A combination of rising deal values, robust Ministry of Defence (MoD) defence spending and significant R&D expenditure are shining a light on the South West – home to ForrestBrown’s headquarters – as a regional growth and innovation hotspot.
Building on data from ForrestBrown partner, Tech South West, which highlighted that investment reached £211 million across 93 deals in Q1 2026, we found that annual equity investment in the South West could hit around £1.1 billion by 2031. Applying the same illustrative 5% annual growth scenario, we also found that deal volumes could climb to approximately 475 a year.
A Freedom of Information (FOI) request submitted by ForrestBrown between March and April 2026, also highlights the level of private capital flowing into the region. The data showed £43.7 million of private investment associated with Plymouth & South Devon Freeport, alongside 66 jobs created or supported against £65,806 of public funding reported in the FOI response.
Alongside this, significant public and private investment is strengthening the South West’s growth pipeline. MoD figures show industry spending in the region reached £6.6 billion in 2024/25, while the government’s £50m Plymouth Defence Growth Deal is expected to unlock up to £34 million from industry and local partners.
R&D investment climbs
HMRC’s latest R&D statistics paint a similar picture. Businesses registered in the region accounted for around £2.1 billion of qualifying R&D expenditure in 2024/25.
Our analysis suggests this could rise to approximately £2.5 billion by 2029/30 – around £400 million above current levels – if growth broadly follows the Office for Budget Responsibility’s (OBR’s) medium-term outlook for nominal economic growth.
The value of individual claims has also risen sharply. Average qualifying expenditure per South West claim doubled from about £351,000 in 2021/22 to £702,000 in 2024/25, while average R&D tax relief increased by around 85%, from £62,000 to £115,000 per claim.
HMRC’s latest Patent Box data (published in September) reinforces the theme of growing innovation investment. Relief received by South West businesses almost doubled from £48 million in 2023/24 to £95 million in 2024/25 – the largest increase recorded by any UK region.
Long-term potential
Collectively, these figures indicate that the region is attracting strong investment, positioning it well for long-term growth. Reflecting on the figures, ForrestBrown Commercial Director, Christopher Penfold, said:
“The South West has all the ingredients to become one of the UK’s most important innovation economies. Investment is rising, businesses are committing billions to R&D, and the region has established real strengths in sectors such as defence, aerospace and advanced engineering.
“Now, we need to harness that capital effectively so more businesses start, scale and ultimately choose to stay in the South West. That means creating the right conditions for companies to keep investing in R&D, commercialise their ideas and intellectual property, and access the capital they need to grow. If we can get that right, this could be a pivotal moment for the region to become a vital cog in the UK’s growth engine.”
Methodology
Equity investment projection: ForrestBrown applied an illustrative 5% annual growth rate to annualised 2026 Tech South West data, producing a 2031 projection of approximately £1.2 billion across 400 deals.
A Freedom of Information (FOI) request was submitted by ForrestBrown between March and April 2026 to UK Investment Zone authorities and Freeport delivery bodies to obtain information on funding allocations, private investment secured, jobs created, business registrations and marketing activity.
R&D expenditure projection: ForrestBrown applied annual growth of 3.5%, broadly aligned with the OBR’s March 2026 medium-term nominal economic growth outlook, to HMRC’s 2024/25 South West qualifying R&D expenditure figure, producing a projection of approximately £2.54bn by 2029/30 – around £400m above current levels.
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