Is Tech UK Closing for Business?
The UK built a powerful, cutting-edge tech sector, with the most successful tech start-up ecosystem in Europe. It now risks blowing up this hard-won success.
At my last startup, we employed 12 engineers, including two Poles, a Bulgarian, a Romanian, an Italian, and a Greek. Only two were native Brits. The Europeans came to the UK, signed up at recruitment agencies, and landed jobs. The famous university town Cambridge attracted the best brains. It was straightforward.
Today, Europeans no longer feel welcome. The Home Office is notorious for making it hard to obtain visas — and this is just one way my government risks killing the UK’s successful tech sector. It has so far failed to come up with a coherent semiconductor strategy while embarking on a misguided regulatory offensive against Big Tech.
Not long ago, the UK stood strong as a tech leader. I started my career in the 1980s at a startup called Inmos. ST Microelectronics acquired Inmos and I moved to France. That was terrific. French engineers learned from us and we learned from them. When I returned to the UK, I became involved with startups, including one called Alphamosaic. We developed the first mobile video chip for the first video iPod. Broadcom acquired us.
Access to capital and people fueled UK innovation. We built a strong venture capital and angel network. In 2021, the UK gave birth to 115 tech unicorns (start-ups that grow to a $1 billion valuation), more than France and Germany combined.
Cambridge, where I have been based, is Europe’s most innovative city. It has spawned 20 companies that have passed the $1 billion landmark valuation – most notably the chip designer Arm, whose designs are found in almost every cellphone. Semiconductor companies such as Qualcomm and Mediatek license them. Taiwan Semiconductor Manufacturing Company (TSMC) manufacture them and household brands such as Apple and Samsung integrate them into their products.
It’s sad for me to learn that ARM now has filed to sell its shares in the US, not in the UK. Arm’s decision shows that the UK is not doing enough to attract tech stock offerings. That’s not good. We are allowing a strategic national asset, a key component of the global semiconductor supply chain, to come under the control of a US regulator. ARM, the greatest British tech success story of all, has decided that the British government and regulators are making the wrong decisions. What kind of message does that send to the rest of the tech community?
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At the same time, the UK is bashing Big Tech, establishing a new, powerful regulator with the mission of policing technology platforms. Already, our antitrust authorities have blocked Microsoft’s purchase of software game developer Activision — for the bizarre reason that the deal threatened choice in the cloud gaming market. Who cares? Investors need to know that they can sell out and that they have an exit route. Otherwise, they won’t invest.
Another worry is the continued delay in producing a national semiconductor strategy. Semiconductor executives and venture capitalists recently sent a four-point open letter to the Prime Minister. They call for the government to make it easier for tech talent to move and work in the UK and to make it easier for UK companies that receive public aid to partner with EU and US strategic allies.
We should aim to achieve tech sovereignty, as espoused by the visionary entrepreneur and investor Helmut Hauser. This means making a choice. Only North America, China, and Europe can be tech sovereign. The UK is just too small. We must choose our side. China is out. That leaves North America and Europe.
Our best bet is our biggest trading partner and neighbor, the European Union. We need to reopen our borders for European scientists. We need to rejoin the European science program Horizon — every British scientist will tell you that our departure has been tragic. And we need to remove the barriers to importing and exporting components. Before Brexit, it took a day to get a spare part for a Fiat car. Today, it takes three weeks. That’s unacceptable in a modern economy.
Germany and France are building new semiconductor foundries. The UK needs access to them. Our strength is in research and development, not production. It makes sense to work together. We must navigate our way out of the “escape room” that UK politicians and regulators have led us into — before the best brains and tech investment drain away to other countries.
Christopher Cytera CEng MIET is a Non-Resident Senior Fellow with the Digital Innovation Initiative at the Center for European Policy Analysis. He is a technology business executive with over 30 years of experience in semiconductors, electronics, communications, video, and imaging.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.
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CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy.