The Government is spending £2million to find a cure for baldness.
Science minister Lord Sainsbury says he wants the UK to become the world leader in hair restoration.
He is supporting a new treatment called Biotechnology, reports The Sun.
During the treatment the hair cells are grown in a test tube then injected into a bald pate.
He said: "Biotechnology provides a real opportunity to harness the world-class expertise we possess in Britain.
"This initiative should establish British industry as the world leader in this area."
The treatment is being developed by UK firm Intercytex, set up by biochemist Dr Paul Kemp.
He said: "Analysts estimate a good baldness treatment could be worth £1billion a year in Britain and many times that worldwide. The idea is to inject cells into the scalp, where many will develop into new hair follicles.
"Current hair transplant techniques take a long time so they cost a lot. This new procedure would be faster and cheaper."