Regional climate tech is emerging as a significant UK growth opportunity, with clusters in Scotland, the North East and the Midlands drawing strength from universities, legacy industry and skilled supply chains. These ecosystems are positioned to support jobs, local resilience and decarbonisation, but they face structural barriers that limit their ability to scale. Investors and policymakers are increasingly looking at regional climate tech as an alternative to London-centric growth, with calls for support that reflects the different industrial strengths of each region.
Funding remains the clearest constraint. London took roughly two-thirds of UK climate tech investment in 2024, leaving many regional firms struggling after their first funding round. The current landscape is described as fragmented, with founders outside the capital forced to navigate smaller funding pools and complicated grant systems. A stronger model would combine nationally consistent policy with regionally tailored plans, including Industrial Strategy Zones, simpler grants and closer coordination between the British Business Bank, GB Energy and the National Wealth Fund. A clearer pathway from grants to equity would give early-stage companies a more stable route to hiring, prototyping and growth.
Accelerators also play an important role, but access and quality vary sharply across the country. Some regions, including Scotland and Northern Ireland, have stronger participation, while parts of the North and Midlands lag behind. University-linked programmes help incubate technical ideas, yet they can be less accessible to non-academic founders and may not provide enough commercial support. A national network of connected accelerators could improve outcomes by sharing curriculum, mentors and investor access, while placing more emphasis on sales, procurement and scaling alongside technical development.
Artificial Intelligence is becoming a more decisive factor in climate tech investment and may deepen regional imbalances if support remains concentrated around software businesses in the South. In 2024, Artificial Intelligence-enabled projects accounted for a big chunk of sector funding, mostly in software and clustered in the South. Hardware-focused companies working on batteries, turbines and heavy engineering risk missing out unless regional ecosystems build relevant Artificial Intelligence capabilities. Adding Artificial Intelligence for hardware modules to accelerators and university programmes could help regional firms apply modelling, predictive maintenance and data-driven optimisation to physical products and compete for future investment.
