On the eve of this year’s Liverpool Innovation Investment Summit, one of its organisers says chartered accountants need to step up to help clients innovate, or risk losing out to other professional services firms.

The summit, which takes place on Thursday 16 May, will bring together experts to discuss how the region can best ensure that technologists, entrepreneurs and companies get the high-quality business support and expert advice that they need. ICAEW’s Corporate Finance Faculty has supported the Liverpool Innovation Investment Summit since its inception three years ago.

Speakers include Jon Moulton, a member of the ICAEW Corporate Finance Faculty board. Moulton qualified as a chartered accountant at Coopers & Lybrand in Liverpool. Now a venture capitalist and managing partner of the private equity firm Better Capital, he has much to say about how to add value in any deal, the topic he will be tackling at the summit.

ICAEW member Steve Stuart, Chair of LYVA Labs, is one of the summit’s organisers and has practised corporate finance in Liverpool and beyond for the past 30 years. Stuart says that in the three years since the first summit was held, innovation has moved up the agenda, helped by the government’s creation of regional investment zones and thanks to the support of organisations such as Innovate UK.

However, many accountants are failing to rise to the challenge of helping their clients turn the innovation rhetoric into action. “Part of the reason is that accountants have come to the party late and can't see the fee-earning opportunity, and therefore are less inclined to want to get involved. And there isn't a great knowledge of the innovation ecosystem within the profession,” Stuart says.

The profession needs to develop the skills to get involved, Stuart urges. In particular, understanding the potential growth opportunities and risks of AI is high on the agenda.

“Getting existing businesses to innovate through data management, data capture and data science is part of the future for economic growth. [Innovation] needs to be about helping existing businesses change the way they do things. You need to know what it means for clients, and more importantly, you need to understand risk. But I am not sure we've got that message across yet, to the accountants or to their clients.

“There's too much emphasis on start-ups. However, you're going to make more economic impact by scaling up companies who currently employ 50 to 100 than you are creating a whole new raft of start-up businesses.” 

Liverpool City Region has set an ambitious target to invest 5% of its GVA in Research & Development (R&D) by 2030, double the government’s target of investing at least 2.4% of GDP in R&D by 2027. Achieving the city region’s 5% target would deliver an estimated £41.7bn of gross economic benefit, a 10% increase in productivity and 44,000 new jobs.

Stuart is urging firms to take advantage of a share of the £26.5m of funding made available through Innovate UK and the Economic and Social Research Council (ESRC) as part of the Next Generation Professional and Financial Services programme, developed to help professional service sectors including accounting to develop and use digital technologies.

Meanwhile, grants towards AI training as part of the government’s £6.4m Flexible AI Upskilling Fund are also up for grabs. Announced in the Spring Budget, the fund allows SMEs to cover up to 50% of the cost of their employees’ AI training and firms can now apply for a grant under the scheme.

Stuart is also calling on advisers to get to grips with the process for applying to the Northern Powerhouse Investment Fund II (NPIF II) following its launch in March so their clients don’t miss out. Providing loans from £25,000 to £2m, and equity investment up to £5m, the fund is designed to support innovation and create local opportunity for new and growing businesses across the North.

Against a backdrop of consolidation across the professional services sector and changing dynamics as venture capital-backed entities continue to swallow up firms, a failure to focus on innovation could come at a hefty cost, Stuart says. 

“The question is, are we doing enough now to get the profession to where it needs to be in order to be the business adviser of choice? There needs to be more collaboration and knowledge sharing. We need a greater openness about what firms need to do and then we need to develop some examples of best practice,” Stuart adds.

But innovation will only get you so far and skills issues are also high on the agenda, Stuart warns. “Certainly, in the northwest, there's a recognition that for some of this investment to take place, we're going to need the universities to put their best foot forward.

“We've got skills issues around how you retrain people with relevant skills, particularly in the light of changing demographics and an ageing population. The skills we expect of school leavers are going to change over the next five, 10, 15 years. Preparing them for the workplace is particularly relevant.”

Liverpool City Region Innovation Investment Summit 2024 Tickets, Thu 16 May 2024 at 09:00 | Eventbrite