The former CEO of British chip design firm Arm, Warren East, recently spoke out about the challenges the U.K. faces in commercializing technology businesses on a global scale. He highlighted the fact that many successful firms in the U.K. tend to either move their operations abroad or list on stock exchanges in other countries, such as the U.S. East expressed his concern that the U.K. is missing out on the opportunity to create and grow more global businesses, despite having a strong foundation of innovative technology.
According to East, there is a need for a significant mindset shift within the investor community in the U.K. in order to better support high-growth tech firms. He emphasized the importance of encouraging more risk appetite among investors to help businesses scale up effectively. East pointed out that while there is plenty of innovation happening in the U.K., much of it ends up being commercialized and utilized in other countries, rather than benefiting the U.K. economy.
East acknowledged that there is no easy solution to the issue of commercializing technology businesses in the U.K., but he suggested that one way to address the problem is to create an environment that supports more risk-taking and investment in high-growth firms. He highlighted the need for changes to capital market rules in order to attract more investment from sources such as pension funds. East expressed optimism that there would be progress in this area in the coming years, but he also stressed that businesses cannot afford to wait for regulatory changes and must take action independently.
East referenced the decision by Arm, whose chip architectures are used in a vast majority of the world’s smartphone processors, to list on the Nasdaq in the U.S. last year. This move was seen as a significant setback for the U.K., as it was hoped that more tech companies would choose to debut on the London Stock Exchange. However, Arm remains majority-owned by the Japanese tech giant SoftBank, highlighting the complex global nature of technology business ownership and operations.
The challenges of commercializing technology businesses in the U.K. are significant, but not insurmountable. It is clear that there is a need for increased support and investment from the investor community, as well as a shift in mindset to prioritize risk-taking and scale-up opportunities. By addressing these issues and creating a more conducive environment for tech innovation and growth, the U.K. can improve its standing on the world stage and create more successful global businesses in the future.