Science and technology is set to be at the heart of the UK’s new industrial strategy — to be launched, we’re told, latest this autumn as the government looks to find new ways to reset the UK economy after the worst recession in 300 years.
Trailed news of the policy suggests that there will be a heavy focus on environmental technology, artificial intelligence (AI), green tech, and promoting technology clusters outside of London, taking in Manchester, Birmingham, Oxford and Cambridge.
All this sounds sensible. These are, after all, areas that are vibrant technology hubs which have spawned some of the brightest stars of the UK tech industry.
We also hear that the government is looking at new ways to fund tech. The big idea from the Prime Minister’s chief aide Dominic Cummings is the development of a UK version of the Defense Advanced Research Project Agency, the US organisation that funded and fostered tech innovation responsible for inventions such as the internet itself. This too sounds promising.
However, before we get too carried away, the UK also needs to remember and celebrate the structural and financial bedrock that has made it so successful as an entrepreneurial technology hub: London.
The UK’s legal system, particularly our internationally renowned patent laws, and our capital’s position as one of the world’s key financial centres are just as important in nurturing the next breed of tech stars and the innovations that create them as investing in new technology.
While the hubs for innovation and brilliance around the country should be nurtured (not least because of the valuable role they have to play in the levelling up agenda), we must not forget that London remains the financial and legal dynamo that drives technology and other sectors forward.
The UK has in the past been accused of being brilliant at creating technology startups and nurturing entrepreneurs, but less good at scaleup and later stage growth. The argument has often been that countries like the US and Japan end up as the beneficiaries of UK tech innovation, as they have a wealth of funds and the mega companies that can buy into scaleup tech and take it to the next level. We create the innovation, others profit.
So while the UK has done much to boost VC and first and second stage funding for technology companies, if the industrial strategy is to create FTSE powerhouses of the future, we need to focus more on our ability to provide later stage funding.
That funding doesn’t just lie with VC, banks, private equity and government accelerator funds. Crucially, it also lies with the abundant private capital that exists centred around London.
While levelling up and boosting the brilliant innovation in UK regions is key, London’s role as a tech hub for Britain and for the rest of the world should not be overlooked. Tech companies don’t just run on inspiration and perspiration — they also need the right funding at the right moment, as well as a solid legal framework that protects their innovation and provides an international foundation for business.
London provides that in spades, and it remains a vital part of the UK’s tech success story.
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