’s strongest investment outcomes with a substantial pipeline of innovative businesses that have yet to reach commercial scale.
“That tells us two things. First, the region has built a highly effective innovation ecosystem. Second, there is still an opportunity to help more businesses access the finance, expertise and commercial networks needed to grow.
“The challenge for many innovative firms isn’t developing the technology. It’s making the transition from innovation to commercial success. Helping more businesses make that journey could unlock further growth, investment and skilled jobs across the region.”
