After what was a difficult year for tech firms, City A.M. sat down with Stephen Kelly, chairman of Tech Nation, the industry body that represents UK startups and runs Britain’s Tech Nation visa scheme for foreign entrepreneurs.
Brexit has just taken place, how will this impact London’s startup space?
Brexit is the UK’s opportunity to set the standards around the world for what the balance between a highly innovative and regulated startup environment looks like. Achieving this would give UK fintechs and startups a great advantage on the global stage. But we must be bold and brave, and take this chance to move away from the EU and its way of thinking. As Covid-19 has challenged many of our old values in a fundamental way, we should now take stock and reflect on what rebuilding back better looks like in a post-Brexit world.
Let’s look ahead indeed. What are your predictions for 2021?
Before Covid-19, the UK’s tech sector was growing six times faster than the UK economy as a whole, creating highly-paid and skilled jobs in the economy, so we can expect this to be at the core of driving an economic recovery this year. Importantly, with a strong pipeline of global tech leaders in the regions, we can expect this growth to continue driving the levelling-up of Britain next year. We are expecting tech exports to double by 2025 in the aftermath of both the pandemic and Brexit.
As the Chair of Tech Nation, you are on top of tech trends, startup launches and innovation. What was the biggest technological breakthrough for you in 2020?
While the tech sector has been growing at pace over the last decade, the events of last year have cemented its place at the core of our economy. The role of tech in transforming the way many people work remotely will change the game for businesses going forward. These technologies have enabled us to completely reimagine ways of working that will have a transformative impact on employee wellbeing and business efficiency going into next year. UK firm Hopin is just one success story of this breakthrough.
Speaking of Hopin, you are an investor in early-stage companies in the UK, which firms really stood out for you this year?
Some of the biggest investments we have seen this year have been by companies who rapidly adapted their business proposition and were able to scale at pace, like Hopin, an online events platform, and Gousto, a recipe box company, both of which became tech unicorns this year reaching $1bn valuations.
Personally, I enjoy investing in high-growth companies. One company I have invested in this year is Locum’s Nest, a HealthTech company transforming the life for doctors and health professionals in the NHS.
I expect tech exports to double by 2025 in the aftermath of both the pandemic and Brexit
Speaking of health concerns and the NHS, how have Covid and the ongoing lockdowns impacted your work and investment decisions?
This year has accelerated the everyday need for technology and the importance of supporting technology founders globally. These are the people who are creating new solutions today to tackle the biggest challenges of our lifetime, so decisions that enable the UK’s scaling businesses to thrive have never been so important. Different parts of the tech sector have not been affected in the same way, so the pandemic has also highlighted how we need to take a smart and agile approach to all of the work we do, both at Tech Nation but also personally as an investor.
There is a lot of talk about a ‘green industrial revolution’. Tell us more.
The idea of a green industrial revolution has been growing for many years now but a sense of urgency has certainly accelerated in the past year. The UK’s response of setting an objective of reaching net zero emissions by 2050 made it the first major economy in the world to pass legislation on such a target, but governments will never be able to act fast enough to fix our planet’s environmental problems alone. Net zero technology companies are a critical part of the solution.
The World Economic Forum suggests that digital technology could reduce global greenhouse gas emissions by up to 15 per cent by 2030
Supporting these companies in their scaling journey is therefore key to driving the transition to a zero carbon economy and a crucial part of this is incentivising VCs to support green tech. There needs to be a longer-term strategy towards changing how we view company performance that goes beyond profit, but takes into account how it’s driving sustainability on the world stage so that these companies have the growth capital to drive transformation.
Finally, diversity and equality are increasingly on the radar of tech investors and other City firms. Do you feel most fintech players have a serious strategy in place or is it merely hollow talk? For example, look at differences in pay.
Like the rest of the tech sector, fintech has much more work to do to increase diversity in all its forms. It’s imperative that firms creating new technologies are representative as companies with greater gender and ethnic diversity are more likely to not only drive business growth, but produce products that cater to a more diverse audience, yield higher revenues, be more innovative, and attract better talent.