The former CEO of British chip design firm Arm, Warren East, recently highlighted the challenges faced by the U.K. in commercializing technology businesses globally. According to East, lackluster growth and poor rates of GDP per head in the U.K. are considered a national embarrassment. He pointed out that many successful firms in Britain tend to either relocate outside the country or list abroad, particularly in the U.S., due to difficulties in achieving global relevance from the U.K. While the U.K. has a lot to offer in terms of innovative technology, it struggles to realize as many global businesses as its potential would suggest.
East emphasized the importance of getting commercialization right in the U.K. He noted that while a significant amount of innovation is created in the country, it often ends up being exported and exploited elsewhere in the world. This phenomenon has been a common story of British-made products that do not reach their full global potential. East acknowledged that there is no easy solution to this issue, but he suggested that the U.K. should promote more risk appetite to support high-growth tech firms. He also highlighted the fact that investor risk appetite in the U.S. is higher than in the U.K., leading to deeper pools of capital in the former.
Encouraging Innovation and Investment
East mentioned the efforts of the British entrepreneurial community and venture capitalists to push for changes in capital market rules that would allow more investments from pension funds into startups. This, in turn, could stimulate risk appetite within the U.K. He expressed optimism that there would be more initiatives in this direction in the coming years. However, he cautioned that businesses cannot rely solely on regulatory changes and must actively seek opportunities for growth and expansion.
Arm, a prominent British chip design firm, notably listed on the Nasdaq in the U.S. last year, despite being a major player in the global technology industry. This move came as a disappointment to U.K. officials and the London Stock Exchange, as they aimed to attract more tech debuts in Britain. The fact that Arm remains majority-owned by Japanese tech giant SoftBank also raised questions about the U.K.’s ability to retain successful tech companies within its borders.
The U.K. faces significant challenges in commercializing technology businesses on a global scale. While there is a wealth of innovation and talent in the country, there is a gap in translating these resources into successful global enterprises. The need for a shift in mindset among investors and stakeholders is crucial to address these issues and enable the U.K. to compete effectively on the world stage in the tech industry.