The UK’s tech sector is brimming with potential, but without decisive action, we risk losing the ability of our best start-up firms to scale up to the next level, and with it their transformative power for the economy as a whole. FGF’s latest report Rebuilding the Nation 04: A Mountain to Scale outlines how these high-growth firms can drive economic growth, tackle regional inequality, and deliver on the new Government’s national missions.
The UK stands at a pivotal moment. With a £1 trillion tech sector, 43 unicorn companies, and global giants like Amazon and Google continuing to invest, confidence in Britain’s innovation ecosystem remains high. Labour’s vision for economic transformation, paired with Pat McFadden’s call this week to “innovate in government to support innovators in business,” reinforces the potential for a brighter future.
Yet, while the UK is a global leader in fostering start-ups, scaling those businesses into world-class players is an enduring challenge. Phill Robinson, CEO and Founder of Boardwave – who, along with the BVCA, have partnered with FGF on this report – captures this frustration: “It takes much longer to scale a UK business from $10-100m than it does in the US. Currently, a good US software company can scale to $100m revenue in 10-12 years, a great one in 6-8. Shockingly, in Europe it takes 15.5 years, and the UK takes even longer at 17 years.” The potential is there, but significant barriers are slowing progress.
Why scale-ups matter
Scale-ups, fast-growing businesses with proven models and market traction, are key to the UK’s economic renewal. They make up less than 1% of UK businesses but account for over 50% of SME output, creating jobs, driving innovation, and contributing £1.2 trillion to the economy. Many of these companies also align well with the new Government’s missions, from tackling climate change to improving public safety and modernising the NHS.
Solutions to unlock potential
A Mountain to Scale outlines a bold and practical set of 15 recommendations to address the barriers that hold scale-ups back. Central to the proposals is a commitment to ensuring that scale-ups have the resources, environment, and support they need to thrive across four key areas: money and markets, place, people and governance.
Late-stage funding remains one of the most significant hurdles, with the UK facing a £15 billion annual funding gap for scale-ups – most of which is at the later stages of a company’s growth trajectory. To address this, the report calls for the new pension ‘megafunds’ announced by the Chancellor last week to be designed so as to enable investment into high growth firms right across the UK, as well as in large-scale infrastructure projects. . Alongside this, the report advocates reforming tax relief schemes, evolving the Enterprise Investment Scheme into a dedicated Scale-Up Investment Scheme to provide targeted support for businesses scale-up companies, and especially knowledge-intensive tech firms..
Regional disparities in growth opportunities also require urgent attention. Scale-ups thrive in ecosystems where talent, infrastructure, and investment converge, yet many regions outside London and the South East remain underserved. To address this, the report proposes introducing a statutory “Scale-Up Duty,” embedding the prioritisation of high-growth businesses into Local Growth Plans. Universities and accelerators should also be strengthened to create innovation pipelines that connect ideas to funding and infrastructure, especially in underserved regions.
Building strong leadership and addressing skills shortages are equally critical. Scaling a business is as much about people as it is about products. Founders often face challenges transitioning from leading start-ups to managing scaling firms. The report recommends launching a National Scale-Up Leadership Network to provide mentorship and peer support, building on existing programmes, helping founders navigate the complexities of scaling their businesses. At the same time, addressing the UK’s skills gap in AI, data science, and STEM is imperative. Expanding AI upskilling programmes and investment in digital training would provide the talent pool necessary to sustain high-growth firms.
Finally, scale-ups must be fully integrated into the government’s mission-led framework. Labour’s five missions offer a blueprint for national renewal, and scale-ups are integral to delivering them. Aligning policies with these missions and embedding scale-ups into delivery and evaluation frameworks would ensure they are not just beneficiaries but key drivers of national progress.
A call to action
The UK is at a crossroads. Global confidence in Britain’s tech ecosystem remains strong, but without decisive action, we risk losing the businesses and innovations that could define the next era of economic growth and national renewal. As the report concludes, “By removing the barriers and giving scale-up firms the conditions to soar, we have the chance to turbocharge our economy, create jobs, and put the UK at the heart of the global tech revolution.”
The time to act is now. Let’s seize this scale-up moment.
