These are the conclusions that were reached during a debate at the E2Exchange annual National Reception of over 400 business leaders, with the theme being what was needed to kickstart the UK’s rise from silicon roundabout to becoming a Silicon Nation.
Although the UK at the current time has ‘probably never been more entrepreneurial’ in the words of Shalini Khemka, the panel, chaired by Chris Blackhurst, Group Content Director of Evening Standard and Independent Group newspapers, debated a number of key issues that need to be addresses to help the country transform itself into Silicon Britain.
Also speaking on the panel were top international tech entrepreneurs including, Brent Hoberman, co-founder, Lastminute.com and Chairman, Made.com; Keith Krach, Chairman and CEO of DocuSign and Renaud Visage, Co-Founder and CTO of Eventbrite.
Higher valuations, which companies can secure in the US, was the first issue cited. Although the panel recognised that the UK IPO market is enjoying a strong resurgence, the depth of the capital markets and the investor base in the US makes it very difficult for companies to achieve similarly high valuations in the UK.
One of the key challenges to achieving these higher valuations in the UK is the difficulty in rapidly scaling up growth companies. The vast size of the US lends itself to higher growth and gives SMEs access to a significantly larger potential marketplace, enabling entrepreneurs to expand their businesses in a way that is not possible in the UK and Europe.
Brent Hoberman said: “The problem in the UK and Europe is one of scale and the challenges of growing a business across different countries, languages and regulations will always be there.” Enhancing the single European market and making it more effective as one market was one possible solution put forward.
Another measure to help address this issue and what the panel described as the ‘leadership and management gap’, which was also regarded as holding back the growth of UK tech companies, was ensuring that the recent backlash against immigration is countered and the freedom of movement of people within Europe is maintained and overall immigration is not significantly reduced.
Renaud Visage said: “when you’re scaling up and aiming for hyper growth, the middle management infrastructure is most important”, while Keith Krach echoed: “the companies with the best people win”.
It was also agreed that links between big business and start-ups could be better harnessed in order to help nurture and scale start-ups in the UK. Large corporations with their cash, infrastructure and scalability could better support entrepreneurs while the Government was encouraged to do more to unleash large corporates’ cash, with Brent Hoberman commenting that he “would not be surprised if the Government introduced tax breaks for big businesses to invest more in start-ups.”
The panel agreed that while Tech City is an excellent marketing umbrella, it still required more substance, to develop a community and eco-system, to really be able to support tech businesses and entrepreneurs to replicate Silicon Valley, through mentoring, and giving back to the business community. Keith Krach commented: “The secret to Silicon Valley is its genealogy – the more you give back, the more you get in return,” however he praised London’s energy, remarking that the city is “the capital of the world”.
Lastly the panel agreed that it was important to focus on education, which the current Government is doing with its Enterprise Adviser due to launch its report into the area later this month. Said Chris Blackhurst: “My daughters were down to study French at school but now they are studying coding, having that as part of the curriculum is a definite step in the right direction.”
Shalini Khemka, CEO of E2Exchange, commented: “The UK is the most entrepreneurial it has ever been but we could still do more to support growth companies. The digital revolution has been transformative for small businesses and start-ups have embraced technology and fundamentally changed the way we do business. With the establishment of Tech City, Silicon Roundabout and the Silicon Triangle, and by further embracing mentoring and innovation, there is no doubt that the UK has the potential to be a major competitor in the global tech race.
Introducing more pro-business initiatives and addressing access to funding and talent are just some of the ways we can support the growth of our SMEs. Entrepreneurs are the powerhouse of the UK economy and it is vital that we recognise their importance and contribution and the need to help them thrive and flourish.”