South West Innovation Outlook 2026: growth opportunities and the path ahead

Article by  Tara Gillam, Manager of Innovate UK Business Growth operations

As Head of Innovation at Business West and Partner Manager of Innovate UK Business Growth in the South West, my focus for 2026 is clear: deliver the right support at the right time to help innovators turn ideas into commercial success, growth, and scale. With the new year underway, I’m sharing my perspective on the region’s position, the opportunities available now, and the practical steps to turn ambition into traction.

The economic outlook for 2026

Despite national headwinds, 2025 delivered a clear message: the South West is evolving, not retreating. Tech South West’s Q2 Investment Briefing reported a 143% quarter-on-quarter rise in investment to £368m and an 8% increase in deal volumes—even as UK wide investment fell. That surge reflected a handful of standout raises and, more importantly, growing confidence in strategically important sectors, from digital infrastructure to clean tech.

In October, The British Business Bank announced that its South West Investment Fund has driven almost £100m of investment into new and growing businesses since 2023. 203 businesses across the region have now received funding, with £100m more still to be allocated.

For Business West, as the delivery partner for Innovate UK Business Growth in the South West, we helped firms secure £25.19m in grants, £30.62m in equity, and supported over 388 jobs, maintained or created, in 2025. 2026 will be an opportunity to build on that momentum, helping our brightest innovators to go further, faster.

Opportunities at the forefront: early year routes into capital and support

The start of 2026 brings a number of exciting Innovate UK funding opportunities designed to turn outstanding innovations into commercially viable products and services:

• Innovate UK Growth Catalyst – Investor Partnerships (Round 2)
  Closes: Tue 3 Feb 2026, 11:00. Late‑stage R&D grant alongside aligned private investment; a minimum £100m allocated across projects; awards up to ~£900k per company. Apply via the Innovation Funding Service.
• Women in Innovation Awards 2025/26
  Closes: Thu 4 Feb 2026, 11:00. Up to £75k and 12-month bespoke support for late-stage startups in Advanced Manufacturing, Digital & Technologies and Life Sciences. Beyond growth, the programme celebrates role models for ambitious girls and women, particularly through the Purple Plaques scheme, which brings Women in Innovation Award winners back to their schools to share their journeys. In November, Samantha Payne, CEO of Open Bionics visited St Bernadette’s Catholic Secondary in Bristol to underline how anyone, regardless of background or gender, can change the world through innovation. Find out more and apply here.
• Knowledge Transfer Partnerships (KTP): 2025–2026 Round 5
  Closes: Thu 4 Feb 2026, 11:00. The Knowledge Transfer Partnership (KTP) programme allows a UK registered business to partner with a ‘knowledge base partner’. The KTP partnership brings new skills and the latest academic thinking into the business partner to deliver a specific, strategic innovation project. Find out more and apply here.

 

Security: a growth enabler, not a checkbox

We know uncertainty is the enemy of investment, and that investors increasingly look for evidence of robust cyber and protective security. The Secure Innovation Security Review (SISR) gives SMEs a holistic, expert led review of governance, culture, cyber, supply chain and incident management—embedding security as a strategic enabler for growth.

A recent case study from Devon-based HEL Performance shows the impact: after a disruptive cyber incident, the SISR helped the team institute pragmatic controls, strengthen vigilance across staff, and upgrade physical measures—all matched to size and risk, rather than one‑size‑fits‑all fixes. That calibration builds investor confidence while protecting IP and operations.

 “We feel safer, more empowered, and better equipped to protect what we’ve built over nearly three decades. It’s a small investment of time and money, but the return is tenfold. You get recognition for what’s working and guidance on what to improve. It’s invaluable.”

– Simon Lane, Managing Director, HEL Performance

The cost of cyber crime is rising. The average non-phishing incident now costs UK businesses £990. But the cost of prevention, especially through a part-funded scheme like SISR, is far lower. Security isn’t just an IT issue. It’s a business continuity, reputational and growth issue.

Applications for the Secure Innovation Security Review close on 31st January, apply here.

 

Leveraging technology: practical support for your business

This month will see the launch of Tech Adoption for Growth, a fully funded programme providing consultancy, grants, and expert support to help businesses embrace digital technologies, boost performance, and accelerate growth. 

Delivered by Business West, the programme will offer tailored support through practical tools and guides, regional workshops that offer peer-to-peer learning and collaboration with other businesses, as well as specialist consultancy and grants to directly support implementation of new technology.

The new programme is open to businesses in Bath and North East Somerset, Bristol, Gloucestershire, North Somerset, South Gloucestershire and Wiltshire. 

Applications are open from 5th January, apply here.

Internationalisation: pathways that open doors

For South West innovators, internationalisation widens revenue and opens the door to specialist partners, standards and pilots that accelerate scale.

In 2025, South West firms used Innovate UK’s Global Business Innovation Programme (GBIP) and the Enterprise Europe Network (EEN) to turn ambition into partnerships:

• KuasaSemi (Cornwall) secured £117k in funded initiatives and established strategic ties in Taiwan, Japan, Germany and Switzerland following consecutive GBIP visits. Read more here.
• Oort Energy (Bristol) used the Enterprise Europe Network to collaborate with Naco Technologies (Latvia) and Heraeus Group (Germany)—boosting electrolyser efficiency and cost performance. Watch our video case study here.  

 

A vision for the year: connect, collaborate, scale

We’re committed to a better-connected regional ecosystem—where innovators can move quickly between support, capability and capital. Here are key 2026 touchpoints to help you plan:

• Bath Digital Festival – 19th-21st May 2026 – a platform to allow the innovators, creators and curious minds of our region to come together to showcase, learn, connect and celebrate.
• Bristol Business Expo — Thu 19 June 2026, BAWA Conference Centre.
• South West Expo (Swindon) — Thu 2 Jul 2026, Steam/Swindon venues
• Agile on the Beach — 2–3 July 2026, Falmouth University (Cornwall) - Two days of talks and workshops focused on delivery, product, and business agility.
• South West Expo (Bristol) — Thu 1 Oct 2026, Leigh Court.

 

We invite founders, partners and investors to keep the South West’s momentum going. Together, we can turn uncertainty into opportunity, de‑risk the most novel parts of innovation, and scale the ideas that matter—locally and globally.

If you’re ready to scale with Innovate UK Business Growth support, contact us today.