The commercialization of technology businesses is a critical aspect of economic growth and global competitiveness. However, according to Warren East, a former CEO of British chip design firm Arm, the UK is struggling to effectively commercialize its innovative technology businesses on a global scale. In a keynote speech at Cambridge Tech Week, East highlighted some key issues that are hindering the UK from succeeding in this area.
East pointed out that there have been criticisms of lackluster growth and poor rates of GDP per head in the UK, which he described as a national “embarrassment.” He noted that too often, firms that achieve scale in Britain tend to change locations or list abroad in countries such as the U.S. due to difficulties in achieving global relevance from the UK. This trend poses a significant challenge for the UK in retaining and benefiting from its innovative technology businesses.
One of the key concerns raised by East is the tendency for innovation created in the UK to be exported elsewhere around the world for commercialization. He highlighted a common story of innovative technology being developed in Britain but then being exploited in other countries. This issue not only deprives the UK of the economic benefits of its innovation but also undermines its global competitiveness in the technology sector.
East emphasized the need for a shift in the mindset of the investor community in the UK to support high-growth tech firms. He mentioned that there is a lack of risk appetite among investors in the UK compared to the U.S., where there are deeper pools of capital available for tech startups. East suggested that the UK needs to encourage more risk appetite among investors to foster the growth of technology businesses and drive innovation on a global scale.
There have been calls within the British entrepreneurial community and venture capital firms for changes to capital market rules to facilitate more investments from pension funds into startups. This move is seen as a way to stimulate risk appetite and support the growth of technology businesses in the UK. East expressed optimism that there will be more initiatives in this direction in the coming years, but he cautioned that businesses cannot solely rely on regulatory changes to drive innovation and growth.
The example of Arm listing on the Nasdaq in the U.S. serves as a reminder of the challenges faced by technology companies in the UK. Despite its success and global reach, Arm’s decision to list in the U.S. was a setback for UK officials and the London Stock Exchange’s efforts to attract more tech debuts. East’s remarks underscore the intense global competition in the technology sector and the need for the UK to enhance its commercialization strategies to compete effectively on the world stage.
The challenges in commercializing technology businesses in the UK require a comprehensive and coordinated effort to address. The country’s potential for innovation and technological advancement is significant, but realizing that potential will require a shift in mindset, increased risk appetite among investors, and a conducive regulatory environment. By overcoming these challenges, the UK can position itself as a global leader in technology commercialization and drive economic growth and competitiveness in the digital age.