The United Kingdom has long been a hub for innovation and technology, but it seems that the country is struggling to capitalize on its potential on the global stage. Former CEO of British chip design firm Arm, Warren East, expressed concerns about the lackluster growth and poor GDP per head in the UK, calling it a source of national embarrassment. In a keynote speech at Cambridge Tech Week, East highlighted the challenges faced by UK-based technology businesses in achieving global relevance and success.
One of the main issues pointed out by East is the tendency for successful firms in the UK to either relocate or list abroad, particularly in countries like the US. This trend reflects the difficulties faced by UK-based companies in scaling up and achieving global recognition. Despite the abundance of innovative technology being developed in the UK, there is a disconnect when it comes to commercializing and exploiting these innovations within the country itself.
According to East, there is a pressing need for a mindset shift within the investor community in the UK to support high-growth tech firms. He emphasized the importance of encouraging more risk appetite to drive innovation and expansion. Comparing the UK to the US, East noted that there is a significant disparity in investor risk appetite, with the US having deeper pools of capital available for tech startups.
While East did not propose a definitive solution to the commercialization challenge, he suggested that the UK must focus on getting commercialization right and fostering a supportive ecosystem for tech startups to thrive. He urged for more investment from pension funds into startups and a change to capital market rules to stimulate risk appetite. East also highlighted the need for businesses to take proactive steps in scaling up, rather than waiting for regulatory changes.
The listing of Arm on the Nasdaq in the US was a significant blow to the UK’s aspirations of becoming a hub for tech debuts. Arm, known for its chip architectures in smartphones, remains majority-owned by Japanese tech giant SoftBank. This move reflects the challenges faced by UK-based companies in maintaining their roots in the country while pursuing global opportunities.
The UK’s struggle with commercializing technology businesses globally presents a critical challenge that requires immediate attention. Warren East’s insights shed light on the need for a fundamental shift in mindset and approach within the investor community to support the growth and success of UK-based tech firms. By addressing the barriers to commercialization and fostering a risk-taking culture, the UK can unlock its full potential as a global leader in technology innovation.