Michael Moore’s Outlook on the UK’s drive on tech

Time was when a new telly was the test of how tech literate you were. The generational divide could be pinpointed precisely by identifying who could tell their Ceefax from their Teletext, a VHS player from a Betamax or a cathode ray TV from an LCD set.

For years I was the one in the family to whom the remote control was thrown to fix things. But I have now reached the moment where I pass it to my kids – as TV guides become an irrelevance in this streaming age, and the idea of watching something ‘live’ has become anachronistic (unless you are talking about sport), it is a very different world.

This sense of things passing me by was heightened during London Tech Week at the Queen Elizabeth II centre when I wandered past a stand promoting ‘virtual reality shoes’. I had an uncomfortable flashback to a journey on the Tube a few years ago. In the carriage I read an advertisement which said: “Deliveroo – when your food tastes so good you forget to Instagram it”. Just as I had felt back then, in the exhibition hall I now didn’t know where to start.

Happily, elsewhere in the conference centre, there was no shortage of things to distract me and to marvel at – the sheer scale of the main event (and the countless others that the week spawned), the global tech diaspora flocking to the capital for a few days, and the roster of politicians setting out their stalls. And of course the keen interest of assembled investors from the UK and elsewhere.

Our recent UK tech investment story has been impressive. New analysis we have produced at the BVCA highlights how technology businesses attracted nearly £13 billion of private investment in 2022 from private equity and venture capital.

While there was a broader-based decline in overall private capital investment in the UK last year (although still competitive with 2020), tech investment was up by 15%. And that followed the previous year’s record high in this particular sector.

Put another way, tech received nearly half of the UK private capital industry’s investment in 2022. This sense of momentum was reinforced by data from London & Partners which showed that the city had been the number one location for global tech investment over the past decade. That is a pretty competitive league to lead.

The attractiveness of the UK, and its tech credibility across the world, had been evident to me earlier in the year when I was in the USA. Private capital firms making a pitch on UK tech opportunities to institutional investors in Boston, New York, Chicago and San Francisco takes a certain self-confidence (matched by appropriate levels of British charm and self deprecation…). But everyone had a good hearing. And while the world of venture capital was well represented on the mission, mid market and large cap private equity were very much part of the mix, too.

The seriousness of our effort was underlined by the presence of the Chief Secretary to the Treasury at key events across north America. And back home it has been evident for some time that the future of UK tech has broad cross-party support.

The importance of the UK having a leading position in AI, quantum, life sciences and so much else is not a debating point. Ditto the need to maximise the opportunities to be tapped into at our universities across the UK. Or the priority to ensure we have the skills base (amongst investors as much as the workforces in tech companies) to be credible in the battle for global talent and to make the tech happen.

So what ensures it is a pipeline rather than a pipe dream? Top of the list - the ability to access domestic sources of capital at scale, sufficient to see ideas develop from concept to start up to scale up and beyond. (And making sure, to break a long term trend, that we do all of this here in the UK.)

Also, an innovation framework which encourages and incentivises our academic institutions, and the people within them, to maintain this as a core mission. Add in regulation which is globally competitive. And a policy framework (from clinical trials for life sciences to regulatory ‘sandboxes’ for new tech sectors) which is clear and consistent. Not too much to ask, surely?

Whether ‘virtual reality shoes’ are the future, or destined to go the way of the Teletext travel ads, the excitement about the possibilities of UK tech are real. And the need for the right tech framework never more pressing.

Michael Moore
Chief Executive, BVCA

This article was originally published on 12 July 2023 on the Private Equity News website here.