Nandini Roy Choudhury, writer
Brief news
- Warren East, former CEO of Arm, criticized the UK for failing to effectively commercialize its technology businesses globally, highlighting a need for a shift in investor attitudes.
- He noted that many successful UK firms relocate or list overseas due to challenges in achieving global relevance, leading to a loss of innovation potential.
- East emphasized the importance of fostering a greater risk appetite among UK investors and suggested regulatory changes to encourage more investment in high-growth technology companies.
Detailed news
CAMBRIDGE, England— A former CEO of British chip design firm Arm stated on Tuesday that the United Kingdom is not effectively commercializing technology businesses on a global scale and requires a paradigm shift among the investor community to succeed on the global stage.
Warren East, the former CEO of Arm from 1994 to 2013, stated in a keynote address at Cambridge Tech Week that there have been criticisms that the United Kingdom’s lackluster development and low GDP per capita rates are a source of national “embarrassment.”
He further stated that firms that achieve scale in Britain frequently either relocate from the country or list overseas in countries such as the United States due to the challenges associated with achieving global relevance.
East informed the audience at Cambridge Tech Week, “I believe we have a great deal to offer in terms of innovative technology based in the United Kingdom.” Nevertheless, he emphasized, “We don’t typically achieve the number of global businesses that that promise would imply.”
It is worth noting that East was previously the CEO of Rolls-Royce, a major aviation engineering company in the United Kingdom. At present, he serves as a non-executive director on the board of Tokamak Energy.
East stated that Britain “must address commercialization,” implying that an excessive amount of innovation is generated in the United Kingdom but is subsequently exported to other regions throughout the globe.
East stated that there is “sadly a common story of all the wonderful stuff that gets made in Britain and then gets commercialized and exploited elsewhere.” He also stated that he does not possess a “silver bullet” solution to resolve the issue. However, he recommended that the United Kingdom should foster a greater willingness to take risks in order to provide support to high-growth technology companies.
East stated, “We are frequently informed that the issue is not with the startup aspect, but with the scale-up aspect.” He further elaborated that the United States has significantly more extensive capital resources. “The risk appetite of investors in the United States is greater than that of investors in the United Kingdom,” he stated.
East observed that the British entrepreneurial community and venture capitalists have advocated for a modification to capital market regulations that would facilitate increased investments from pension funds into businesses and “increase risk appetite” in the United Kingdom.
East informed the Cambridge event delegates, “I believe we can anticipate a greater amount of that in the future.” Nevertheless, he emphasized that “Businesses cannot guarantee that this will occur, and they cannot wait for the regulations to be altered.”
Arm, whose chip architectures are present in the majority of the world’s smartphone processors, was listed on the Nasdaq in the United States last year. This move dealt a significant setback to the London Stock Exchange’s aspirations to host additional technology debuts in the United Kingdom.
SoftBank, a Japanese technology corporation, continues to hold a majority stake in the organization.
Source : CNBC News
