The U.K. has been facing criticism for its lackluster growth and poor rates of GDP per head when it comes to commercializing technology businesses globally. According to Warren East, former CEO of British chip design firm Arm, there needs to be a mindset shift from the investor community in order for the U.K. to succeed on the world stage. East highlighted the fact that firms that achieve scale in Britain often end up changing locations or listing abroad in countries like the U.S. due to challenges in achieving global relevance from the U.K.
East emphasized that while there is a lot of innovative technology being created in the U.K., too much of it is being exported elsewhere for commercialization. He expressed concern over the trend of British-made innovations being exploited by other countries, rather than benefiting the U.K. economy. This situation raises questions about the effectiveness of commercialization efforts within the U.K. and the need for a more sustainable approach.
One of the key factors contributing to the challenges faced by the U.K. in the tech industry is the lack of risk appetite among investors. East highlighted that there is a significant difference in investor risk appetite between the U.S. and the U.K., with deeper pools of capital available in the U.S. to support high-growth tech firms. He stressed the need for the U.K. to encourage more risk appetite in order to compete effectively on a global scale.
While East acknowledged that there is no easy solution to the problem, he suggested that the U.K. needs to focus on getting commercialization right and supporting the scale-up of tech businesses. He pointed to the need for changes in capital market rules to attract more investments from pension funds into startups and stimulate risk appetite in the U.K. entrepreneurial community. Despite the challenges, East remains optimistic that there will be positive developments in the coming years.
The U.K. faces significant challenges in commercializing technology businesses on a global scale. The need for a mindset shift, a focus on retaining innovation within the country, and encouraging more risk appetite among investors are crucial factors that need to be addressed. While there are no easy solutions, it is clear that changes are needed to improve the competitiveness of the U.K. tech industry and support the growth of innovative businesses within the country.