The UK can arguably be viewed as a global leadership contender in technological innovation, proving itself in areas including artificial intelligence, fintech and electric vehicles.

One thing that can’t be argued against is that the tech sector here is growing rapidly, and a lot of the leading solutions and innovations in this space are being driven by the burgeoning UK deep tech sector.

Deep tech is having a profound impact on areas such as medical devices, clean tech, energy efficiency, autonomous systems, robotics, and smart homes/cities.

The term itself is best described as technology that is based on tangible engineering innovation or scientific advances and discoveries. It can span across many technological areas and impact diverse applications.

Britain is fast becoming a breeding ground for deep tech companies, with the hope being that nurturing this space can fortify the UK as a leading player in global tech country in a strong position to fortify itself as a leading player in global tech.

Alan Banks, CEO at tech industry association TechWorks, spoke to DIGIT about how the the country should carry this out, and where the UK deep tech sector could be utilised to solve some of the planet’s biggest problems.

Where do we sit on the global tech stage?

Britain has historically had strong research and innovation in universities, as well as a track record of firms investing in research and development (R&D), which has steadily increased over time. 

The UK government has been supportive of R&D and is helping with competition programmes like Innovate UK, DCMS, and supporting research, development, and collaboration programmes.

Additionally, the government has stated it wants the UK to become a technology superpower in the future. However, without strong investment, it will be difficult for this goal to be achieved.

Banks comments: “Since 2015, global investment in deep tech has increased about 20% year-on-year, and the UK shares some of this investment, and investment in UK deep tech sector companies has continued to grow rapidly over the last five years, rising by 291% to 2.3 billion of investment in 2020.”

According to Banks, Scotland can also be singled out for praise within the UK, with the country’s digital technologies currently prospering  and growing one and a half times faster than the overall economy. Banks expands on this, saying: “The deep tech sector in general is thriving”.

He continues: “There’s a very large number of long-established SMEs and companies. But over 25% of high-growth companies in Scotland are deep tech companies.”

He adds: “The industry is huge globally, and Scotland has a strong base in medical technology, photonics, space development, underwater technologies, defence, as well as the oil and gas industries, all of which are now starting to have certain challenges as things are changing around them and they start to embrace some of these deep tech resolutions to solve some of their challenges.”

According to Banks, Scotland continues to be a leading place for investment around AI, with the country being home to many firms specialising in this field being founded here, particularly in Edinburgh.

Tech education is also flourishing in Scotland, Banks says, adding: “Scotland continues to have a number of very strong universities that are very supportive of research and development, and that then leads to spin outs, so we’re seeing a number of spin outs from these universities.”

Banks also notes a recently approved government investment into several technology hubs in Scotland, and Edinburgh is seen as a top city for startups in the UK, with a very high growth potential. Glasgow also remains one of the UK’s biggest investment hubs for deep tech.

Use cases for deep tech

It is positive to hear that technological innovation is thriving, both in Scotland and the UK, particularly as we look towards tech to help solve future global issues.

Industry leaders, policymakers, academics, and researchers agree that, globally, we urgently need to introduce deep tech to boost productivity and solve some of the most pressing challenges facing society today.

Banks references spin out companies and small SMEs in England that are leading DNA sequencing, as well as data gathering companies conducting world-leading research in disease prevention, including cyclic scientific diagnosis for the diagnosis and prevention of cancer.

He continues: “We also have leading companies developing agritech, ensuring that we maximise the yield on our crops and get food into the supply chain as fast as we can and in the most sustainable way that we can.

“As society continues to solve the challenges of things like ageing, population, global warming, and loneliness, deep tech is going to become more vital.”

Emerging tech, such as quantum computing and AI, will enable for solutions to be found for these large-scale societal problems, Banks muses.

Challenges facing deep tech adoption

However, a growing the UK deep tech sector does not come without a set of challenges, Banks notes.

Firstly, energy requirements. Powering cutting-edge technology is demanding and will require more and more computing power and infrastructure.

“More computing power means you will need faster chips, faster processes, and they generate a lot of heat, or they reach the limitations of physics, so you must start looking at new technologies,” he says.

Banks adds: “I think there are technology challenges, but a lot of this has been overcome when you introduce things like quantum computing. I think this will be a game changer, but it also will introduce significant other challenges.”

Additionally, finding investment in the UK can be difficult. Strong intellectual property, and a desire for tech advancement, means firms can easily access initial startup investment.

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However, once they go for their second round of investment, difficulty in scaling and general investment attitudes in the UK mean they often struggle, and many firms end up moving offshore.

A report last year found that UK deep tech firms were less likely to raise a second round of funding than their US counterparts: only 49% of UK startups received ‘follow-on funding’ compared to 63% of companies based in the US.

Due to this, 39% of deep tech businesses in the UK run out of investment before they raise a second round of capital.

“I think one of the challenges that we have is how do we retain the technology development that we have an intellectual property that’s been created in the UK software going offshore as it matures?” Banks asks.

Deep tech’s role in the UK’s future

Despite the challenges, Banks eyes an opportunity for Britain to cement itself as a global leader in deep tech rollout.

He notes, however, a need to continue ensuring the UK tech sector is attractive for investment, and to continue this investment throughout the lifecycle, from development through to implementation.

Tech Nation previously made the bold statement that deep tech “sits at the heart of the UK’s tech future,” and Banks agrees.

On this, he says: “We have our top-flight universities, we have leading technology companies, and the government support that we get gives us the opportunity to be a leading technology country,” he says.

“But we must value – and I underscore this – we must value the people and the technology that’s developed, be proud of it, keep it here in the UK, and find mechanisms and tools that really make us very proud of what we do here, and be patriotic about it!”

Banks concludes: “We are at the centre of our technical future. But we’ve got to make sure we hang on to it to make the UK as prosperous as it can be.”

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