Venture capital investment’s vital role in the regions

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​Regional funders will play a key role in rebalancing the UK economy away from London and strengthening regional city economies, according to a new report.

The independent study, undertaken by Big Issue Invest on behalf of Enterprise Ventures, identified a number of ways to create a more balanced economy.

These included investing in SMEs in the regions, concentrating on deprived areas and focusing on priority sectors, such as manufacturing and export.

Jonathan Diggines, chief executive of Enterprise Ventures, said: “We have invested £344m in nearly 850 SMEs since 2002 and wanted to understand the wider social value that our investments have created.

“We strongly believe that this report gives some indication of the fundamental part that venture capital investment must play in rebalancing the UK’s regional economies.

“With devolution firmly on the agenda, now is the time for Northern cities to re-establish themselves as economic powerhouses, and the investment community has a critical role to play in helping them to achieve that.”

The results showed that the majority of Enterprise Ventures’ 400-plus loans and investments have gone into the most deprived regions in the UK.

The venture capitalist said its most important role will be to help build a regional platform for SME investment outside the South East.

The report said that finance providers should recreate the role that private investors played in building the industrial communities of the North.

Tim Hames, director general of the BVCA said: “There will be very, very few businesses of any kind which score as strongly in the social realm as Enterprise Ventures has done in this inquiry.

“It is to be hoped that the content of its crusade as well as the character of this survey will be replicated by others.”