CAMBRIDGE, England — The U.K. is doing a bad job of commercializing technology businesses globally and needs a mindset shift from the investor community to win on the world stage, a former CEO of British chip design firm Arm said Tuesday.
In a keynote speech at Cambridge Tech Week, Warren East, who led Arm between 1994 and 2013, said that there have been criticisms that lackluster growth and poor rates of GDP per head in the U.K. are a source of national “embarrassment.”
He added that too often firms that achieve scale in Britain have a tendency to change locations from the U.K. or list abroad in countries such as the U.S., due to difficulties with achieving global relevance from the country.
“I think we have a lot to offer in terms of U.K.-based innovative technology,” East told the audience at Cambridge Tech Week. However, he added: “We tend not to be able to realise as many global businesses as that promise would suggest.”
East was also previously the CEO of U.K. aviation engineering giant Rolls-Royce. He is currently a non-executive director on the board of Tokamak Energy.
East said that Britain “needs to get commercialization right,” adding that too much innovation gets created in the U.K. but is then exported elsewhere around the world.
There is “sadly a common story of all the wonderful stuff that gets made in Britain and then gets commercialized and exploited elsewhere,” East said. He added that he doesn’t have a “silver bullet” solution on how to fix the issue, but suggested that the U.K. needs to encourage more “risk appetite” to support high-growth tech firms.
“We’re often told that the problem isn’t the startup bit, it’s the scale up bit,” East said, explaining that there are far deeper pools of capital presence in the U.S. “Investor risk appetite in the U.S. is higher than it is in the U.K.,” he said
East noted that there have been pushes among the British entrepreneurial community and VCs for a change to capital market rules that will allow more investments from pension funds into startups and “stimulate risk appetite” in the U.K.
“Fortunately I think we can expect more of that over the coming years,” East told attendees of the Cambridge event. However, he added: “Businesses can’t guarantee that’s going to happen, and can’t wait for the rules to change.”
Last year, Arm, whose chip architectures can be found in most of the world’s smartphone processors, listed on the Nasdaq in the U.S. in a major blow to U.K. officials and the London Stock Exchange’s ambitions to hold more tech debuts in Britain.
The company remains majority-owned by Japanese tech giant SoftBank.