If, as looks increasingly certain, Labour wins the general election this week, they will get the keys to Downing Street as well as lots of new levers to pull on the economy. The next government will inherit a mixed portfolio – inflation challenges, stalled productivity and multiple pressures on key public services – but there are twinkling lights amid this gloom. One of the most notable is the UK’s tech startup scene.
We have the third most successful startup ecosystem in the world. UK innovation has become one of the core engines of growth. Added to this, we are a global hub for sectors such as fintech, AI and climate tech – all of which look set to define the emerging global world order. And we did this all in a little over a decade.
But this doesn’t mean our startup ecosystem should be taken for granted – ignored and left to stagnate. We cannot allow startup success today to be its downfall tomorrow.
Over the past 15 years, we’ve witnessed a remarkable transformation. A once fledgling startup scene, often dismissed by sceptics, has become one of the beating hearts of the economy. The numbers tell a compelling story: year-on-year increases in venture capital investment, a thriving AI sector valued at £72bn, and a burgeoning climate tech industry worth over £26bn.
These aren’t just statistics – they’re a testament to a process that’s working. Moreover, we’re seeing a cultural shift in attitudes to the economy. Our brightest young minds are increasingly drawn to startups, either joining innovative companies or launching their own ventures.
This journey, however, is far from over. The startup ecosystem, much like the broader economy, faces significant challenges. From funding crunches and valuation pressures to the need for a revamped approach to R&D tax credits, there are hurdles to overcome.
But these challenges should not deter us from our path. Rather, they should strengthen our resolve to stay the course.
The temptation in times of uncertainty and elections is to change direction and seek new solutions to emerging problems. But in the case of our startup ecosystem, consistency and commitment are key.
The foundations we’ve laid as a country – supportive policies, investment in innovation, and a focus on emerging technologies – have proven effective. Now is the time to build upon these foundations, not to uproot them.
Our vision for the future remains unchanged: the UK shouldn’t just participate in the global tech race – it should lead it. That means continually working towards an ecosystem where startups can scale into unicorns, where regulations support innovation and where founders with great ideas – no matter what background they come from – can access the capital they need.
The success we’ve achieved so far hasn’t happened by chance. It’s the result of exceptional people working together to build great companies, supported by careful planning, strategic investment, and vital support from the government and regulators.
The message to a future government is: don’t throw the baby out with the bathwater. Double down on the levers that are working and resist the urge to reinvent the wheel. Now more than ever, we must stick to the approach that has nurtured startups, and ensure they continue to drive Britain’s future prosperity.
That’s why I would urge the next government to make the Startup Coalition’s manifesto – published yesterday – required reading. It’s a roadmap to help the government help startups.
The future of our economy is inextricably linked to the success of our startups. In times like these, it would be easy for a government to focus entirely on what’s going wrong. But in freeing up what’s already going right to run faster, we can drive growth, create new jobs and secure our future at the forefront of today’s and tomorrow’s economy.
Jeff Lynn is executive chairman and co-founder of Seedrs, and co-founder and chair of the Startup Coalition.
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