Funding

£20M fund backs UK addiction treatment tech
£20M fund backs UK addiction treatment tech

Innovators across the UK are being offered £20 million of government funding to develop cutting-edge…

When global labour market data is released, headlines tend to fixate on a single metric: unemployment. This year is no different. According to the latest figures from the United Nations and the International Labour Organisation, global unemployment remains relatively stable at just under five per cent. At face value, this suggests a labour market that is holding firm despite economic uncertainty, geopolitical instability and technological upheaval. In reality, it masks a serious and underreported problem: the true global jobs crisis is not a lack of work, but the growing scale of informal work. More than 2.1 billion people worldwide are employed in the informal economy, including misclassified workers operating outside effective regulatory coverage, where employment is typically unregistered, contracts are absent or unenforced, and access to labour rights and social protections is limited or non-existent. That represents a large portion of the global workforce. If unemployment reveals how many people cannot find work, informality shows how many are working without protection or long-term opportunity. Informal work is often associated with developing economies or unregulated sectors. However, this form of work is increasingly occurring within developed economies and regulated sectors, hidden within otherwise legitimate, fast-growing small and medium-sized enterprises – and this is often unintentional. For both businesses operating solely in domestic markets and those that have expanded abroad, adopting new workforce models and attempting to respond to rapid technological change, the crisis of informality is emerging in three key areas. The first is worker misclassification. Individuals are engaged as independent contractors but operate in practice like employees – working fulltime, at set hours, for years at a time. This is particularly prevalent in gig and platform-based roles, where algorithms determine pay, hours and performance without considering employment rights. Gig and platform work often presents as flexible and empowering, however, in practice, many platforms exercise employer-like control over payment, performance management, hours, and length of engagement, while explicitly avoiding employer obligations such as tax filings and the provision of statutory benefits like annual leave and healthcare. The result is a growing cohort of workers who fall between legal categories, carrying the risks of self-employment without the autonomy or protections that should accompany this mode of work. The second area is cross-border remote work, where informality can inadvertently arise. With post-COVID remote working models here to stay, companies are directly hiring overseas talent, assuming that because the worker is not based in the company’s home country, local employment laws do not apply. Where employment is not properly registered (whether by the employer and/or employee), local labour law is not applied, or social security obligations are misunderstood or ignored, these arrangements can slip into a form of modern informality, even where the relationship appears to be formal on the surface. This is often the point at which organisations begin to seek external guidance. In many cases, neither party fully understands the legal implications of the arrangement, which leaves both employer and worker exposed. We frequently see organisations approach us when a specific issue surfaces, such as payroll inconsistencies, questions around benefits entitlement, or concerns raised by the workers themselves, including registration process failures. Business leaders should also be aware that permanent establishment risk can arise if a remote employee is deemed to represent the company locally, which can trigger corporate tax obligations. Social security errors can happen when contributions are not made correctly in either jurisdiction, leaving workers without coverage and employers facing backdated liabilities. Meanwhile, employment law conflicts can emerge when contracts fail to meet the requirements of the host country regarding notice periods, benefits or termination rights. The third driver of informality is structural. These arrangements are becoming more common as artificial intelligence and evolving workforce models outpace regulation. Businesses are innovating at speed, but legal frameworks are struggling to keep pace. The UK’s Employment Rights Act offers a clear case study of the direction of travel. Worker protections are expanding, classification rules are tightening and enforcement is becoming more coordinated across agencies. Informal arrangements that once sat in legal grey areas are moving firmly into view and what was previously tolerated is falling under scrutiny. The challenge is that informality is rarely a deliberate choice. For many growing organisations, it becomes the default because compliant pathways are complicated and difficult to navigate alone, particularly across multiple jurisdictions. Legal advice, payroll, tax, HR, and immigration compliance are often siloed, leaving gaps that businesses may not even realise exist until a problem arises. For instance, digital nomad visas are often viewed as providing holders with wholly compliant right to work status, however employers may not realise that this is not always the case and contracts may not reflect the correct legal status or entitlements. Addressing informality requires a change in how we think about employment at a global level and recognising that flexibility and compliance are not mutually exclusive. Businesses need models that allow them to access global talent quickly while ensuring workers are properly employed and protected under local law. As attention remains fixed on unemployment figures, informality continues to expand beneath the surface. It is this hidden cohort of workers, contributing economically without security or rights, that represents the real crisis in the global labour market. Solving it will require coordinated action from policymakers and businesses alike, and a commitment to building workforce models that are not only innovative, but sustainable and fair.
Neupulse raises £3 million for delivery of neurotherapeutic technology

Neupulse, a neurotherapeutics company focused on delivering innovative solutions to people with brain health conditions,…

The Compression Company raises $3.4M to unlock the 98% of satellite data
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Satellites are capturing more Earth observation data than ever, but limited bandwidth means only a…

Electric Twin raises $14M to bring synthetic audiences to life
Electric Twin raises $14M to bring synthetic audiences to life

Electric Twin, an AI platform building synthetic audiences that accurately model how people think and…

Orthofuse secures £2.2M seed to redefine safety in orthopaedic surgery
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Orthofuse, an orthopaedic medtech company focused on delivering safer and more efficient surgical procedures, has…

Government and Private Sector collaborate to increase access to scaleup investment
Government and Private Sector collaborate to increase access to scaleup investment

Fewer than 500 UK companies raised a Series A round (£2-10m) in 2025, and only…

Deep Space Energy secures €930K to generate electricity on the moon
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Anthropic investor fuels $75M Series B for UK energy scaleup
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tem, the energy transactions scaleup, has raised $75 million in an oversubscribed Series B round.…

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The path to a stronger economy through financial inclusion

The UK economy is at a critical juncture. And with senior Labour backbenchers now calling…

Chiral raises $12M to unlock post-silicon computing
Chiral raises $12M to unlock post-silicon computing

Chiral, a Swiss nanotechnology company pioneering next-generation semiconductor and quantum technologies with nanomaterials, announced the…

Wealthtech startup Sidekick raises £7.8M
Wealthtech startup Sidekick raises £7.8M

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Litestream Ventures saw $78m in non-binding investor pledges
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Litestream Ventures, an investment platform convening investors, founders, and philanthropic partners, hosted its fourth annual…

Scoro acquires Envoice to streamline real-time profitability tracking
Scoro acquires Envoice to streamline real-time profitability tracking

Scoro, Europe’s professional services automation platform announces the acquisition of Envoice, a category in AI-driven…

Spacetech funding hit new heights in 2025
Spacetech funding hit new heights in 2025

The spacetech industry is going from strength to strength, and spacetech funding has hit new…

refugee entrepreneur
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2150 closes second fund, reaching €500m in assets
2150 closes second fund, reaching €500m in assets

Venture firm 2150 announced the final close of its €210 million second fund, bringing total…

Europe’s Series B funding gap is widening at an alarming rate
Europe’s Series B funding gap is widening at an alarming rate

World Fund has released a timely report that highlights the extent and damaging impact of…

BGF reports strong deal activity and landmark exits in 2025
BGF reports strong deal activity and landmark exits in 2025

BGF, the UK and Ireland’s most active growth capital investor, reported a strong year of…

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How to get into Y Combinator

If any startup incubator has instant name recognition, it’s Y Combinator. This makes it a…

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