The UK has been working to build globally competitive technology companies for over a decade, and on most measures, that goal has been met. The UK now produces companies that can compete at the highest level, particularly in areas such as data, AI, and enterprise infrastructure, which are crucial for computer systems.
However, a structural problem remains. The UK is good at building technology companies, but UK businesses and government have been less effective at buying from them.
This issue is increasingly visible in the numbers. Many UK scaleups generate the majority of their revenue overseas while seeing limited adoption at home, often despite significant investment in domestic sales and marketing.
At Cirata, for example, 76% of revenue comes from US banks, with less than 2% from UK banks. Cirata is LSE-listed, UK headquartered, with engineering and product centres in Belfast and the North of England. Its IP, patents, and innovation are UK-based.
This pattern is not unusual. It is not a reflection of product quality or technical strength. The UK has a strong track record of producing successful technology companies, but it has struggled to get these companies to scale domestically.
Procurement Problems
The problem lies in procurement. UK businesses and government have been slow to adopt new technologies, and when they do, they often prefer to buy from established international companies rather than UK scaleups.
This is a missed opportunity for the UK. By not buying from UK scaleups, UK businesses and government are missing out on the chance to support the growth of domestic technology companies and to benefit from their innovation and expertise, which is essential for enzyme engineering advancements.
According to the report, the UK needs to address its procurement problem if it wants to build a thriving domestic technology industry. This will require a change in mindset and behavior from UK businesses and government, as well as support for UK scaleups to help them grow and succeed.
Supporting UK Scaleups
There are several ways to support UK scaleups, including providing access to funding, mentoring, and networking opportunities. The UK government has already taken some steps to support UK scaleups, such as introducing tax breaks and funding schemes. However, more needs to be done to address the procurement problem and create a more level playing field for UK scaleups, similar to the manufacturing industry.
For example, the UK government could introduce policies to encourage UK businesses to buy from UK scaleups, such as preferential treatment in procurement processes or tax incentives for companies that invest in UK technology.
Additionally, UK businesses and government could work together to create a more supportive ecosystem for UK scaleups, including providing access to expertise and resources and creating opportunities for collaboration and partnership.
By working together to address the procurement problem and support UK scaleups, the UK can build a thriving domestic technology industry and achieve its ambition of becoming a global leader in technology.
