The U.K. is facing challenges when it comes to commercializing technology businesses on a global scale. Warren East, the former CEO of British chip design firm Arm, highlighted the need for a mindset shift within the investor community to help the U.K. succeed on the world stage. According to East, lackluster growth and poor rates of GDP per head in the U.K. have become a source of national embarrassment. He pointed out that too often, firms that achieve scale in Britain choose to either change locations or list abroad, particularly in countries like the U.S., due to the challenges of achieving global relevance from the U.K.
East emphasized that while there is a lot of innovative technology being developed in the U.K., much of it ends up being exported and commercialized elsewhere around the world. This trend of British-made technology being exploited in other countries is a common occurrence, according to East. He acknowledged that there is no easy solution to the problem but suggested that the U.K. needs to foster more risk appetite to support high-growth tech firms. This includes encouraging more capital investment and creating an environment that supports the scaling up of businesses.
One of the key issues highlighted by East is the disparity in investor risk appetite between the U.S. and the U.K. He noted that there are far deeper pools of capital available in the U.S., which contributes to a higher level of investor risk appetite in that country. East stated that businesses in the U.K. often struggle with scaling up due to a lack of investment and risk-taking. He mentioned that there have been calls within the British entrepreneurial community for changes to capital market rules to allow more investments from pension funds into startups, in an effort to stimulate risk appetite in the U.K.
While East is optimistic about the potential for positive changes in the U.K. investment landscape in the coming years, he also cautioned that businesses cannot solely rely on regulatory changes to drive progress. He stressed the importance of taking proactive steps to support the growth and commercialization of technology businesses in the U.K. East’s remarks come in the wake of Arm’s decision to list on the Nasdaq in the U.S. last year, a move that dealt a blow to the U.K.’s ambitions of holding more tech debuts in the country. Despite this setback, East believes that with the right support and mindset shift, the U.K. can overcome the challenges it faces in commercializing technology on a global scale.
The U.K. must address the issues of investor risk appetite, capital availability, and regulatory barriers to create a more conducive environment for technology businesses to thrive and succeed on the world stage. By fostering a culture of innovation, risk-taking, and support for high-growth firms, the U.K. can position itself as a global leader in technology commercialization.
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