Tech Nation says UK needs roadmap to help tech sector reach $4tn

UK technology scaleups have generated $583bn in value since 2014, and could further quadruple in value by 2032 under the right conditions, according to final Tech Nation report.

It said that the value since 2014 was achieved through exits of some form – whether an acquisition, special purpose acquisition company (SPAC) or public listing – and that to return the same rate of value to the ecosystem, UK tech firms should be targeting exists of $2tn over the next decade.

Published 23 March, the report explores conditions for growth created over the past decade, what tech companies can do to react to these conditions and what needs to happen to accelerate the future growth of UK tech and maintain its strength on a global stage.

Though is likely to see increasing pressure from India and emerging tech ecosystems such as Indonesia and Mexico over the next five years, Tech Nation said the UK remains the dominant European player, with investment into startups and scaleups still greater than investment into France and Germany combined.

It added that the UK could reach a $2.6tn valuation by 2031 if momentum is gathered and maintained – a number which could reach up to $4tn if better conditions for scaling can be created.

“The last decade of UK tech has been an incredible success story, one in which the UK is now third in the world for tech investment, after the US and China. But there is much more we can do and value to be unlocked if we create the right conditions for future growth over the coming years, as this report shows,” said Tech Nation CEO Gerard Grech.

“We urge ecosystem stakeholders, investors and government to continue optimising the business environment for tech businesses, from opening up new pathways for talent to  increasing sources of funding. Despite the challenging headwinds at present, I’m optimistic about the next decade and the UK’s ambition to become a science and technology powerhouse.” 

To achieve such high-valuation targets, Tech Nation recommends plugging patient capital into all stages of company growth, rather than just the early stages; rethinking talent gaps, particularly by placing an emphasis on opening up access tech sector opportunities to all people interested; and prioritising “value realisation”.

“Tech leaders in the UK must develop a Silicon Valley-like sense of exit intentionality, capital and talent must continue to be efficiently recycled through the ecosystem to create additional value, and knowledge must be deepened and shared around late stage growth,” said the report.

It added that “15x investment in deeptech and climate tech must be made by the end of the decade to stimulate and sustain growth”.

The report is expected to be Tech Nation’s last since announcing in January that it would be ceasing operations after losing its core growth programme funding to Barclays Eagle Labs.

“Despite recent blows such as the closing of Tech Nation, the UK is still the number one tech hub in Europe by some margin, and number three in the world, boasting a tech sector with a combined market value of $1tn. The work to date has been incredible,” said Yoko Spirig, co-founder and CEO of equity-focused data platform Ledgy.

“But other tech hubs like Berlin and Paris are building talent and investment capacity all the time, rapidly closing the gap, so it can’t afford to rest on its laurels. For the UK to maintain this position and continue to attract tech firms, it needs to continue creating and fostering the optimal environment for companies to come and operate here.

“It’s also essential that the organisation which carries Tech Nation’s work forward continues to take advantage of the incredible research that happens in British universities and produce exceptional tech companies to ensure the UK stays out in front as a positive example for other European markets.”