The UK’s failure to retain and scale science and technology companies has now reached a ‘crisis point’, warns a new report from the House of Lords science and technology committee.
The report says that the UK has seen ‘a procession of promising science and technology companies moving overseas’, including quantum computing innovator Oxford Ionics in June, which was bought for $1 billion (£770 million) by a US company, and transplantation tech company OrganOx, an Oxford spin-out sold to a Japanese concern for $1.5 billion in August. It adds that without ‘urgent and radical reform’, it may soon be too late to fix long-standing failures to scale, retain the economic benefits of research and development, and seize opportunities for technological and economic growth.
Among its recommendations are reforms to counter-productive visa policies for global talent to encourage talented scientists and entrepreneurs to move to the UK. It also urges the government to press on with implementation of the Mansion House reforms – an initiative to unlock pension capital for high-growth businesses and improve investment returns for savers.
A key recommendation is for the establishment of a National Council for Science, Technology and Growth to help drive through reforms supporting science and technology growth and the scale-up of UK companies. The report, which was advised by a variety of expert witnesses, including the Royal Society of Chemistry and UK Research and Innovation, also suggests that public investment bodies, such as Innovate UK, the British Business Bank and the National Wealth Fund, should work more closely together, or even be consolidated into a single body to be able to compete with overseas sovereign wealth funds.
The report also recommends reforms to public procurement, including mandating a percentage of government departments’ budgets that must be spent with innovative UK-based SMEs. And it suggests that career structures, pay and incentives must change to allow easier movement between academia, business and government, to enable each sector to have access to the skills and networks of others.
Finally, it says the UK should not take its research base in universities ‘for granted’ and that this was now ‘under threat’ due to the current higher education funding crisis. It says the UK government must resolve this crisis ‘before it’s too late’, rather than proposing ‘counter-productive’ actions like a levy on international students.
‘The UK has experienced sluggish productivity growth and near-flat real wages since the global financial crisis,’ says Robert Mair, chair of the committee. ‘Its inability to retain more of the economic benefits of its science and technology R&D endeavour is a fatal flaw in any growth strategy.’
‘We have witnessed a procession of promising science and technology companies choosing to scale overseas rather than in the UK. Even during our inquiry, several significant companies including Oxford Ionics, Deliveroo and Wise have relocated or expanded abroad, and even life sciences stalwarts like AstraZeneca are eyeing the exit.’
‘The UK economy is simply not working, and the consequences are clear for all to see,’ Mair added. ‘If the UK is to arrest its decline, leadership and coordinated action is needed to rescue and strengthen its science and technology sector.’
In the industrial strategy published last year, the UK government laid out overarching targets for the UK to become the third-best place in the world to scale up a technology business, and to achieve the first $1-trillion tech company in the UK by 2035. The report acknowledges that while these are ‘worthy ambitions’ the UK is currently ‘sliding in the opposite direction’.
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