The CBI’s Scale and Retain project is a year-long initiative focused on how the UK can better support innovative firms to scale, while retaining high-value activity as businesses grow globally. As part of that work, the CBI is partnering with the Startup Coalition on a series of roundtables examining how stronger links between established businesses and scaling firms can support growth.
The first roundtable focused on innovation partnerships – including pilots, accelerators and co-development – to understand what makes these partnerships work for both sides, where they stall, and what could help more of them translate into commercial opportunities and wider adoption.
The UK has a world-class innovation ecosystem, but struggles to turn that innovation into commercial output and impact at scale. Partnerships between the UK’s most inventive startups and large more established companies are key to tackling this challenge. For corporates, partnering with or buying from startups can provide access to frontier capability, support innovation adoption and help de-risk in-house R&D. For startups and scale-ups, a corporate customer or partner can provide commercial validation, access to finance, expertise, infrastructure and global networks that help them scale. At a wider economic level, stronger partnerships can help the UK deploy new technologies faster while enabling more innovative firms to grow and stay here.
Here we outline some of the findings from the first discussion on this theme, how we can make the UK a better place for innovation partnerships, and how to ensure more of those partnerships translate to commercial opportunities and deployment of innovation at scale.
Start with a shared understanding of the problem
Successful partnerships start with agreement on the problem and what success looks like. For corporates, that means a clearly defined business need, an internal customer ready to adopt the solution, and senior sponsorship. Businesses highlighted the value of combining a technical or innovation champion with an executive sponsor who owns the underlying problem and outcome.
Smaller firms also need to be clear about where their technology can add value. Both sides should agree upfront on realistic outcomes, responsibilities and the route from pilot to implementation, with opportunities to reassess progress.
Case Study: GXO Logistics and ThriveMap
GXO Logistics runs a business-led accelerator model, using external scouting to identify innovative firms before putting selected technologies through trials supported by GXO mentors. ThriveMap participated in GXO’s accelerator and highlighted that clarity in defining both the business problem and what a pilot can realistically achieve has been key. Its successful 12-week demonstration had well defined success criteria and next steps agreed from the outset, helping both sides understand what would follow if the pilot worked.
For ThriveMap, that clarity matters commercially too. Startups take on significant risk when committing time and resource to trials, particularly where there is no guaranteed contract at the end. Clearly specified problems, outcomes and routes beyond the pilot can help manage that risk.
Manage risk without preventing innovation
Partnerships can stall when corporate procurement, onboarding, information-security and data-protection requirements designed for large suppliers are applied unchanged to a small firm or limited pilot.
This is not about removing essential safeguards. Instead, businesses should design requirements proportionate to the risk and scale of the engagement, with procurement teams, internal customers and suppliers working together to establish what is needed at each stage.
Responsibility sits on both sides. Corporates can design processes that recognise the characteristics of innovative suppliers, and startups can begin developing the commercial and security maturity required to work with large customers.
Participants of the roundtable also identified a wider cultural challenge: experimenting with a new supplier or new approach creates visible risk that is often not incentivised or encouraged in British business culture, while sticking with an incumbent often does not. Several contrasted this with the US and Canada, where they saw greater willingness to accept contractual flexibility and commercial risk in pursuit of potential returns.
Case Study: Airbus and Applied Atomics
Airbus’s six-month space-sector residency programme provides startups with access to facilities, expertise and networks. Government funding has helped make the model possible, de-risking innovation partnerships. Applied Atomics was the first business to take part. They noted the benefits of the partnership went beyond access to facilities, but also to relationships and expertise across Airbus and ultimately access to new markets, demonstrating the wider value an established corporate can offer an innovative firm.
The experience also reinforced the importance of clear demand. Applied Atomics contrasted the stronger signals provided to innovators by the US defence market with the UK, which support primes in pulling through innovation from innovative SMEs and scale-ups.
How the government can help create the market
Partnerships between large and scaling firms are an underutilised policy lever for scaling and deploying innovation in the UK, and there are several ways government could further stimulate and support these partnerships.
Using its purchasing power to create clear demand for innovation would give smaller firms an important first customer and reference case, which could help de-risk subsequent private-sector adoption. Clear demand signals can also give large innovative businesses confidence to invest, pulling through innovation from SMEs and scale-ups through innovation partnerships and supply chains.
Public innovation funding can similarly make partnerships possible in the first place, de-risking partnerships to unlock greater corporate investment, and giving innovations time to demonstrate commercial value. But businesses also highlighted the cost of lengthy, highly competitive funding applications with low success rates. Making innovation funding accessible matters as much as making it available.
The UK already has the ideas and businesses. The task now is to create the conditions that turn more of that innovation into customers, investment and growth here.
Through its Scale and Retain project, the CBI will continue working with scaling firms, established businesses, investors and government to build the evidence base, identify good practice and develop practical policy proposals that can strengthen these connections across the UK.
For more information and to get involved, please contact Nicola Eckersley-Waites, CBI Senior Policy Manager, Tech and Innovation Transformation.