MAKE INVESTMENT WORK FOR UK AND SET THE SCENE FOR SCALE-UP SUCCESS

Last week, the government held its much anticipated International Investment Summit in an effort to signal to the world that the UK is open for business. At the summit – attended by business leaders from across the globe - Prime Minister Keir Starmer announced ￡63bn of investment into the UK.

But the big question remains: how can we make that investment work for the whole of the UK – including here in Wales. How can we turn investment into the economic change we need to rise to the top of G7 league tables once again?

Part of the answer to this question lies in the potential of the UK’s scale-ups. When it comes to start-ups, the UK is an unquestioned global leader. Across the UK, 900,000 new and innovative start-ups are founded every single year. What’s more, the UK boasts over 100 unicorn firms, and a tech ecosystem estimated at over ￡1tn. There is no doubt that the UK is the European start-up capital. That’s the good news.

The bad news is that too many of our great ideas are struggling to scale into commercial powerhouses. Scale-ups – promising ventures, with great potential for our economy - are not able to thrive here in the UK – because they’re struggling to get the support, the skills and finance they need.

It’s estimated that we have a funding gap for expanding scale-ups of as much as ￡15bn per year. The lack of financing has real consequences for our economy, as we’re losing thousands of game-changing ideas, with firms either selling out far too soon, or looking to move overseas.

It’s time for a regulatory step-change, to enable scale-ups to innovate, grow, and stay here in the UK. Now, in the first 100 days of the new government, we’ve already seen a number of measures that can finally unleash the potential of UK scale-ups – including the announcement of a Regulatory Innovation Office and the new National Wealth Fund. But there’s more work left to be done.

The CBI is calling on the government to build on these measures by using the Pensions Schemes Bill to unlock investment into scale-ups. At the moment, our pensions funds simply are not investing enough in the high-growth firms here in the UK, ranking behind our counterparts in Australia and Canda. That needs to change.

We also need the right rules in place to help those firms holding immense potential succeed. A lot of our big-idea scale ups are innovators, driving real change in areas like tech and life sciences. But their ambitions are often stifled by complex regulations that put a brake on progress.

And of course, firms rely on the right talent to turn plans into reality. Many scale-ups require specific STEM experience in frontier tech – and are seriously struggling with labour shortages, not helped by the pace and cost of the visa process. ?In short, there are too many roadblocks in the way for scale-ups to truly flourish. It’s potential the UK can’t afford to miss out on.

Right now, we are seeing bright spots emerging in our economy – and coupled with a new government geared towards change, we can make serious progress on growth and build momentum and investor confidence in the UK. If we invest in scaleups, we can move our economy from short-term shock absorption of recent years to long-term growth once and for all.

CBI Wales