The former CEO of Arm, Warren East, highlighted the challenges facing the UK in commercializing technology businesses globally. Despite the country’s potential for creating innovative technology, there is a lack of global relevance and commercial success on the world stage. This is evident in the criticisms of lackluster growth and poor GDP rates per head in the UK, which East described as a source of national embarrassment. The tendency for firms to either relocate from the UK or list abroad in countries like the US due to difficulties in achieving global relevance further exacerbates the problem.
East emphasized the need for a mindset shift within the investor community to support high-growth tech firms in the UK. He mentioned that there is a significant amount of innovation created in the UK, but much of it is exported and exploited elsewhere in the world. This highlights the lack of commercialization and the failure to capitalize on the potential of UK-based technology businesses. East stressed the importance of encouraging more risk appetite among investors to foster the growth of global businesses originating from the UK.
One of the key obstacles identified by East is the difference in investor risk appetite between the US and the UK. He noted that the US has far deeper pools of capital and a higher willingness to take risks when investing in tech startups. This disparity in risk appetite hinders the scale-up of technology businesses in the UK, leading to missed opportunities for growth and success. East suggested that the UK needs to create a more favorable environment for investments, including changes to capital market rules that would stimulate risk appetite and attract more funding from sources like pension funds.
While East acknowledged that there is no “silver bullet” solution to the challenges facing UK tech businesses, he expressed optimism about the potential for change in the coming years. He highlighted the efforts of the British entrepreneurial community and venture capitalists to push for reforms that would enable more investments in startups and support high-growth tech firms. However, East cautioned that businesses cannot afford to wait for regulatory changes and must take proactive steps to address the issue of commercialization.
The UK’s struggle with commercializing technology businesses globally is a multifaceted issue that requires a collective effort from the investor community, entrepreneurs, and policymakers. By fostering a greater risk appetite, creating a conducive investment environment, and encouraging the growth of tech startups, the UK can overcome the challenges and realize its potential as a hub for innovative technology on the world stage.