The former CEO of British chip design firm Arm, Warren East, expressed concerns about the lackluster growth and poor rates of GDP per head in the U.K. being a source of national “embarrassment.” He pointed out that too often, firms that achieve scale in Britain tend to change locations or list abroad, particularly in countries like the U.S. This trend is a clear indicator of the difficulties with achieving global relevance from the U.K. East emphasized the need for a mindset shift from the investor community to propel the U.K. onto the world stage in terms of technology commercialization.
East highlighted that there is an abundance of innovation taking place in the U.K., but a significant portion of it gets exported to other countries for commercialization. He lamented that many promising technologies originating in Britain end up being developed and exploited elsewhere. This trend signifies a missed opportunity for the U.K. to capitalize on its innovative capabilities and establish a stronger presence in the global market. The failure to retain and scale up tech businesses within the country is a major hurdle that needs to be addressed.
According to East, one of the key factors hindering the growth of technology businesses in the U.K. is the lack of risk appetite among investors. He noted that there is a notable disparity in investor risk appetite between the U.S. and the U.K., with the former having far deeper pools of capital available. This discrepancy has resulted in many high-growth tech firms seeking funding and support outside of the U.K., ultimately limiting the country’s ability to nurture and retain successful technology businesses.
East acknowledged the efforts within the British entrepreneurial community and venture capital firms to advocate for changes in capital market rules. These reforms aim to attract more investments from pension funds into startups and stimulate risk appetite within the U.K. business landscape. While there is optimism for positive changes in the coming years, East cautioned that businesses cannot solely rely on regulatory changes to drive growth and innovation. There is a pressing need for more proactive measures to foster a conducive environment for technology commercialization in the U.K.
The challenges faced by the U.K. in commercializing technology businesses underscore the critical need for a transformation in mindset and strategy. The country must prioritize retaining and scaling up tech firms domestically to leverage its innovative potential and establish a stronger foothold in the global market. Encouraging greater risk appetite among investors, advocating for capital market reforms, and nurturing a supportive ecosystem for technology entrepreneurship are essential steps towards overcoming these challenges. It is imperative for the U.K. to seize the opportunity to become a leading hub for technology innovation and commercialization on the world stage.
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