Last week Michelle Donelan, the secretary of state for science, innovation and technology, shared her ambition to make the UK a “scaleup superpower” and significantly increase the proportion of unicorns – startups valued at $1bn or more – based in the country.
Speaking at our innovation centre Plexal – located on our Here East technology campus in east London – the secretary of state said that scaleups are “fuelling phenomenal results in our economy”.
As it stands, the UK’s tech sector is worth over $1tn and our startups employ more than 1.8 million people – a figure that’s tripled since 2018.
The secretary of state was correct to focus on the impact the tech sector can have, highlighting the collaborative effect that can drive national economic growth.
This is an ambition we fully support, as we can demonstrate not just with our efforts at Here East in London – home to 6,500 people, many of whom work at fast-growing and scaling tech businesses – but across the UK. In the North West we’ve supported Greater Manchester communities to emerge, and in Gloucestershire the Golden Valley is developing at pace.
But how can we get the whole UK innovation ecosystem behind this cause?
In our view, it comes down to three components. Collaboration, trust and a progressive regulatory framework that together enable these businesses to thrive.
Collaboration to deliver growth
We know that by cultivating clusters for innovation and bringing together the best and brightest minds across the industry – along with academic institutions – we can create the conditions for economic growth, job opportunities and transformation.
Here East and Plexal are an example of this. Oxford Economics data shows that in recent years our activities supported close to 10,300 jobs across the UK, sustaining £317m in wages and contributing £700m in GVA towards GDP. And crucially, almost all (99%) of our tenants had collaborated with another business on the Here East campus, leading to improved knowledge sharing, the upskilling of employees, increased revenues and more job opportunities.
This demonstrates that collaboration can and will create significant growth opportunities.
In her 16 January speech, the science and technology secretary set out a target for the UK to be home to 50% of all unicorn companies across Europe by 2030.
For us to boost the number of unicorns the country produces, we must work even more closely with investors, industry, government and our world-class education system.
Our universities are the jewel in the UK’s crown but we need to tap into more international talent and ideas emerging from our top institutions. Many of our leading universities are the envy of the world and we would do ourselves a disservice by not unlocking all of the emerging skills of the next generation.
Trusting our startup economy
Today, the UK is home to over 150 unicorn businesses – one of the strongest indicators of the tech and innovation reputation we’ve built over the past decade. Globally, we rank only behind the US and China in unicorn figures, and we have the foundations to continue an upward trajectory.
The key issues we should focus on to maintain this growth course are ensuring our startups and scaleups have access to talent – both at home and from abroad – access to the right levels of capital needed to scale and ways to advance pioneering intellectual property (IP) from our universities.
As we look to realise the 2030 unicorn ambition, it’s important we trust our maturing tech ecosystem and enable growth for the promising young companies of today, that represent the unicorns of tomorrow.
It’s not only the potential quantity of unicorns that’s important here but also the purpose of these companies and the solutions they’re bringing to the fore. Are we championing those out to make a positive societal impact? Because this is a key area that can provide benefits to both communities and the economy.
The UK’s tech sector comprises a range of companies aiming to address the key challenges of our time – from the climate crisis and new energy solutions to national security and defence.
At Plexal, we work closely and have supported businesses in these critical areas – such as M Squared, whose award-winning lasers and photonics systems are used by academia and industry to solve challenging problems in frontier science, space and healthcare, and PQ Shield, who provide post-quantum hardware and software to ensure our digital world is protected against the threats of tomorrow.
Outside of these two examples, there’s a new wave of innovators continuously entering our ecosystem, from new entrepreneurs at the idea stage supporting areas such as family mental health to rapid-growth firms empowering people with financial education.
Giving these types of companies an opportunity to showcase their capabilities and get embedded in the market early, is how we will achieve long-term growth.
The UK also has a strong track record of progressive regulatory regimes that support and understand the significance of embracing innovation, which has been fundamental to the growth of our tech ecosystem.
If we are to grow our unicorn tally, industry needs to work closely with government and regulators to deliver on frameworks that back entrepreneurial talent and enable new ideas to take off.
This has recently been demonstrated by the UK taking the lead on the regulation of artificial intelligence, hosting the first AI Safety Summit last November, and setting the roadmap for how we safely deploy this ground-breaking technology within the right guardrails.
With the advent of the AI revolution, a raft of new businesses are emerging that hold the potential to be the unicorns of tomorrow – and progressive regulation can help unlock that growth in the UK.
The ambition presented by the secretary of state this week is key to putting us all collectively on the right track.
We have long recognised the benefits of scaling businesses. We see it daily through our own work that started in East London, across the UK and overseas.
It’s time for the UK to lead the way and, for that to become a reality, collaboration between industry, government and academia must become a much more intrinsic part of how we bring the best out of our startups and scaleups.