The UK stands at a crossroads in its ambition to become a leading force in science and technology.
Despite a strong research base, numerous startups, and venture capitalists, its global market presence remains weak. Change is imperative.
The Current Economic Landscape
The chancellor, Rachel Reeves, faces significant economic challenges as she prepares to deliver the first Labour budget since 2010. Hard choices on tax, spending, and borrowing loom large. Critics, however, argue that the economy is performing well, with a growth rate exceeding 2% this year. Yet, the reality of corporate Britain, especially in new technologies, paints a less rosy picture.
Weak Presence in Global Tech Sectors
Britain’s representation in various tech sectors is alarmingly thin. For instance, there is only one UK-based software company and one electronics company in their respective global top 100s. Additionally, there is just one medical device maker in the global top 50, no companies in the top 25 biotech firms, and only one in the top 24 scientific instrument firms. Even including the chip designer Arm, now quoted in New York, the UK’s presence is minimal.
Challenges with Growth Companies
The sale of companies like DeepMind to Google and Arm to Japan’s SoftBank is indicative of a broader issue: promising UK companies being snapped up by foreign investors, often due to insufficient control by their founders.
The Role of Prime Companies
The decline in British stock market values over the past two decades has exacerbated this issue, with many pension funds and insurance companies withdrawing from the market.
Government Intervention and Potential Solutions
Such interventions could help create a more conducive environment for tech companies to thrive in the UK, reducing the need for them to seek foreign investment.
The Treasury’s Reluctance
There are concerns that if the Treasury continues to impede such initiatives, the UK’s economy may struggle to perform in the coming years.
A Call for Change
The need for a mindset revolution is clear: the UK must adopt a developmental state approach to stay competitive. Many in government, including Rachel Reeves and Patrick Vallance, acknowledge this necessity. However, the Treasury must align with these goals to facilitate meaningful progress.
Conclusion
The UK has the potential to become a sci-tech superpower, but significant changes are needed. By fostering a supportive environment for tech companies and ensuring strategic government interventions, Britain can strengthen its global presence and drive economic growth. The Treasury’s role will be pivotal in this transformation.
The UK possesses the foundational elements required to lead in science and technology.
However, substantial shifts in policy and mindset are necessary to realise this potential. The Treasury must evolve to support this vision.