The Confederation of British Industry (CBI) has launched a campaign to bolster support for the UK’s most innovative high-growth tech companies so they can transform from $1bn unicorns to $10bn “decacorns”.
The campaign, known as Project Decacorn, was announced by CBI president Brian McBride on the evening of 27 March to an audience of tech business leaders and entrepreneurs at Mansion House in the City of London.
“The UK is one of only three countries around the world with more than 100 unicorn companies – those valued at $1bn. I’m spearheading a programme to transform the UK’s great $1bn unicorn companies into ‘decacorns’ $10bn companies this decade, that can unleash growth – and jobs – right across the country,” he said.
“I’m certain that in the UK, if we pull together – government and business, business and business – we’ve got what it takes to create not just a UK Silicon Valley, but a global growth powerhouse.”
He added that the UK is the only country besides the US and China to have a tech sector worth $1tn, and that its fintech sector alone is worth $11bn, or 10% of the global market share: “It’s our secret weapon – the spark plug to set off the full power of the City of London and the financial services sector in the global race for growth.”
While CBI has not shared any details on what it sees as blockers to further growth for unicorns and how to overcome them, it confirmed that there will be a separate announcement on policy recommendations sometime later this year, and that for now the CBI is set to assess which regulations are holding back the UK tech sector.
The campaign launch follows the UK Spring Budget announcements in mid-March, in which the government outlined its plan to transform the country into a “science and technology superpower”.
It includes investing £2.5bn in quantum computing; creating new funding avenues for research and development (R&D) intensive businesses through, for example, updated tax relief measures and opening up pension funds for use in tech investments; and introducing a £1m annual award for the best British AI research, known as the Manchester Prize.
The previous Autumn 2022 Budget – which Hunt vowed will help to make the UK the next Silicon Valley – also saw the government commit to increasing overall R&D spend to £20bn a year by 2025.
While the UK is investing $7.2bn into AI – making it the third highest investor globally, and fourth if the European Union is counted as a bloc – the US and China are investing $71bn and £34bn respectively.
“The prime minister and chancellor announced ambitious plans to turn the UK into the next Silicon Valley. We are fully behind their goal in creating a more innovative and prosperous economy and are ready to work with government in turning this dream into a reality,” said CBI’s deputy director for digital and the Project Decacorn lead, Susannah Odell.
“In the US, they are already creating a new generation of decacorns – businesses that scale to $10bn in value. We at the CBI believe the UK can step up and match that. We want to knock down the blockers holding them back and find smart solutions to boost their success in partnership with government. That’s what our project is all about.”
In support of its ‘technology superpower’ plans, the government also announced an international tech strategy in March 2023 to promote the UK abroad by, for example, deepening technical cooperation with allies and including technology measures in any new trade deals.
In its last report before shuttering, Tech Nation said that UK technology scaleups have already generated $583bn in value since 2014, and could further quadruple in value by 2032 under the right conditions.
To achieve a whole-sector valuation of around $4tn, Tech Nation recommended plugging patient capital into all stages of company growth, rather than just the early stages; rethinking talent gaps, particularly by placing an emphasis on opening up access tech sector opportunities to all people interested; and prioritising “value realisation”.
“Tech leaders in the UK must develop a Silicon Valley-like sense of exit intentionality, capital and talent must continue to be efficiently recycled through the ecosystem to create additional value, and knowledge must be deepened and shared around late-stage growth,” it said.