Thank you, Deputy Presiding Officer. I welcome this opportunity to update Members on Wales’s progress in developing our small business research initiative, more commonly known as SBRI. In 2013, our ‘Innovation Wales’ strategy, amongst other things, urged a more imaginative approach to innovation in public service delivery and Government procurement. In the same year, in partnership with InnovateUK, Welsh Government implemented a £3 million catalyst programme to inspire the Welsh public sector and businesses to engage in SBRI competitions. The UK model was based on a long-standing United States programme, the small business innovation research, or SBIR. Working with small and medium-sized enterprises, this spends around $2.5 billion each year, developing solutions for federal government needs, and uses procurement spend, not government grants. In the UK, SBRI contracts with companies have increased from under £15 million in 2010 to over £50 million this year. A wide range of innovative products and solutions have been developed, and the merits of the SBRI mechanism are now being widely recognised across government and industry. In Wales, SBRI is helping to make a transformative impact on practical public sector problems, as well as helping to solve some of society’s grand challenges, highlighted in ‘Innovation Wales’.

Each SBRI competition focuses on an area of public sector service where solutions either do not yet exist or where partial solutions might be improved. Our first round of competitions generated real interest across the Welsh public sector and challenges included Cardiff council’s problem of how to retrofit energy efficient solutions into its traditional and historic buildings, Abertawe Bro Morgannwg University Local Health Board’s drive to improve the health and well-being of our people through the better use of collective health data, Natural Resources Wales’s issues in controlling livestock movement to reduce the impact of agriculture on the water environment, and Betsi Cadwaladr University Local Health Board’s ambition to improve patient care by helping nurses and carers reduce administration duties, so spending more time with patients. The target for this last challenge was for nurses to spend 10 per cent more time with patients, and just think how valuable 10 per cent more patient time would mean to those patients, their relatives and hospital efficiency. After two years of practical collaboration between the hospital’s nurses and a small Bangor start-up company, a prototype software solution has been developed that promises to increase nurses’ time with patients not by the promised 10 per cent but, potentially, up to 23 per cent. The success of these first challenges showed us that the public sector can be an effective, intelligent, lead customer, helping to grow innovative Welsh companies and create jobs, growth and welfare for Wales.

I now want more SMEs to become involved in the public sector procurement process, to use research and development funding to develop new solutions to tough problems. And I want the challenges to be socially relevant, having real benefits for Welsh people. We learnt from the pilots that there was a growing willingness to innovate across the Welsh public sector and so, along with InnovateUK, we have run two further calls. These have a declining public intervention rate as the programme gains momentum and the benefits to all parties are recognised and appreciated. Although not limited to small businesses, the competitions have seen strong representation from our SMEs. Funding levels will vary, but projects typically span two or more years, with initial funding of up to £100,000 for each successful company. The best will then be able to compete for further contracts of up to £1 million and more to commercialise their ideas.

Under the programme, we have supported Natural Resources Wales to improve the regeneration of native species and soil health, which will fight the impacts of invasive non-native species like Japanese knotweed. We have supported the north Wales brain injury service to encourage patients’ independence in cooking tasks, to ease the pressure on social care and enhance people’s quality of life. We are helping South Wales Police develop innovative predictive analytic tools, which will make better use of their resources and deliver an improved service to the communities of south Wales.

The Welsh Government is also successfully using the programme. Our transport department held an SBRI competition to develop solutions to help reduce the number of motorcyclists killed or seriously injured on our roads. Two projects were chosen and the first one is now completed. Armourgel Ltd has developed a motorcycle helmet liner that will significantly reduce the impact to a rider’s head during a collision. This can make the difference between a serious brain injury and a minor one. The second project has developed a junction alert system, which will soon to be trialled on Welsh roads. This project will be able to test the system in the peak motorcycling season, and by September, the company will have fully tested the system in all weather conditions and will report on its market potential. Both of these projects have the potential to save the lives of motorcyclists, not just on Welsh roads but across the world.

This programme is not only promoting a culture change in the public sector; it has been showcased by Innovate UK as an example of best practice. Other devolved regions are learning from Wales’s example, and it’s also attracting attention from Ireland, Sweden and Australia. To date, 29 public sector contracts for research and development have been awarded to Welsh business, valued at over £1.8 million. And in total, 66 contracts valued at £4.9 million have been awarded by the Welsh public sector. Over 300 enterprises have been assisted, and over £2 million in match funding has been leveraged into Wales from Innovate UK and UK Government departments. Collaborations have been forged with local authorities, health boards, Natural Resources Wales, police forces and Welsh and UK Government departments. So far, three central Government departments have contributed financially to Wales-led challenges.

We will continue to work closely with Innovate UK as they seek to maximise the impact of SBRI. My aim now is for our SBRI programme to become a mainstream tool in the Welsh public sector, promoting innovation and driving forward our technological potential. SBRI can open up huge opportunities for Welsh businesses and help solve some of the grand challenges we will all face in the future. We plan to use it. I hope that you will support this aim. Diolch.