A report by The Blair Institute (TBI) has revealed that fewer than 1% of UK firms are reaching the scale-up stage, prompting calls for ‘end-to-end’ reform.
The From Start-up to Scale-Up: Turning UK Innovation into Prosperity and Power report outlines that Britain has was it takes to lead tech industries of the future, but must act fast to unlock its scale up opportunity before global rivals pull ahead.
In the US, companies attract approximately nine times more capital at later stages, while UK companies attract only one-third of their funding from domestic investors at scale up stage.
Despite boasting a strong research base and vibrant start-up scene, the UK is failing to grow tech firms at scale according to the report – costing the country jobs, tax revenue, and sovereign control over frontier technologies.
The paper argues that the failure to scale has become a critical weakness in the UK’s growth model, holding back both national prosperity and strategic influence.
The institute proposes an overhaul to rectify this scaling issue, including expanding the Global Talent Visa, fixing spinout terms, retargeting tax reliefs, unlocking pension capital and leveraging public investment bodies.
Amadeus Capital chief executive and non-executive director of the Bank of England, Anne Glover, calls for “end-to-end reform”, saying the UK “consistently fails” to grow innovative start-ups into global leaders.
The report claims that recent cuts to US research funding and shifts in global capital have created a rare opening for the UK to attract talent and anchor firms.
TBI’s director of science and technology policy, Jakob Mökander, said: “The UK has a rare opportunity to become the world’s most stable and credible home for scaling global companies.
“Talent and capital are moving, and countries that can scale firms will secure the jobs, investment and influence that follow.
“Britain must act now to back its best companies through growth and keep the economic gains of innovation at home.”
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