The former CEO of British chip design firm Arm, Warren East, recently gave a keynote speech at Cambridge Tech Week criticizing the U.K.’s lackluster performance in commercializing technology businesses globally. According to East, there needs to be a mindset shift in the investor community in order for the U.K. to succeed on the world stage. He pointed out that there have been criticisms about the country’s poor rates of GDP per head, which he considers a source of national embarrassment.
The Challenge of Achieving Global Relevance
East mentioned that companies in the U.K. that manage to achieve scale often end up changing locations or listing abroad due to difficulties in achieving global relevance from the country. Despite the potential for U.K.-based innovative technology, East believes that the country struggles to realize as many global businesses as its promise would suggest. He emphasized the need for the U.K. to get commercialization right, as too much innovation created in the country ends up being exported elsewhere in the world.
In order to address the challenges faced by U.K. tech firms, East suggested that the country needs to encourage more risk appetite to support high-growth companies. He highlighted the difference in investor risk appetite between the U.S. and the U.K., noting that there are deeper pools of capital available in the U.S. for scaling up businesses. East also mentioned that there have been efforts within the British entrepreneurial community and venture capitalists to push for changes to capital market rules that would stimulate risk appetite and attract more investments from pension funds into startups.
Despite the current challenges, East remains hopeful for the future of technology businesses in the U.K. He mentioned that there is an expected increase in efforts to change capital market rules and encourage more investments in startups. However, he also warned that businesses cannot wait for these changes to happen and need to take proactive steps to address the issues they face. Last year, Arm’s decision to list on the Nasdaq in the U.S. was seen as a major setback to the U.K.’s ambitions to hold more tech debuts in the country. The company, majority-owned by Japanese tech giant SoftBank, serves as a symbol of the struggles faced by technology businesses in the U.K. when it comes to achieving global success.
The U.K. needs to take significant steps to address the challenges of commercializing technology businesses globally. By encouraging more risk appetite, changing capital market rules, and supporting high-growth tech firms, the country can work towards creating a more conducive environment for innovation and entrepreneurship. It is essential for the U.K. to seize the opportunities presented by its innovative technology sector and to overcome the barriers that have hindered its ability to compete on the world stage.