The UK innovation ecosystem is lagging behind its American counterpart when it comes to having startups become unicorns and to make up that shortfall the government needs to shift its focus – that is the fundamental idea driving a consultation published by the Treasury department last week.
Figures published in the document, titled Financing growth in innovative firms, are startling: venture capital investments in private businesses in the UK stand at approximately £4bn ($5.2bn) a year, which may seem a lot at first but in fact equates to only about half of the level of investments in the US. Follow-on rounds are rarer for UK-based companies than US-based ones, too – and actually, the remainder of Europe outperforms the UK in third and fourth funding rounds, though the mainland drops below Britain’s performance for later stages.
