The real test of the UK innovation system is not how many companies we start. It is how many world-class companies we enable to stay, scale, succeed and lead global value chains. That was the main takeaway for Real Wireless’ Managing Consultant Costa Tsourkas, following the recent techUK Innovation Summit.
The UK has world-class universities, strong research clusters and a substantial venture-capital ecosystem, but, as the summit discussions highlighted, translating invention into commercially sustainable, globally scaled businesses remains a significant challenge.
The discussions highlighted the barriers companies can face at every stage, from developing prototypes and navigating regulation to securing investment, entering production, winning customers, expanding internationally and potentially preparing for an IPO.
There were encouraging signs. Gary Cutts, Executive Director for Digital and Technologies at Innovate UK, discussed the importance of supporting innovation beyond its earliest stages. The summit also placed patient capital, government support and the wider challenge of capturing more value from UK innovation firmly on the agenda.
Public procurement could be one of the most powerful levers. An early government customer can help validate an emerging technology, demonstrate demand and give a company greater commercial credibility with customers and investors. This can matter particularly in capital-intensive deep tech, where the journey from breakthrough to sustainable revenues can be long.
But if we become better at creating investment-ready technology companies without developing sufficiently sophisticated specialist private capital to support their growth, are we building future global champions or simply creating a more attractive pipeline for overseas acquisition?
International investment is, of course, essential to scaling technology businesses, alongside access to global talent, customers and supply chains. Where companies retain their headquarters and strategic capabilities also matters.
Arm offers a useful example. Its global headquarters remain in Cambridge, despite its international operations, ownership by SoftBank and Nasdaq listing. Arm also continues to generate intellectual property from the UK.
Another example is DeepMind, founded in 2010 and subsequently became part of Google. Today, Google DeepMind maintains significant scientific capability in the UK and has announced that its first automated science laboratory will be established here.
These are different corporate journeys, but both illustrate the value of retaining technical, strategic and commercial capabilities in the UK. Over time, this helps build the specialist expertise and knowledge that support a wider innovation ecosystem.
Ownership is therefore only part of the picture. Where companies develop intellectual property, retain skilled people, make strategic decisions and generate economic activity is equally important.
This resonates with our work at Real Wireless, where we see these challenges from several perspectives. We support innovators exploring the commercial potential of advanced connectivity technologies, help investors undertake technical and market due diligence, advise public-sector organisations on connectivity investments and business cases, and work with government and regulators on innovation policy and market development.
Our experience reinforces the importance of looking beyond the initial commercialisation of a technology to the longer-term conditions needed for businesses to scale. Supporting businesses through these later stages should be central to the UK’s ambition for its technology sector.
We should be aiming to build companies in the UK that can attract specialist investment, compete internationally and develop into major global businesses. That means creating the conditions for more companies to continue growing independently, potentially accessing public markets through an IPO, rather than seeing an early trade sale as their only realistic option.
The ambition should be choice. Acquisition can be an excellent outcome for founders, investors and companies, and international capital is integral to a successful innovation ecosystem. Allowing more UK companies to remain independent and scale globally would also help strengthen the country’s technology and industrial capabilities, while creating the expertise and investment networks needed to support future generations of businesses.
Perhaps that is the more meaningful measure of a successful innovation economy: not simply how many innovations or start-ups it produces, but whether each generation of successful companies helps create the conditions for the next.
