There is nothing a politician likes more than a mantra – a phrase that can be repeated over and over until, possibly, the thought becomes reality.
And one of the most recent mantras to roll off the tongues of British government ministers is ‘scientific superpower’. It’s been a while. In 2021, former prime minister Boris Johnson said his government’s aim was to restore Britain’s status as a science superpower. More recently – late 2023, to be exact – Chancellor of the Exchequer Jeremy Hunt told MPs that his aim was to ensure the UK could compete with Silicon Valley. This year, the Prime Minister reorganized the government apparatus and established a Ministry of Science, Innovation and Technology. Naturally, startups and scaleups are expected to play a vital role in the flourishing of commercially exploitable science.
So how skeptical should we be? It’s tempting to think of the science superpower agenda as a kind of figurehead for a government at a time when the wider economy isn’t looking particularly healthy.
That would be overly cynical. For one thing, the UK tech sector is performing quite well. It continues to attract high levels of foreign and domestic VC cash. In the first half of 2022, £14.7.7 billion of VC capital flows into Britain. And although investment fell sharply to £8bn between July and December, the UK tech sector is still a magnet for capital. Perhaps most importantly, it is economically important for the UK to ensure that it does not fall behind in the commercial development of key technologies. So no one should argue with ambition.
But as Science Secretary George Freeman has admitted, Britain is not yet a science superpower but rather – in his words – a “science power”. Acquiring the former status would entail becoming an ‘innovation nation’. Essentially what he meant was the creation of an environment in which scientific research could be successfully industrialized.
How can this be achieved? I spoke to two scale CEOs at the heart of the science and technology sector to get their take on the measures needed to support their industries.
Scott White is CEO of Pragmatic Semiconductor. Founded twelve years ago, it has developed a microchip technology that does not require silicon. Today, it produces low-cost and flexible chips that can be used in multiple environments. Its business model revolves around manufacturing – with a facility in the North East of England – but it also plans to offer compact production equipment to customers. In addition, it designs its own RFID chips to track goods in transit.
Pragmatic just commissioned a survey of 250 tech business leaders. When asked if the government could achieve its goal of being a science superpower by 2030, a healthy 68 percent said yes, but only 40 percent believed enough government support was being offered.
As White sees it, the UK’s cash-rich ecosystem remains unbalanced, with much of the funding going to early-stage businesses, rather than scale. Most of the capital invested in later stages comes from abroad. “We did a Series C in 2021, 2022 — that was for $125 million. Eighty per cent of the investment came from outside the UK,” he says.
So in that regard, there is a need for capital that will allow technology businesses to remain in the UK both in terms of location and control as they grow.
But what can the government really do? Well, one way forward is to make it easier for institutions to invest. White welcomes changes to insurance industry regulation that will allow pension funds to put money into technology.
It also recognizes the progress made in providing public funding through the British Business Bank and its business arm, British Patient Capital. As well as investing alongside VCs, the organization has created the Future Fund: Breakthrough, with £375m earmarked for deep tech ventures. “That’s good, but the scale needs to be much bigger,” says White.
Mostafa ElSayed agrees. He is the CEO and co-founder of Automata, a company that provides automation technology for laboratories, primarily in the life sciences sector. The company’s products are designed to speed up processes such as diagnostics and clinical trials while reducing human error. He argues that some sectors are better served than others when capital is allocated by VCs, with deep tech being in particular trouble. “We all talk about the importance of deep technology, but accessing funding in deep technology is difficult.”
And the UK may be falling behind its European competitors. “The biggest supporter of deep technology is BPIFrance (a sovereign wealth fund), then Germany, then Scandinavia,” says ElSayed.
ElSayed says change may be coming. He cites comments from the new head of the British Business Bank, who recently floated the idea of creating a government growth fund to support innovation.
Relatively small changes could also bring benefits. White points to existing schemes such as the Enterprise Investment Scheme (EIS) and Venture Capital Trusts. By offering tax breaks to backers of eligible companies, these vehicles have encouraged investors to back startups. However, once companies reach a certain size, the tax breaks are reduced, meaning that the programs do not benefit from scaling up.
It’s not all about money. “There is also a need to support domestic demand,” says White. “For example, you can use government procurement to promote adoption.”
Indeed, in some areas, government has enormous power to make things happen. ElSayed uses the example of clinical trials. The UK has an extremely important resource in the form of a National Health Service which serves more or less the entire population and can collect data accordingly. Potentially, this makes Britain one of the best countries in the world to conduct clinical trials. However, although a national service, much of the decision-making takes place at the level of local health trusts. “There needs to be a national strategy,” says ElSayed. There is a precedent in that Britain already has a national strategy for genomics research.
Another important piece of the puzzle is the visa policy. ElSayed stresses the need for a regime that allows science-based businesses to hire quickly. “When a company moves at our pace, you struggle to find people who have the right to work in the UK,” he says.
Scott White says Britain has the potential to become a science superpower, but clarity is needed on what that actually means. When it comes to government support, the pieces of the jigsaw are not all in place.