There is nothing a politician enjoys more than a mantra—a word that can be repeated again and again until, perhaps, the idea becomes a reality.
And “science superpower” is one of the most recent phrases spoken by government politicians in the United Kingdom.
It has been around for some time.
In 2021, Britain’s former Prime Minister Boris Johnson said that the goal of his government was to make Britain a scientific superpower again.
The Finance Minister, Jeremy Hunt, told members of parliament at the end of 2023 that his goal was to make sure that the UK could compete with Silicon Valley.
This year, the Prime Minister reorganised the government and set up the Ministry of Science, Innovation, and Technology.It is expected that startups and scaleups will be very important to the development of research that can be used to make money.
How suspicious ought we to be?
It is easy to view the science superpower strategy as a sort of fig leaf for a government at a time when the economy as a whole does not appear to be doing especially well.
It is very cynical.
Firstly, the U.K. technology industry is functioning rather nicely.
It continues to draw substantial amounts of both international and domestic VC capital.
In the first half of 2022, £14.77 billion in venture capital poured into the United Kingdom.
Even though investments dropped sharply to £8 billion between July and December, investors are still drawn to the U.K. technology industry.
From an economic point of view, it is very important for the UK not to fall behind in the commercial development of important technologies.As a result, no one should challenge the goal.
According to Science Minister George Freeman, however, the United Kingdom is not yet a scientific superpower but rather a “science powerhouse.”
To get the former rank, one must become an “innovation nation.”
In essence, he intended to create an atmosphere in which scientific inquiry might be industrialised effectively.
How can this be accomplished?
I met with two scaleup CEOs in the core of the science and technology industry to obtain their perspective on the measures necessary to help their respective businesses.
Scott White is the chief executive officer of Pragmatic Semiconductor.
It was established twelve years ago and has created a microchip technology that does not require silicon.
Currently, it manufactures flexible, low-cost chips that are applicable in a variety of settings.
With a location in the North East of England, its business concept is production, but it also intends to provide clients with small manufacturing equipment.
Moreover, it creates its own RFID chips for the tracking of products in transit.
Very recently, Pragmatic commissioned a survey of 250 IT industry executives.
When asked whether the government could achieve its goal of becoming a research powerhouse by 2030, 68 percent said affirmatively, but just 40 percent believed that sufficient government assistance was available.
According to White, the UK’s cash-rich environment remains uneven, with the majority of capital flowing to startups rather than scaleups.
The majority of the cash spent in later phases originates from outside.
“We completed a Series C in 2021 or 2022 for $125 million.”
80% of the funding originated from outside the United Kingdom, he claims.
So, there is a need for funding that will enable IT companies to remain in the United Kingdom in terms of location and control as they expand.
Yet, what can the government do?
Obviously, one solution is to facilitate institutional investment.
White applauds modifications to insurance sector regulations that will let pension funds, in particular, invest in technology.
He also appreciates the efforts achieved in delivering public finance through the British Business Bank and British Patient Capital, its venture arm.
In addition to investing alongside VCs, the organisation has established the £375 million Future Fund: Breakthrough for deep tech businesses.
White replies, “That’s wonderful, but the scale has to be considerably larger.”
ElSayed Mostafa agrees.
He is the chief executive officer and co-founder of Automata, a provider of automation solutions for laboratories, mostly in the health sciences industry.
The company’s technologies are aimed at accelerating and reducing human error in processes such as diagnostics and clinical trials.
As venture capitalists allocate resources, he thinks that some industries are better served by others, with deep technology having a specific challenge.
“We all discuss the necessity of deep technology, but access to capital in the deep technology industry is difficult.”
And the United Kingdom may be sliding behind its European rivals.According to ElSayed, the largest investor in deep technology is BPIFrance (a sovereign wealth fund), followed by Germany and Scandinavia.
ElSayed suggests that a shift is possible.
He cites remarks made by the incoming president of the British Business Bank, who recently proposed the creation of a sovereign growth fund to promote innovation.
Even quite small adjustments might have positive results.
White references existing initiatives, including the Enterprise Investment Scheme (EIS) and Venture Capital Trusts.
These vehicles have encouraged investors to fund startups by granting tax incentives to those who finance qualifying enterprises.
Nevertheless, if a company reaches a certain size, the tax incentives disappear, so scaleups do not profit from the programmes.
Not everything is about the money.
White states that it is also necessary to promote domestic demand.
“For instance, government procurement may be used to boost adoption.”
Undoubtedly, the government has a tremendous amount of influence in certain fields.
ElSayed uses clinical studies as an illustration.
The National Health Service, which services almost the whole population and can collect data accordingly, is a tremendously valuable resource for the United Kingdom.
This makes Britain potentially one of the greatest places in the world for conducting clinical trials.
Although it is a national service, the majority of decisions are made at the level of local health trusts.
ElSayed asserts that a national plan is required.
Britain already has a national policy for genomics research, so a precedent already exists.
Visa policy is another crucial component of the puzzle.
ElSayed emphasises the necessity for a system that permits science-based companies to recruit rapidly.
“When a firm is growing at our rate, it is difficult to locate employees with the right to work in the United Kingdom,” he explains.
Scott White asserts that Britain has the capacity to become a scientific powerhouse, but it is necessary to clarify what he means by this.
The pieces of the government assistance jigsaw puzzle are not all in place.