As part of London Tech Week, Prime Minister Rishi Sunak listed ten ways the UK is “one of the best places in the world to start a tech business.”

The Prime Minister deemed the UK “an island of innovation,” before going on to evidence why startups, investors, and entrepreneurs should join the UK market.

1. In the last decade, the UK has created 134 tech unicorns.
A tech unicorn is a privately-held company with a valuation of over $1 billion — and the UK is currently leading the rest of Europe in total number of startups.

Sunak used the UK’s growing number of tech unicorns as evidence for more tech entreprenuers to get started in Britain.

According to the Prime Minister, the UK currently ranks third globally for the amount of venture capital investment.

In 2022, however, the UK saw a major dip in VC funding, with the lowest funding rounds seen in the last five years.

Economic uncertainty and the energy crisis caused a dip in VC funding, though this may be starting to stabalise.

“The Prime Minister made his big ambitions for UK tech clear in his opening keynote at London Tech Week,” said Laurent Descout, the CEO of Neo, a UK finance technology company.

“Sunak shared why the UK is a great location for tech businesses and the progress that’s been made to date such as the creation of 134 unicorns in the past decade and the UK being the best place to raise capital in Europe.”

2. Digital literacy 
The Prime Minister dubbed the UK as one of the most “digitally literate societies in the world,” quoting the statistic that 97% of the population is “using the internet,” with one of the highest daily minutes of internet use per individuals on average.

According to his speech, 86% of ‘digitally active’ adults use at least one fintech service.

However, if this translates to true digital literacy is up for debate, and while UK inhabitants may use the internet, the quality of this use ranges broadly.

Alarmingly, the Digital Poverty Alliance found that one in five Brits lack digital skills, often holding them back from entering the workforce.

The Digital Poverty Alliance also found that 26% of young people do not have access to a laptop or similar device, an issue which saw one in five children unable to learn effectively at home during the pandemic.

Further, Citizens Advice estimated that around one million Brits had to forgoe internet access due to higher bills during the winter months of 2023 amid the cost of living crisis.

Additionally, rural and remote communities suffer as a result of poor broadband quality, impacting their business and education opportunities.

The current digital divide subsequently hampers advancing digital literacy, causing delays on digital transformation and increasing economic divides.

“As the need for digital-savvy employees continues to grow, it will be impossible for any one organisation or government to create a skilled workforce alone. Having said that, any changes to address the digital skills gap need to start with education, a phase of life that begins long before anyone enters the workforce,” Rajasekar Sukumar, SVP & Head, Europe at Persistent Systems said.

3. The top 25 biopharmaceutical organisations operate in the UK
According to the Prime Minister, the UK has the largest life sciences sector in Europe.

“The UK has a world-leading capacity for genomic sequencing and the biggest BioBank database of anywhere in the world – a great place if you’re in pharmatech,” Sunak said.

Biotech startups often originate as spin-offs from university research projects that grow and commercialise outside of the university ecosystem. X-Genix from the University of St. Andrews, which recently won the Converge Challenge at the Converge Award, is just one example.

4.Universities and the sciences

The UK is home to four of the top 10 global universities, according to QS rankings.

These include the University of Cambridge, the University of Oxford, Imperial College London, and University College London.

The University of Cambridge ranked third overall in engineering and technology and the natural sciences, while the University of Oxford ranked second overall in life sciences.

The accessibility of these universities, however, has come under fire as tuition costs have increased even for home students, and ‘elitism’ has been a continuous issues among the more prestigious institutions in Britain.

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5. VC funding in 2022
According to the Prime Minister, UK startups received over $31 billion of VC funding in 2022. This is lower than when funding peaked in 2021, but is about 72% higher than funding in 2020, according to TechNation.

“While the UK is clearly in a strong position,” Descout commented, “it still has a bit of work to do to become a science and technology superpower. Reports today show that US business confidence in the UK has dropped and following a dearth of IPO activity, the UK’s future as a tech superpower isn’t guaranteed.

6. Low corporation tax
Sunak stressed that the 25% corporation tax rate in the UK is the lowest in the G7 and the fourth lowest in the G20, which “is designed to facilitate more for inward investment for businesses, helping them to flourish.”

Putting the socioeconomic ramifications of a low corporate tax rate aside, many international businesses are unsure about entering the UK market due to the drifting regulations and policies since leaving the single-EU market.

The UK is currently still legislating two bills with major potential consequences for tech businesses and consumers, including a new Data Protection Bill which would introduce differences to the EU’s GDPR regulations, and the Online Safety Bill, which already has major companies – like WhatsApp and Signal – suggesting that they’d abandon the UK altogether.
The Prime Minister claims the UK offers the “most generous capital allowances regimes in the OECD.”

Capital allowances include in main plan and machinery for three years, which is a tax cut worth £27 billion.

8. Increasing Research and Development (R&D) Investment
The UK government will be increasing investment in R&D by £5 billion, reaching a total of £2o billion a year by 2024/25, according to Sunak.

Further, they have created a new Advanced Research and Invention Agency, which is “focused on high-risk, high reward research.”

According to the press release of the launch of the agency, it was created with the intention of offering a more unique sense of independence for top researchers to develop technology and solutions in high-impact areas.

9. New visas
The UK has also introduced new visas in 2022 – including the Scale-Up visa and the High Potential Individual visa – to attract tech talent to the country.

This is despite one of Sunak’s main tenants as Prime Minister to “Stop the Boats,” turning away refugees and migrants from entering the UK.

Further, amid the digital skills shortage, Brexit has made it harder to EU citizens to live and work in the UK, making the pool of people needing visas to work in the UK larger and more competitive.

Yoko Spring, CEO of Ledgy, an equity management company said: “Outside stock exchanges, the ease of doing business in the UK for international businesses could definitely be improved, especially now the UK is outside the EU. We would love an easier visa process when team members need to come and spend extended periods of time in the UK, for instance.”

10. A fintech hub
According to the Prime Minister, the UK is home to half of Europe’s fintech unicorns, making it the second largest country in the world for fintech.

He also said that the fintech sector attracted more investment than the next thirteen European countries combined just last year.

Tech Reacts
Sunak’s government has made their tech ambitions clear from the start, with tech being the central focus of economic plans.

Investing in technology, particularly R&D, is a positive step, but complimenting the UK’s digital literacy may seem out of touch to some, considering the skills shortage dampening digital transformation efforts.

Further, though not mentioned in the ten points, Sunak’s focus on AI – both in accelerating its development while also regulating its use – has shown that the UK government is aware of the burgeoning potential of the technology.

“AI is an acronym on everyone’s lips at the moment and Sunak of course mentioned the potential of the technology,” Descout commented.

“It was interesting that he did so in the context of AI safety regulation. AI has huge potential but it needs to be harnessed carefully and I’m sure many in the industry will respond positively to the government’s safety-first approach.”

But outside of AI, Descout thinks the UK certainly has a longer way to go: “If the UK government is to achieve its lofty ambitions, it needs to play to its strengths, champion the sector, support startups, increase investment, make it easier to do business in the UK and boost digital skills.”

Sukumar added: “We need to create an eco-system of continually evolving educational curricula in collaboration with key industries. The government needs to support and enable maximum participation in this eco-system through early-stage education and a continued cycle of education beyond school.

“Corporations also need to push to have reskilling drives and partnerships with digital experts and academia, thus creating a learning culture for their employees where upskilling is part of the day to day.

“Ultimately, with technology constantly advancing and evolving, education needs to follow suit.”