Britain may be a tech leader but we cannot rest on our laurels
In the 18 years I have worked in technology investment, the UK has transformed itself from a landing pad for US software companies expanding into Europe, to a vibrant and established innovation market, hosting and producing some of the most exciting firms in the world. Perversely, the greatest accelerant for this may have been the 2009 financial crisis, which catalysed innovation, and saw financial services losing its pre-eminence in favour of the emerging technology industry.
Among all the furore around robots and magical cars, it is worth remembering that there are some lasting and fundamental reasons why the UK is, and will increasingly be, a special place when it comes to tech.
First, we are geographically fortunate. In Europe, on a central timezone – with enough independence to have identity and enough connectivity to open new markets.
Second, we have enlightened regulators and a government that has not wavered in its support for digital industries. Third, the UK is a fertile place for creativity. London is recognised as one of the great cities of the world.
These are just some of the reasons why, at Oxford Capital, we focus solely on Britain, seeking to invest in UK champions that have the potential to be world-class winners. British firms are defining the changes consumers will see in the next five to 10 years, and while London has a crucial role to play in managing and deploying capital, there are areas of specialism across the whole country, from gaming in Edinburgh to silicon tech in Cambridge or robotics in Bristol.
One area where Britain is out in front is in digital health. We offer a unique test-bed for radical health firms; thanks to our NHS, we have highly skilled clinicians and technologists, the ability to shift policy, build new products and services, and a country-wide belief that everyone should have access to them. When we invested in Manchester-based Push Doctor in 2016, its focus was on persuading patients that mobile GP consultations can be as good as those in person; nine out of 10 cases that a GP encounters can be resolved virtually. That change has now happened. Push Doctor has a network of 7,000 doctors, serving thousands of patients.
Over the coming decade, healthcare will re-orientate around the patient’s holistic need, with AI improving clinician decision-making, enhancing quality of care and continuing to widen its reach across society.
In the automotive space, the UK already plays host to some of the world’s largest vehicle manufacturers, as well as the highest concentration of Formula 1 teams. Along with a forward-thinking regulatory environment and support from emerging insurance models, this creates a high-octane environment for the builders of the autonomous vehicles of the near future.
These vehicles will unlock countless opportunities beyond the evident safety and sustainability benefits: think of the productivity gains from journeys where driving is no longer required. Media, hospitality, retail and real estate are but a few industries that will see major shifts in the way we work, socialise and rest.
And it would be remiss not to mention financial technology – in which the UK is a world leader. This is the best place in the world to be a consumer of financial products.
Not only are they being reinvented, by the likes of robo-advisers and digital-only banks, but they are also being rebundled, as new entrants collaborate to deliver multiple services through single channels. Our portfolio company Curve, for example, aims to connect all of a customer’s accounts
‘It has been too common a practice for successful companies to sell to US corporates early’
and financial products on one card and app. A smart regulatory environment enforces consumer protection and choice, with paradigms like Open Banking, which allows third-party apps to access customers’ transaction data. For Curve, this will mean the ability to track spending beyond card transactions, giving a more comprehensive picture of an individual’s finances and thus enabling an improved user experience. Better products mean more discerning customers, which in turn engenders standard-raising. That places UK fintech firms in a very strong position.
Inevitably, innovation brings unpredictable outcomes. This is why the UK’S focus now must be to improve our long-term view. A relatively small number of UK tech firms have gone on to be global successes – the likes of Arm, Sage and Skyscanner. Fewer still have remained in native ownership.
It has been too common a practice for successful companies to sell to US corporates early, with the best executives hived out to the West Coast. We do not yet have a cohort of Googles and Amazons. The post-ipo performance of several of the handful of companies to go public has shown that there is an appetite for wider investment in these stories, but the number of examples is still small.
Moreover, while the UK is unique, we cannot stand alone. Continued access to the digital single market is essential, as is immigration. Access to talent, particularly from Europe, drives the growth of UK companies.
Our labour laws are relatively flexible, but could go further in protecting the employees that constitute the country’s success. Any aspiration to strengthen the UK’S tech ecosystem to rival Silicon Valley must be based on the acknowledgement that the latter’s success was built on free movement of labour. Britain has the capability to build the most successful tech firms in the world. Those of us working to make this a reality must keep up the momentum.
Tom Bradley is a partner at Oxford Capital