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\t\tImperial College London has partnered with Bruntwood SciTech to deliver a \u00a3200m project in the west of the capital.\t<\/p>\n
To solve the UK\u2019s struggle to scale its world-class startups, we must unlock the nation\u2019s vast pension funds for venture capital investment to fuel domestic growth and ensure technological sovereignty, says Dame Anne Glover<\/p>\n
This week, as leaders gather at Mansion House to celebrate British innovation, we must confront a hard truth: the UK is world-class at innovation, but it\u2019s still struggling to scale the companies which are started here.\u00a0<\/p>\n
The UK is at the forefront of a new industrial revolution \u2013 not driven by steam, but by silicon, software and artificial intelligence. AI alone could deliver \u00a345bn in annual savings through public sector modernisation and raise productivity by 1.5 percentage points per year. It\u2019s not just a technology story; it\u2019s an economic imperative.<\/p>\n
But innovation needs fuel. That fuel is capital \u2013 patient, risk-embracing capital that turns prototypes into payrolls. Here is the paradox: Britain has one of the largest savings industries in the world, with insurance and pension assets<\/a> per capita around seven times the global average. Yet, just 0.007<\/a> per cent of UK and Irish pension assets are invested in venture capital \u2013 that\u2019s less than one pound in every 14,000. In North America, that figure ranges from 0.5 per cent to two per cent \u2013 that is $1 in every $50-200. Our savers are long-term investors, locked into low-return, short-term assets. The opportunity cost is enormous.\u00a0<\/p>\n We must strengthen the ladder between starting up and the long-term prosperity of our companies. And we can. I propose three practical steps to unlock the power of pension capital and keep our growth companies on UK soil.<\/p>\n First, we must add a rung of later-stage capital to the ladder. I invite every pension trustee in the Square Mile and beyond \u2013 to consider allocating just 0.5 per cent of assets to venture capital. That\u2019s a 70-fold increase from today\u2019s levels, but still well within normal risk tolerance thresholds. For any single scheme, it\u2019s prudent, and for the nation\u2019s growth engine, it\u2019s rocket fuel.<\/p>\n This is not a call for mandation. Government should simply ask the Pension Regulator to set a clear, transparent return objective for long-term savings products. With clarity, trustees can choose the tools. Venture capital becomes a fiduciary choice, not a political gamble.<\/p>\n Evolve the Mansion House Compact<\/p>\n Second, we must evolve the Mansion House Compact into a deeper partnership for frontier tech. That means faster knowledge-transfer from labs to ledger, more allocations to venture, better regulatory pathways like the Innovative Licensing and Access Pathway<\/a> (ILAP), and less red tape along the way.<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tRachel Reeves\u2019 winter fuel raid to raise \u00a31.3bn less than hoped<\/a><\/p>\n Third, I urge industry leaders to become customers of our own brilliance. If your bank needs cybersecurity, pilot British deep tech first. If your asset manager seeks ESG analytics, test the AI built in Edinburgh before importing off-the-shelf solutions.<\/p>\n We\u2019ve seen what success looks like. OrganOx, a spinout from Oxford, was seeded by the Royal Society Enterprise Fund and recently acquired for $1.5bn to lead a new organ transplantation division from the UK. PolyAI, born in Cambridge, now powers conversational AI from National Savings & Investments to Las Vegas casinos. Quantexa, founded in London, raised its Series F at a $2.6bn valuation and is pioneering Decision Intelligence globally. These are not unicorn myths, they are blueprints.<\/p>\n Every successful scale-up sparks a chain reaction: high-skilled jobs, resilient supply chains, national security, and wealth that recycles into the next wave. Success compounds.<\/p>\n