Britain’s tech unicorns are galloping overseas

The UK has a tech scale-up problem. Too often we fail to support our most innovative and successful startups to grow into global competitors within the UK. Instead, we’re seeing a trend of ‘UK begins, elsewhere cashes in’. Our brightest companies pursue greater growth potential in other markets or seek acquisition by foreign companies. Two poster children of UK tech success, Revolut and Monzo, have recently announced that they may list in the US rather than the UK stock market.

DeepSeek’s dramatic arrival on the scene last week shows the global race for tech dominance is on. And if AI foundation models can be trained more cheaply and quicker than previously thought, it’s even more urgent to do everything we can to ensure UK talent makes the most of those opportunities.

There can be no doubt that British tech unicorns galloping overseas as they reach maturity is damaging to UK PLC. Decreased global competitiveness, weaker economic prospects and a ‘brain drain’ of talented individuals are all likely consequences of failing to support our companies to scale at home.

This is a serious problem, especially for a Government that has declared economic growth to be its number one priority. We can and must do better than act as an ‘incubator economy’ for countries with greater ambition.

We must be more ambitious for tech scale-ups and better at championing entrepreneurial success. We need to incentivise founders to stay in the UK to grow their businesses, or fail and try again.

Lack of capital is a key barrier that needs to be tackled. Steps taken by previous and current governments to unlock more domestic growth funding are therefore welcome. But they need to be accelerated, especially for us to capitalise on AI. The Government must also be resolute in its commitment to delivering the ambitions set out in the AI Opportunities Action Plan. We mustn’t underestimate just how big a shift in mindset that will require across Whitehall and the public sector. This Labour Government must face up to some hard choices: for example, liberating tech scaleups to achieve economic growth or legislating for new employment rights?  

As to how Government can make some practical difference now, sorting out the complex and bureaucratic publicly funded support schemes for scale-ups is where it should start. What’s on offer is like a bowl of spaghetti drowned in alphabet soup. Indeed, applying for the schemes is so complicated small firms are forced to hire consultants to do it for them. Not surprisingly, we learned last week that only one in ten applications for support to Innovate UK were successful. All of this needs urgent examination with a focus on consolidating existing programmes to ensure maximum impact. Government programmes that are not delivering value for money should be wound up.

The Government must be consistent and determined in its focus on enabling homegrown AI and creative technology businesses to develop in the UK, rather than scaling overseas. The next time there is a DeepSeek style breakthrough in AI, we want a UK company to be one making the headlines. In a tight fiscal environment, there will be competing priorities. But, to misquote Benjamin Franklin, by failing to scale, we are preparing to fail.

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