Thanks after all to the BVCA which has been a constructive accomplice to authorities together with by means of its Pensions & Private Capital Expert Panel, led by Kerry Baldwin, and its work to launch the Investment Compact. I need to recognise your position, significantly in holding this dialog sensible and motion oriented.
And I need to be clear, now’s the time for motion.
It is encouraging to see so many pension traders right here. As somebody mentioned to me just lately, Canadian pensioners have completed very nicely out of investing in UK science and know-how firms. We must do the similar for UK pensioners.
35 years in the past in Cambridge, a small group at Acorn Computers created a revolutionary processor design. That innovation turned Arm. From a handful of engineers, the enterprise grew right into a world chief whose designs energy 99 per cent of the world’s smartphones. Arm started in the UK, constructed on British science and ingenuity – however a lot of the capital that fuelled its progress got here from abroad, and as we speak its major itemizing is on NASDAQ in New York.
There are many different examples of thrilling, impactful UK firms doing incredible work, to which UK traders are underexposed.
Arm’s story captures each our strengths and our problem: world-class analysis and innovation, dwelling to 4 of the world’s high ten universities, nice expertise, and now extra startups than wherever else in Europe.
But nonetheless too little home capital to take sufficient of our thrilling innovation engines to international scale. Today’s Showcase is about altering that.
We meet at an thrilling time. The UK is Europe’s main vacation spot for tech funding, and we’re critical about commercialising and scaling our analysis. Our Modern Industrial Strategy, with 8 Sector Plans:
- Advanced Manufacturing
- Clean Energy Industries
- Creative Industries
- Defence
- Digital and Technologies
- Financial Services
- Life Sciences
- Professional and Business Services
supplies the framework.
And as many individuals have mentioned to me – in contrast to earlier industrial methods you don’t must look in the appendix to search out science and know-how. It is woven all through each half and each sector plan.
All underpinned by smarter funding from our public monetary establishments, pro-innovation regulation, stronger procurement alerts, a wonderful expertise and expertise pipeline, and by deep partnerships with enterprise and traders.
The UK ranks third globally for enterprise capital funding, behind solely the US and China, but has produced solely 2 tech companies valued at over £10 billion in the final 50 years — Sage and Arm. But many many extra UK innovations and startups have fed progress elsewhere.
I need to be clear. Unlocking extra pension fund funding is central to our mission. This isn’t just about returns — though it is going to assist ship larger returns. It can also be about fuelling the innovation that underpins UK competitiveness: boosting productiveness, strengthening the NHS, advancing defence functionality, accelerating the clear vitality transition, and scaling UK management in life sciences, AI, fintech and sustainability.
Of course, the UK has deep swimming pools of institutional capital, but solely a fraction reaches our most promising progress firms. UK DC schemes allocate about 0.5% to personal fairness. By distinction, Australian superannuation funds make investments as much as 5% in non-public markets.
And we all know that the proportion of UK capital invested in S&T firms drops dramatically from seed funding by means of to scale up.
But – and many because of many on this room – we’re making progress.
The Mansion House Accord, the Investment Compact and the BVCA’s Expert Panel’s report have offered construction and ambition, and authorities has offered capital and help by means of initiatives equivalent to the British Growth Partnership and LIFTS. Using LIFTS capital and co-investment from Phoenix Group, Schroders’ UK Long-Term Asset Fund has already deployed capital into firms equivalent to Draig Therapeutics engaged on subsequent technology medicines for neuropsychiatric problems.
We’ve seen robust enterprise inflows – over $16 billion invested into UK start-ups and scale-ups final 12 months, and greater than $8 billion raised in the first half of 2025, exceeding France and Germany mixed. But IPO exercise has fallen sharply: in H1 2025 simply £160 million was raised through IPOs in London – a 98 per cent drop in comparison with H1 2021 and one among the weakest durations in 3 a long time – whereas abroad traders proceed to accumulate main UK know-how firms, and profit from the innovation we now have developed right here.
So, the problem is obvious: nice science, incredible folks, robust early-stage funding – however nonetheless too many boundaries at scale-up and sustainability.
That is why we’re reforming the UK’s capital markets to make sure high-growth firms can scale and keep right here. We are streamlining itemizing and prospectus guidelines, eradicating outdated restrictions on follow-on capital, and have launched PISCES – a brand new stock-exchange mannequin to assist non-public firms scale and present a stepping-stone to public markets.
It is starting to work however we have to go sooner. We get extra spin outs and startups each month and daily we don’t repair the scale up deficit we enhance the misplaced alternative.
We are pushing higher regulation, together with by means of the work of the Regulatory Innovation Office which has cleared away boundaries in 4 know-how areas and will broaden its work over the subsequent 12 months.
We are reforming procurement to allow authorities to be a greater buyer for progressive SMEs and leveraging public capital by means of the National Wealth Fund and the British Business Bank.
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We have dedicated £670 million for quantum applied sciences; £500 million for the Sovereign AI Unit; AI Growth Zones; and invested in computing infrastructure for AI.
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The Life Sciences Sector Plan can be supported over the lifetime of the Spending Review by authorities funding of over £2 billion. Alongside the Wellcome belief we’ll make investments £600M in creating the Health Data Research Service to utilise our extraordinary knowledge assets to enhance therapies, prevention and cures.
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Defence will commit a £2.5 billion enhance in SME spend by 2028.
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In clear vitality and sustainability we’ll double funding to £30 billion yearly by 2035, together with formidable plans for brand spanking new nuclear applied sciences
Today’s Showcase represents the subsequent part of that work: connecting pension trade representatives with high-growth firms throughout defence, life sciences, AI and fintech, cleantech and sustainability.
Yes – there are good issues to put money into, and loads of them.
And to help that journey I’m happy to announce that we now have published the second edition of the UK Innovation Clusters Map. This offers a clearer, extra complete view of our innovation clusters throughout the UK and is a sensible software to assist traders determine the strongest alternatives. We are pushing the speedy improvement of the extraordinary Oxford-Cambridge Growth Corridor and the alternatives of the Northern Growth Corridor.
Arm’s story reveals what is feasible: a British thought, scaled to international affect.
Rather than rely solely on abroad capital, we wish home funding to again the subsequent technology of UK success tales. If we unlock extra of our personal long-term financial savings to help UK innovation, the subsequent Arm, the subsequent AstraZeneca, the subsequent Rolls Royce, the subsequent Oxford Nanopore can emerge and be sustainable. Investors and pensions will share in the returns, the NHS will get higher therapies sooner, and Britain will cement its place as the finest place in Europe to scale an organization.
That is the prize earlier than us. But we have to transfer quick. If you didn’t really feel the weight of expectation in your shoulders earlier than you entered the room, I hope you do now.