Tony Blair Institute Calls for Reform to Keep UK Tech Innovators at Home

The Tony Blair Institute has cautioned that unless the UK reforms its support for high-growth businesses, it risks becoming merely a “launchpad” for global tech giants, rather than fostering them as long-term residents.

Despite the UK’s robust research and innovation landscape, the nation “consistently fails” to transform promising start-ups into significant global entities.

The inability of UK firms to mature effectively has led to a drain of talent and investment toward competing markets like the United States, China, and the European Union, the think tank observed.

Interestingly, the Tony Blair Institute pointed out that recent reductions in US federal research funding might create “a rare opportunity for the UK” to draw in international talent.

Jakob Mökander, the Director of Science and Technology Policy at the institute, emphasized the urgency of taking action: “Britain must act now to support its best companies through their growth phases and ensure that the economic benefits of innovation remain domestic.”

The report indicated that UK businesses lag behind their global counterparts due to slow investment channels, rigid visa regulations, and a culture that tends to be risk-averse.

It recommended a reevaluation of visa eligibility criteria to better align with the demands of emerging fields such as quantum computing, biotechnology, autonomous vehicles, and advanced materials.

This warning adds to the ongoing concerns about high-growth technology firms opting for public listings outside of the UK to secure better valuations and more capital.

Last week, Wise, a financial technology firm, announced its decision to relocate its primary listing from London to New York.

Wayve’s CEO, Alex Kendall, representing one of the UK’s most valuable driverless car businesses, stated that the US “is by far the strongest place for technology companies to go public,” although he did not disclose any plans regarding Wayve’s potential listing.

In February, the House of Lords communications and digital committee warned that the UK could become an “incubator economy” unless it enhances support for domestic AI and creative technology start-ups.

Furthermore, the Tony Blair Institute pointed out that UK firms encounter considerable difficulties in capital-raising as they expand. Early-stage US companies secure 3.7 times more capital than their UK counterparts, and this disparity grows to over nine times in later stages.

“The issue is not a shortage of funds,” stated Anne Glover, CEO of Amadeus Capital Partners. She noted that UK pension funds manage over £3 trillion, yet invest only a small fraction in growing local businesses.

The Labour party is contemplating pension reforms that may potentially include requirements for investments in the UK venture capital sector.