Recommendation 18

The UK excels at generating early-stage research and innovation but falls short in translating this strength into the growth and scaling of high-tech domestic companies. UK-developed innovations are too often commercialised overseas, with high-growth firms in strategic sectors such as quantum and space forced to go overseas to scale. DeepMind is 41 perhaps the clearest example: had the UK been able to provide the scale-up investment required, the company might not have been sold to Google, and the UK would not need to rely on overseas firms for its generative AI capabilities. This long-standing issue has become urgent as geopolitical shifts, combined with leaps in technology, focus attention on the question of technology sovereignty. It is unclear what the government’s objectives are in relation to capital markets and the commercialisation of innovation: whether it seeks to retain and scale leading companies domestically or is content for them to be acquired overseas, provided the UK shares in the returns. (Conclusion, Paragraph 79)