Peter Kyle says UK could overtake US in tech amid record startup growth
Technology secretary Peter Kyle has said the UK is positioned to “overtake America” in key areas of tech, as a new wave of regulatory reforms aims to fast-track innovation and attract investment across AI, fintech and biotech.
In an interview on the UKTN Podcast, Kyle argued that the UK is now creating “the best regulatory environment in Europe” – one that could position Britain as a global leader in emerging technologies.
His remarks come as government data shows a record surge in UK tech startups, with 14,262 new companies incorporated in Q2 2025, a 16 per cent year-on-year rise.
At the heart of Kyle’s plan is the newly launched Regulatory Innovation Office (RIO), which is working with agencies including the Financial Conduct Authority (FCA) and Ofcom to reduce compliance delays and simplify regulatory pathways for fast-moving sectors.
Red tape slashed?
Kyle said the aim is to bring average approval times down from the EU-standard two years to just “a few months” in the UK, particularly for companies developing AI tools, fintech platforms, or life science breakthroughs.
“That’s not cutting any corners”, he said, “but it is using the power of government to partner with founders.”
The new office will back digital tools to help startups more easily navigate regulatory frameworks, including a proposed one-stop-shop for accessing digital policy guidance.
It’s also expected to support a wider rollout of AI-driven solutions in public services, as Kyle seeks to align the UK’s innovation drive with real-world application.
The strategy has been welcomed by parts of the tech sector, which has long complained of fragmented or outdated oversight.
In June, DeepMind chief executive Demis Hassabis called for ‘smart regulation’ of AI, warning that the UK could fall behind if it failed to build public trust and establish clear safeguards.
UK startup ecosystem shows signs of resurgence
The latest data from accounting firm RSM UK points to green shoots of a rebound in the UK’s tech ecosystem, with new company formations hitting their highest level since records began.
All 12 regions posted year-on-year growth in tech incorporations, despite ongoing macroeconomic uncertainty.
Ben Bilsland, head of technology at RSM, said: “Entrepreneurs have realised the uncertainty is here to stay. Instead of waiting, they’re choosing to act.”
However, he cautioned that looming tax reforms and possible changes to R&D incentives could dampen momentum if not managed carefully.
“The government will need to tread carefully to ensure the UK remains one of the best places in the world to start and grow a tech company”, Bilsland added.
As global competition intensifies, and calls grow for more coherent AI oversight, Kyle’s reforms mark a shift toward more assertive policymaking.
Whether they deliver a lasting edge for UK tech remains to be seen, but for now, the sector appears ready to meet the moment.