Trade Tuesday: London Tech Week - Is the UK still an attractive place to invest?

Away from the spectacle of politics these past few days, you may have missed the start of the tenth anniversary of London Tech Week – a week-long celebration of all things tech. Kicking off the week, Prime Minister Rishi Sunak said that the UK must act quickly to “make it the best country in the word to start, grow and invest in tech businesses”. With the government setting their sights on becoming a “science and technology superpower by 2030”, attracting foreign investment will be crucial in turning this ambition into a reality.  

Despite initial fears about the international attractiveness of a post-Brexit Britain, with some studies suggesting that Britain leaving the EU could lead to a fall of inward investment by nearly a quarter, recent developments suggest that Britain is still a world-leading destination for investors, especially in tech, with recent research by EY discovering that London continues to lead Europe in attracting foreign direct investment in financial services.  

Shortly after concluding negotiations with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Department of Business and Trade (DBT) announced that a number of British tech firms are set to pitch for multi-million-pound deals with the biggest Asian Pacific delegation – who represent funds of over £100 billion – during London Tech week.  

London Tech Week has also seen a boost to the government’s crypto asset ambitions. Despite a recent Treasury Select Committee report which urged the government to treat investment in cryptocurrencies as a form of gambling, venture capital firm Andressen Horowitz - which has about $35 billion in asset under management - announced that it will open its first overseas office in London. They praised UK policymakers for “taking an approach that is uniquely tailored to blockchain and digital asset regulation”.  

While it is arguable that the capital has retained its attractiveness for investment, a major promise of both Vote Leave and Boris Johnson’s 2019 general election campaign, was the ability to “Level Up” the country and rebalance the UK economy. However, despite all this, it appears that the UK is still suffering from same issues, nearly 7 years on, with investment centred around London and the South East. 

In a report published on Friday by the Public Accounts Committee, they argued that the government is not doing enough to support foreign inward investment beyond London. In their report, they found that in 2021/22, 39% of projects supported by DBT were in London and the South East, creating 16,000 jobs in London. This is more than across Scotland, Yorkshire and the Humber and the North West and North East of England combined. For the government, this hardly seems to align with their flagship “Levelling Up” agenda which propelled them to a landslide victory in the 2019 General Election.  

As London Tech Week continues, it seems the governments signals to business that they are open to becoming a tech “superpower” is starting to bear fruit. While this may be a positive sign for the City of London and the tech sector, many are beginning to wonder if this investment will make it to the many exciting tech start-ups operating across the country rather than simply remaining in London.