Thursday 12 June 2025 3:33 pm
On day 4 of London Tech Week attention turned to deeptech, writes Russ Shaw
In the second half of London Tech Week, the focus shifted from the strengths of London today to the promise of tomorrow.
Today I had the pleasure of visiting the Royal Aeronautical Society, which embodies the rich history of British innovation while keeping one eye on the future. Over the course of this week, there has been a natural focus on the quick and immediate wins – but this should not come at the expense of strategic, long-term thinking.
London has a long history of innovation, stretching from the Industrial Revolution to now. With Deeptech, it’s possible to glimpse what the next step of that journey might look like.
Deeptech: Shaping the Future of the UK Economy
Deeptech, encompassing transformative technologies such as AI, quantum computing, and advanced materials, is poised to redefine the UK’s economic landscape. These fields require significant research, development, and investment, but the potential rewards are immense.
Deeptech companies often face unique challenges, including long development timelines, complex engineering hurdles, and the need for substantial capital. However, the potential market value of these technologies is undeniable, offering solutions to global challenges and creating new industries.
The development of intellectual property (IP) is central to deeptech. IP-intensive industries historically have demonstrated accelerated growth compared to the national average. This leads to the creation of high-paying jobs, boosting the UK’s economic competitiveness on a global scale. Securing our position as a hub of innovation and scientific excellence is a long-term investment that will benefit generations to come.
The UK’s Deeptech Advantage
The UK possesses a unique set of advantages that position it at the forefront of the deeptech revolution. A world-class university system, a vibrant tech ecosystem, and government support are key components of this advantage.
The UK consistently attracts significant venture capital (VC) funding in the deeptech sector. Data from recent reports show that the UK routinely attracts more than £5 billion annually in VC funding, driven partly by its exceptional universities and academic research. These universities are the breeding ground for innovation. University spinouts are significant contributors to the deeptech sector.
Global investors are increasingly recognizing the strength of the UK’s deeptech ecosystem. Recent data reveals that a growing percentage of deeptech deals involve international investors, demonstrating growing confidence in the UK’s academic and innovation landscape.
Addressing the Challenges: What’s Needed?
While the UK has a strong foundation, overcoming certain obstacles is essential to maximize the potential of deeptech. Issues like antiquated legal frameworks and funding dynamics have the potential to limit growth.
Investment in research and development, coupled with streamlined regulatory processes, is crucial. The allocation of research and development funding needs careful consideration to ensure the most promising projects receive the support they need. Planning regulations have historically hindered the development of essential infrastructure, like data centers, which are vital for deeptech advancements.
Deeptech is not a short-term venture, and investment strategies should reflect this fact. Deeptech ventures often require longer funding cycles than other tech investments. Government initiatives like the National Wealth Fund and the recent investment in the Edinburgh Supercomputer, along with the Regulatory Innovation Office, are positive steps towards addressing funding shortages. These measures support the long-term vision.
Future Trends in Deeptech
Deeptech is constantly evolving, and several key trends are expected to shape its future:
- Artificial Intelligence (AI): Continued advancements in AI, including machine learning and natural language processing, will revolutionize various sectors, from healthcare to finance. The UK is already a leader in AI research.
- Quantum Computing: Quantum computing has the potential to solve problems currently unsolvable by classical computers. The UK is making significant investments in quantum computing research and development.
- Biotechnology and Life Sciences: Innovations in areas like gene editing, personalized medicine, and drug discovery will transform healthcare. The UK is a global hub for biotechnology.
- Sustainable Technologies: Deeptech will play a crucial role in developing sustainable solutions to combat climate change. This includes renewable energy, carbon capture, and green materials.
- Advanced Materials: The development of new materials with enhanced properties will drive innovation in various industries, from aerospace to construction.
Did you know? The UK’s deeptech sector is responsible for creating thousands of jobs and contributing billions to the economy each year. This number is expected to grow exponentially in the coming years.
Policy Implications and the Path Forward
The UK government must continue to support the deeptech sector through strategic policies. Such as investing in research and development and ensuring a supportive regulatory environment. Addressing short-term wins while keeping an eye on the horizon will be key to unlock the potential in deeptech.
The UK must create the conditions to attract both internal and external investment. Capital Gains Tax and other financial regulations must be carefully balanced to not stifle innovation.
By capitalizing on its strengths, the UK can solidify its place as a world leader in deeptech. The potential rewards for the UK economy are significant: increased investment, scientific breakthroughs, and a lasting legacy of innovation.
Pro tip: Stay informed about the latest developments in deeptech by following industry publications, attending conferences, and connecting with experts in the field.
FAQ: Deeptech in the UK
Q: What is deeptech?
A: Deeptech refers to transformative technologies that offer breakthroughs to solve global problems, requiring significant research and development.
Q: What are the main challenges facing the UK’s deeptech sector?
A: Challenges include funding issues, antiquated legal frameworks, and short-term investment approaches.
Q: How is the UK government supporting deeptech?
A: The government is investing in infrastructure, providing funding, and establishing regulatory bodies to foster growth.
Q: What are the key future trends in deeptech?
A: Key trends include AI, quantum computing, biotechnology, sustainable technologies, and advanced materials.
Q: How can I get involved in the deeptech sector?
A: Explore educational programs, seek internships, network with industry professionals, and stay informed about the latest innovations.
Russ Shaw CBE is the founder of Tech London Advocates & Global Tech Advocates
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