Thank you to Plexal for hosting us all here today.
As a trusted partner of the government, we share a belief in innovation and that innovation is enhanced by collaboration.
The support offered here to entrepreneurs, startups and scale-ups is hugely valuable, so thank you once again for that warm welcome.
It has been nearly a full year since my department was created as the first true start-up project in Whitehall.
For the first time, the innovative science and tech start-ups that are fuelling our economy have a dedicated department, with a clear north star in the form of the Science and Technology Framework.
We are on a mission, a mission to be the powerhouse of growth.
But we were in a very different place when we look back to 2010 when we assumed office.
Still recovering from the global financial crash, venture capital investments into UK start-ups were small.
Just one tenth of what they are today – our innovators were starved of the cash they needed to scale.
And while it is unthinkable now in today’s economy, the UK had just 10 unicorns, one fifteenth of the number we have created.
In response, we didn’t just talk about being the government of business, we acted as the government of business. Supporting businesses, who of course create the growth and wealth of our nation. And by enabling them to succeed, we completely changed the game. Reinvigorating a mindset that puts growth and opportunity first/ Because we knew then, as we do now, that the value of scale-up is not only measured in pounds and pence, but for the explosion in jobs and skills in local communities that comes as a by-product.
In Rishi Sunak, we have a Prime Minister who doesn’t just share this mindset, he actually puts it into practice by personally championing rapid growth in our science and tech sector.
And this is a government that has built a pro-investment tax regime proudly on the side of British business.
Year after year, the Prime Minister has shown that he is ready to support and strengthen schemes that are vital for our science and tech ecosystem, such as Seed Enterprise Investment as well as Enterprise Investment Scheme and Venture Capital Trusts – which were recently extended by the Chancellor to 2035.
And my own department’s Spinout Review will help commercialise the astonishing quantity and of course quality of research coming out of the UK’s academic community. We’ve introduced new immigration routes including the Scale up Visa highlighting the importance that we place on backing British business to grow.
And when the sector was threatened by the Silicon Valley Bank crisis, myself, the Prime Minister and the Chancellor acted fast, working around the clock with many of you in this room, to find a solution.
And, more recently, the Mansion House Reforms announced by the Chancellor last year are set to unlock new capital for our high growth companies, benefitting pension savers in the process.
They will incentivise fast-growing firms to list in the UK as well as delivering a smarter, more flexible regulatory framework.
The LIFTS Initiative alone will generate over £1 billion in investment for our science and tech companies, as well as stimulating the Venture Capital (VC) system itself alongside the Venture Capital (VC) Fellowship Scheme that we recently announced.
These complement Lord Hill’s Listing Review, the Investment Research Review and the overhaul of the UK’s Prospectus Regime by the Treasury.
It is the very success of these policies, and the difference they actually going to make for business up and down the country, that drives me to go further.
I grew up in a family of small business owners – in fact watching my Dad’s business struggle under the weight of clumsy regulation and short-term thinking in Westminster is one of the factors that made me want to become a politician – to change things.
That is partly why I aim to be an evidence-driven politician – someone who leads by listening and is motivated by creating opportunities.
Entrepreneurs and businesses don’t need us politicians telling them what is good for them – they need us to enable them to seize the opportunities that we are creating.
It is that opportunity-focussed, entrepreneurial spirit that I think we need more of in Whitehall.
So, from Day 1 in Department for Science, Innovation and Technology (DSIT), we have been listening – and what I heard was loud and clear is that Britain’s innovation success story is built on three things: skills, scale-up and regulation to support innovation.
And it is these core priorities, already part of the Science and Tech Framework, that will be the tools to unlocking the next level of economic growth.
The right skills for the future. The right conditions for start-ups to scale-up and the right regulations to support innovation and long-term business confidence. And our plan is working.
Scale-ups, which is the subject I am focusing on today, are fuelling phenomenal results in our economy. A tech sector worth over $1trillion – by far the largest in Europe. 1.8 million people employed in start-ups right now – triple the number in 2018.
And by far the most venture capital investment into tech in Europe, by far the most investment in university spinouts in Europe and by far the most unicorns in Europe.
And of course, just over the weekend, The Sunday Times revealed a number of high-value tech companies planning IPOs on the London Stock Exchange worth billions.
But don’t be fooled by those who say it’s all about London. The Top 10 towns and cities that saw the most growth in venture capital investment were actually all outside London, with cities like Sheffield seeing nearly 600% growth and Birmingham over 1000% growth since 2019 alone.
Now the UK is delivering on its commitment to become a Science and Tech superpower by 2030 and I believe there has never been a better time to be a science and tech entrepreneur wanting to scale-up across the UK and beyond.
But the same businesses who have told us our plan is working have been absolutely clear that we cannot afford to take our foot off the gas, nor can we pretend that we don’t still have much more to do.
We do have the right ingredients to become a scale-up superpower if we tap into our unlocked potential – particularly those companies on the cusp of scaling.
Despite leading Europe, we need to make sure our future unicorns continue to make the UK their home.
When I speak to founders, many of them tell me that their ventures are still being held back by a lack of investment, that is hindering their potential to scale.
However – UK-based venture capital firms raised more money than ever in the last three years. Never before have VCs had so much dry powder stored up and ready to go.
And we have a bounty of world-leading science and technology skills and talent here in the UK.
That is why right now is not the time to change course – we’ve got to double down on our plan. Opportunity is right in front of us and we must seize it.
Now is the time to cement the UK’s reputation as the most stable, the most innovative and the most rewarding place to invest and deliver on our science and tech superpower ambitions.
Innovative businesses looking to scale-up should not have to get on a plane to get the investment they need.
This government wants to help crack open the powder-kegs of UK investment and see more homegrown scale-ups fuelled by home-grown funding.
Because if we really want to unlock that next level of funding for our extraordinary businesses, then I believe the 2030s will see the UK triple the rate at which we have created new unicorns since 2010.
I believe the UK should account for at least 50% of all new unicorns created by Europe as a whole, a true scale-up powerhouse, where opportunity and high skilled jobs fuel economic growth across the country – including outside cities.
Now my ambition is that the UK should close the gap on the US, matching its current levels of VC investment as a share of GDP, by 2030 – about £5bn per year extra.
Long-term planning, greater access to finance. That’s how government enables the scale-ups of the future.
So, when it comes to long term planning, my business-led approach forms the foundation of every single initiative.
Because no one knows what business needs better than business.
And we have got to do more than the same old ‘stakeholder engagement’ – the power of government to act as a convener in the long term must be fully utilised.
And that’s why today I am announcing the creation of a new scale-up forum. The forum will capitalise on government’s convening power to bring together leading figures from across our growing science and technology sector. From innovative tech companies and business support organisations to investors and regulators.
And it will drive meaningful change that builds on and pulls together all these ideas alongside the excellent work of the Scale Up Institute and the Business Innovation Forum. By really getting to grips with the thorny issues that entrepreneurs and investors face day in, day out from access to capital to infrastructure, skills, and regulation. And promoting investment in the sector by championing the UK’s scale-up ecosystem.
Businesses’ long-term interests will now be represented by business, for business, right at the heart of government. But that is just the start.
The scale-up forum can and will support the government to double down on its role as an enabler – especially when it comes to providing targeted support to our most promising scaleups.
While we have so many statistics about the success stories, what keeps me up at night is thinking about how many innovative start-ups are still waiting at the starting line for that cash injection to fuel their journey. Or the opportunity to access overseas markets to support their growth journey. Or the right skills to help propel these companies to the next level.
How many future Deliveroos, Pension Bees, OakNorths, BenevolentAIs are ready to scale but lack the resources, are confused by the regulatory landscape, or lack the right talent, or opportunities to access large markets to get going?
Well, I don’t intend to wait to find out. Today, I can announce that the scale-up forum will be driving a new pilot – a science and tech focussed scale-up support service.
This will provide support to 20 of the most promising science and technology businesses wanting to scaleup with targeted support from government to help them unblock the key issues that are getting in the way of their high-growth ambitions.
We will guide businesses around the obstacles and help them burst through any barrier that stops them reaching their potential. Connecting them to the best possible advice, whether that’s help with generating innovative IP, creating skilled employment, or expanding into overseas markets.
To kick start this process, I will be hosting, with the support of the British Private Equity and Venture Capital Association, a series of events designed to bring together the most promising science and technology businesses with the some of the lead investors in the UK.
The new service builds on recommendations from the Startup Coalition to improve networks for high potential businesses. And it will be designed to turn missed opportunities into seized opportunities – embodying what I want this year for my department to be all about – aspiration, opportunity, and delivery.
We must also ensure that our world-leading science and innovation sector supports British businesses to scale and grow.
So today UKRI are announcing a new declaration to businesses which sets out a commitment to support firms of all sizes to invest in the innovation they need to scale into the success stories of tomorrow.
UKRI will simplify and expand its support for innovative, growing firms across the country with InnovateUK aiming to reach a million innovators by the end of the year, and to halve the average time it takes companies to go from application to receiving grant funding. Applying a practical, proactive, pro-business approach that lifts up British talent in ways that make a tangible difference.
Long term planning isn’t just required in government of course, we need to enable aspirational start-ups to plan their long-term scale-up journeys – especially when it comes to regulatory requirements.
Regulate to innovate is not just some slogan that I happen to use – I think it is a commitment I make to businesses across the country.
And that is why I am backing the Regulatory Horizons Council report, published today, and committing to reviewing the recommendations to become unapologetically ambitious in our regulatory approach.
And that is also why this year, I will develop a regulatory support service specifically designed to help science and tech companies to navigate rules and regulations. Because we know that regulation isn’t just about dry ink on the statute books. I believe the behaviour of our regulators and regulatory simplicity is absolutely key.
No business should be daunted by regulation – our job in government is to ensure regulation provides the clarity and the certainty that businesses in complex science and tech sectors need to navigate and go forward and grow.
I want to enable businesses to get their products and services to market faster, more efficiently and without compromising on safety. Particularly where there might be no obvious pathways to do so.
I have asked my officials to be unapologetically ambitious in this agenda, working with colleagues in the Department of Business and Trade to harness the true power of tech, including the potential for large language models to play a role here, helping businesses to build a long-term roadmap for future growth. And one where open regulation leads to faster innovation.
But while cash is king, access to resources should not only be about capital. Take data for example. In many cases, data is as much a fuel for growth as capital itself.
Data driven scale-up is one of the keys to success – understanding where your mass market is, what they need and how to engage with them are vital stepping stones for any scale-up.
So, the question is, who holds that large amount of low-risk data & who decides who accesses it?
Of course, the answer as you may have guessed is the same for both questions – the government.
And since both local and national government are among the largest data holders in the country, we are sitting on a potential goldmine of useful information that could be the key to growth for so many businesses. So today, I am committing to the data-driven scale-up agenda and will be making data access a government priority this year – looking at ways of improving data access and data use in order to fuel even faster growth in scale-ups, whilst of course continuing to prioritise data privacy and data consent.
Where government can unlock opportunities to help data-driven businesses scale-up through responsible access, we will do so.
Now before I conclude, I want to add a further commitment in today’s announcements.
Following the recommendations of the excellent work by techUK last year, the start of 2024 will see my department embark on a scale-up policy sprint that will bring forward even more support for scale-ups.
There is no silver bullet that will move the UK’s success story onto the next level overnight. It requires us to layer up our policies and deploy the right support at the right time.
But I reiterate again, this scale-up sprint will not be a centralised closed-shop exercise in PR. We are going to listen to businesses and entrepreneurs, we are going to hear what more you need and are going to continue to deliver.
And the reason I am so passionate about scale-up beyond the obviously economic benefits is simple. Scale-up means new jobs. New jobs mean new skills. New skills means innovation and innovation means economic growth.
Our communities, our businesses and ultimately our country is richer with every successful scale-up.
So, let’s work together to ensure that 2024 is the year that the UK begins to solidify its place as a long-term scale-up superpower. Thank you.