Now is the time to go big: Back UK Spinouts or Fall Behind

But that alignment is meeting resistance. For all the promising reforms, a critical barrier remains: the UK’s tax environment is not keeping pace with the needs of scaling spinouts.

Just as companies reach the crucial point of expansion, they’re met with a fiscal landscape which too often deters rather than supports growth. Complex regulations, an uncompetitive capital gains framework, and insufficient incentives stand in contrast to the red-carpet treatment offered elsewhere.

It’s a friction point repeatedly cited by founders and investors and a key reason why some of the UK’s brightest prospects are scaling abroad rather than at home. If we want to retain and grow those companies, that needs to change, and quickly.

The case for action is clear. For every 10 high-tech jobs created in the UK, seven more are generated in local services, many of them for low-skilled workers. Innovation doesn’t just fuel scientific progress; it drives inclusive growth.

Councillor Susan Aitken, Leader of Glasgow City Council, reinforced this message during her remarks at the conference:  

Spinouts outside the Golden Triangle raise less capital at every stage, with the biggest gaps in post-seed funding - precisely when companies are trying to scale. These disparities represent missed opportunities for growth across the country.

Another insight: while acquisitions often trigger a move abroad, IPOs tend to keep companies rooted. That’s a powerful signal about how to design for long-term resilience.

We also rely heavily on US venture capital, which, while valuable, introduces risk. There’s a clear need to build a stronger domestic investment base, something reforms like the Mansion House Accord and the recently published Industrial Strategy could help unlock. The £86bn committed in the Spending Review for investment in science and technology during the term of this Government, provides a meaningful start.

But without a corresponding shift in fiscal policy, the UK risks underwriting R&D only for others to capitalise on its commercial potential.

Infrastructure matters, too. World-class lab space is coming online in key clusters, but beyond those hubs we need to ensure scale-up-ready facilities are available for companies poised to grow. In addition, power and digital infrastructure are essential. The confirmation of funding for the Edinburgh supercomputer will start to redress our lagging computer power capacity, particularly when combined with efforts to address the necessary power infrastructure illustrated by announcements of mini nuclear power facilities to be provided by Rolls Royce.

But hard infrastructure is only part of the equation. A healthy housing market is just as critical. When talented people can’t find suitable, affordable homes, the innovation economy suffers. Nowhere is this more apparent than in Cambridge, where an undersupply of housing is starting to undermine the momentum of a globally significant tech ecosystem. When asked, major employers consistently cite housing as a leading constraint on growth, as the top concern for the quality of life experienced by their employees.

The opportunity in the OxCam supercluster can’t be wasted. Speaking passionately on this point, Lord Vallance said: