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Between the shutdown of Silicon Valley Bank and impending closure of Tech Nation, March has been as tumultuous a month for the UK tech industry as it gets. Despite the challenges of the past few weeks for many leaders in the sector, it also revealed important lessons about how to tackle complex problems and build resilience in times of adversity.
As the tech community breathes a collective sigh of relief after a narrowly averted crisis, it is worth reflecting on what recent developments tell us about the state of UK tech and how government policy can prepare it for the future.
Working together in times of crisis
What began as a rumour among investors and entrepreneurs earlier this month soon became a harsh reality: Silicon Valley Bank was going down and about 3,000 UK tech firms were at risk of going under with it. It is estimated that up to 40% of UK startups held accounts or other important relationships with SVB, meaning the closure of the bank’s UK branch posed an existential threat to the British innovation ecosystem.
In a matter of hours, I witnessed the tech community rally together to coordinate a response to the crisis. Leaders from across the industry reached out to affected businesses offering their support and connecting them to key government officials. Meanwhile, the government also responded to the situation swiftly, delivering a deal with HSBC that ultimately saved the tech sector from a major crisis.
The swift response once again brought to light the strong community spirit and sense of solidarity among key players in UK tech. It has also emphasised the government’s willingness to fight for the industry and recognised its strategic importance for the wider economy.
Providing support and mentorship
After the collapse of SVB, a bank widely credited for its intimate understanding of the requirements of startups, the UK tech sector is about to lose another important ally in Tech Nation.
For more than 10 years, this government-funded organisation has played an important role in serving the tech startup ecosystem. More than one-third of British tech unicorns and decacorns have graduated from one of Tech Nation’s programmes, including the likes of Revolut, Darktrace and Deliveroo.
Tech Nation’s closure undoubtedly represents a huge loss for the UK’s tech ecosystem. But if the past weeks have taught us one thing, it’s that investors, entrepreneurs and government leaders will come together and stand up for the future of UK tech when it really matters. In this instance, this must mean finding new ways to mentor founders and create networking opportunities for startups.
Reassuringly, the wheels are already in motion on this front. At the time of writing, Founders Forum is potentially looking at acquiring some aspects of Tech Nation, including its brand.
Setting out a vision for the future
The government’s quick response to the SVB collapse was commendable, but it will take more than acute crisis management to set the UK up for a future as a tech and science superpower.
Amid recent turmoil, the government has put forward a range of promising new measures to further the UK’s position as an international tech leader and bolster industry growth. In the Spring Budget, the Chancellor committed to driving forward important innovations in the field of AI, while also underlining the need for growth across the whole country by establishing ‘innovation clusters’.
The following week, the government put forward its new International Technology Strategy aimed at positioning the UK as a global player capable of both collaborating with other countries and leading on value-driven tech innovation. A key component of this is the national quantum strategy.
Importantly, the new strategy also addressed a key concern at the forefront of tech leaders’ minds – the future of the UK’s semiconductor industry. Recognising semiconductors as an issue of national security, the plan promised that the tech sector will not have to wait much longer for the delivery of the eagerly anticipated semiconductor strategy. This has become an urgent matter as other nations have already aggressively moved on plans and levels of investment.
However, both the Spring Statement and the International Technology Strategy had little to say about how the UK tech industry might tackle persisting skills shortages. While additional support for parents and initiatives to reskill those over 50 stands to benefit the wider labour market, the government has yet to put forward substantial ideas on how to bring diverse talent into tech.
Finding strength in numbers
What, then, did the tech sector learn in March? After narrowly avoiding crisis, it is imperative that startups reconsider their financial strategies and avoid putting all eggs ‘in one basket’. The government, on the other hand, must remain prepared to safeguard the tech industry if it is serious about positioning the UK as a ‘science and technology powerhouse’ during this time of economic and political uncertainty.
It is vital that leaders across public and private sectors recognise that their greatest strength lies in collaboration and community. Government officials can make a significant impact when they listen to the concerns facing tech leaders, investors and entrepreneurs.
The government has a vital role to play in the UK tech sector. At times it needs to be reactive, as in the case of SVB, and critically, it needs to be proactive in setting forth a vision and strategy for its future success.
We have seen other governments from the US and EU to India and Japan take similar steps over the past months – now, more than ever, is the time for the UK government to do the same.