Britain is brimming with innovation. From Cambridge’s ARM to Oxford’s vaccine breakthroughs, we’ve proven time and again that ideas are not our problem. But too often, just as the engines ignite, the runway ends. We excel at take-off, but falter at altitude.
The recent €1.3bn investment round for Mistral AI – led by ASML a Dutch semiconductor giant – shows how European corporates are stepping up to back strategic tech. It’s not just about returns; it’s about sovereignty.
AI is fast becoming essential to economic and geopolitical resilience. If the UK wants to remain competitive, it must ensure its most promising tech companies can scale and succeed at home – with domestic capital behind them.
That’s where institutional capital comes in. Right now, UK pension funds currently allocate just 0.007% of their assets to venture capital. By comparison, in North America that figure ranges from 0.5% to 2%.
This isn’t just a missed opportunity for returns; it’s a strategic vulnerability.
Britain has one of the largest savings industries in the world, with pension assets per capita around seven times the global average. Yet our savers are long-term investors, locked into low-return, short-term assets. The opportunity cost is enormous.
Unlocking even a fraction of this capital, safely and profitably, could be transformative.
This is not a call for mandates, it is a call for clarity. If the Pension Regulator sets a transparent return objective for long-term savings products, trustees can choose the tools, venture capital then becomes a fiduciary choice, not a political instruction.
The risk is manageable; for any single scheme, a 0.5% allocation is well within normal tolerance thresholds, and it would send an important signal of confidence for founders deciding where to set up, hire, and list.
A shift from 0.007% to just 0.5% would be a 70-fold vote of confidence in UK innovation and rocket fuel for our growth engine.
We must also become customers of our own brilliance. If your bank needs cybersecurity, pilot British deep tech first, if your asset manager seeks ESG analytics, test the AI built in Edinburgh before importing off-the-shelf solutions.
Procurement choices matter – they shape demand, validate innovation, and anchor value locally.
Every successful scaleup sparks a chain reaction: high-skilled jobs, resilient supply chains, national security, and wealth that recycles into the next wave.
Success compounds. Like The Beatles travelling from From the Cavern Club to Candlestick Park, let’s help our entrepreneurs go global, and stay rooted.
The UK has the talent, the ideas, and the ambition. What we need now is the capital and the courage to scale what we start.
If capital, talent, and policy move in sync, Britain can be the place where responsible technology meets responsible finance.
Let’s strengthen the ladder, fuel the flywheel, and prove that when the United Kingdom backs its innovators, we succeed together.
The post Unlocking UK tech’s scaleup potential appeared first on UKTN.
