Over the last decade, Britain has seen 300 of its most valuable firms acquired by foreign buyers, largely from the United States. Between 2010 and 2023, every one of the 38 largest UK venture capital-backed tech companies in critical sectors like artificial intelligence and biotechnology exited to overseas incumbents. The resulting venture model has prioritized rapid windfalls from surveillance technology and gig platforms instead of addressing pressing social needs. Critics argue the UK should look to state-led foreign models, such as Brazil's domestic vaccine manufacturing, to direct public investment toward self-sustaining economic capacity.
Key points
Relying on venture capital to fund startups fails as an industrial strategy because it pr…: Relying on venture capital to fund startups fails as an industrial strategy because it prioritizes foreign acquisitions over national ownership.
Channelling British pension investments into domestic startups risks merely driving up fu…: Channelling British pension investments into domestic startups risks merely driving up future purchase prices for international corporations.
Retaining national innovation and prioritizing domestic social needs can deliver more res…: Retaining national innovation and prioritizing domestic social needs can deliver more resilient long-term economic development than private investor exits.
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Britain keeps selling its most valuable companies. The Financial Times calculates that 300 went to foreign buyers, mostly American, over the past decade. What if innovation were scaled up to serve social needs here rather than US investors’ profits? That is the provocation issued by the thinktank Common Wealth in a paper titled We Aren’t the Champions, which takes aim at the UK’s venture capital (VC) industry.
The authors say that as long as the UK is subordinated to US cash, getting startups to a heavyweight size will be a sisyphean task. Britain’s tech pioneers are often sold before they become giants. DeepMind, founded in London in 2010, went to Google just four years later. Britain’s venture capitalists might argue that they are in it for themselves, not for building up British tech.
The conventional wisdom is that if startups are struggling to grow, the problem must be that they lack capital. That is why Rachel Reeves, as chancellor, wanted pension funds to invest in UK assets. But the paper says that this risks making things worse. Putting cash into…
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