Grassroots investment crucial for UK to grow tech Unicorns
According to the British Chamber of Commerce, recent figures have shown that the UK economy is predicted to grow at a lot slower rate than expected in 2020 and 2021, and one big reasoning behind this is Brexit and the possibility of a no-deal result.
While there have been well publicised concerns around some industries, including financial services and automotive, which have already
announced job and investment cuts, the technology sector continues to go from strength to strength. Indeed, the UK’s tech industry looks set to emerge as a growth area despite Brexit as the UK cements its position as one of the leading technology innovators.
Startups Magazine spoke to Annemie Ress of innogy Innovation Hub, who explained that data from Tech Nation and Dealroom revealed that the UK is now the third most successful country globally for creating unicorn tech companies.
Ress revealed that in the past year 13 Unicorns had been created, giving the UK a total of 72. The data also revealed that the UK is now home to a third of Europe’s fastest growing tech firms.
What does this mean for technology hubs?
Ress said: “This is a huge achievement and also one that highlights the geographical focus of the world’s technology hubs. Silicon Valley, Shenzhen, Tel Aviv, London and Berlin are among the cities that have large clusters of technology startups and Unicorn tech leaders. Yet status as a hub for technology businesses isn’t something that is driven by geography or occurs through accident or evolution.”
What do tech hubs bring to the economy?
Ress explained: “Tech hubs are created and they evolve through investment in an eco-system for growth. The combinations of a pool of talented and skilled workers, a healthy financial system that supports tech companies at all stages of their growth cycle and the existence of vibrant community of likeminded businesses that mentor, champion and do business with one another is all critical.”
What is and can the Government do?
Targeted Government intervention can also help hugely, Ress explained. She said: “At London Tech Week, the UK Government announced £1.2bn of global investment in UK technology companies and targeted investments in quantum computing and the creation of additional University places for AI and data science courses to create a pool of talent for these growing sectors.
“However, while these top-down Government schemes are useful they are not enough to create a vibrant eco-system that accelerates the technology sector. The driver for that innovation needs to be the technology sector itself. What businesses need varies depending on their growth stage and business objectives. Based on the experience of the hundreds of startups we’ve mentored, invested in and accelerated through our 10+ accelerators a year for example we've found companies around Series A have a very specific set of needs that aren’t necessarily being met - around storytelling and negotiation, legal advice and curated intros to corporates and new customers to extend their client base.
“The sort of flexible and agile support required at different growth points in a corporate journey is most likely to come from the grassroots. While Governments can help accelerate high growth areas, the growth they are backing will already have gained significant momentum.”
What else is out there?
Ress explained: “It is for this reason that we have recently held our Growth Camp in London to bring promising entrepreneurs into the UK and giving them investment, mentoring and introducing them to larger, established companies to help them create a UK footprint. By identifying and fostering early stage talent we (and other PE and venture capital backers) are able to guide aspiring entrepreneurs and provide them with the finance and advice they need to get off the ground.”
What does the future hold for UK innovation?
Ress added: “When we look at the economies (the US and China) that have the most Unicorn businesses, they have invested heavily in creating eco-systems for growth and have created significant value as a result. If the UK is to continue to capitalise on its growth and position as the world’s third largest market for Unicorn businesses, then it needs to encourage investment and support within an eco-system for growth. That support cannot come from Government alone, it has to be owned and driven by the community. If it is not then it risks being too bureaucratic, too late and too distant from the grass root innovators who are spotting and building the technology platforms and services of the future.”