The U.K. has been facing criticism for its lackluster growth and poor rates of GDP per head. This has led to a sense of national embarrassment for the country. Warren East, former CEO of British chip design firm Arm, highlighted this issue during a keynote speech at Cambridge Tech Week. He mentioned that firms in Britain often tend to change locations or list abroad, such as in the U.S., in order to achieve global relevance. This indicates a need for a mindset shift in the investor community to support the commercialization of technology businesses on a global scale.
East emphasized the need for Britain to focus on commercialization to retain innovative technology within the country. He noted that while a lot of innovation is created in the U.K., it is often exported elsewhere for commercialization. This results in a loss of potential economic benefits for the country. East highlighted the importance of encouraging more risk appetite to support high-growth tech firms in the U.K. in order to retain and scale up businesses within the country.
One of the key challenges identified by East is the difference in investor risk appetite between the U.S. and the U.K. He mentioned that there are deeper pools of capital in the U.S., which leads to higher investor risk appetite in the country. This makes it easier for startups to scale up and achieve global success. In contrast, the U.K. faces limitations in terms of investor risk appetite, which hinders the growth of tech firms within the country.
East pointed out that there have been efforts within the British entrepreneurial community and venture capitalists to push for changes in capital market rules. These changes would allow for more investments from pension funds into startups and stimulate risk appetite in the U.K. However, he also highlighted the need for businesses to take proactive steps and not wait for the rules to change. It is essential for businesses to adapt to the existing investment landscape and find ways to grow and scale up within the country.
The challenges faced by the U.K. in commercializing technology businesses can have a significant impact on the tech industry in the country. As seen in the case of Arm, which listed on the Nasdaq in the U.S., there is a risk of losing out on tech debuts to other countries. This can hamper the growth of the tech sector in the U.K. and limit its ability to compete on a global scale. It is important for the country to address these challenges and create a supportive environment for tech businesses to thrive.
The U.K. needs to address the issues related to commercializing technology businesses in order to compete effectively on the world stage. By encouraging more risk appetite, fostering innovation, and creating a conducive environment for startups to scale up, the country can retain and grow its tech industry. It is essential for the investor community, businesses, and policymakers to work together to overcome these challenges and unlock the full potential of the U.K.’s technology sector.