Britain Does Not Have an Innovation Problem. It Has a Commercialisation Challenge.

Britain Does Not Have an Innovation Problem.
It Has a Commercialisation Challenge.

Reflections from techUK’s 2026 Tech and Innovation Summit

Britain has spent decades proving that it can produce extraordinary ideas. The harder question is why so many of those ideas become major businesses, generate jobs and create industrial value somewhere else.

This was the central challenge at techUK’s Tech and Innovation Summit in London on 3 November. Across discussions involving government, universities, investors and technology founders, there was considerable agreement about the UK’s scientific strengths. There was less certainty about how to translate those strengths into lasting commercial success.

The distinction matters. Having a world-leading research institution is an achievement. Building a world-leading company around its discoveries is an entirely different proposition.

And if Britain is serious about reindustrialisation, this is where the debate needs to move.

From invention to economic value

Chris McDonald MP, Minister for Science, Innovation and Investment, opened with a clear assessment: Britain is exceptionally good at invention, but has not been ambitious enough about scaling the businesses that emerge from it.

His framework followed four stages: discovery, building, commercialisation and scale.

The UK has considerable strengths in the first, from leading universities to advanced research in quantum, AI, semiconductors and photonics. But a scientific breakthrough does not create economic value automatically. It must become a commercially viable product, find customers, attract investment and develop into a business capable of competing internationally.

The minister’s argument was not simply about keeping companies British. It was about retaining the skills, supply chains, headquarters, tax revenues and strategic decisions that accompany successful businesses.

The government’s renewed support for the British Business Bank and National Wealth Fund, together with proposed tax incentives for founders, provides additional instruments to support that ambition.

Yet funding alone cannot solve the problem.

A company can have remarkable technology and sufficient capital but still fail because it cannot find a customer willing to adopt it.

That point surfaced repeatedly throughout the day.

Is Innovate UK changing how government backs businesses?

One of the more consequential contributions came from Gary Cutts, Executive Director for Digital and Technologies at Innovate UK.

He described a shift away from supporting innovation primarily through individual project competitions towards a more selective, business-centred approach.

Innovate UK’s new Velocity model is intended to identify high-potential businesses, concentrate support where Britain has competitive advantages and maintain relationships throughout their development.

This represents a potentially significant change.

For too long, promising businesses have navigated a fragmented landscape of grants, accelerators, competitions, public bodies and investment programmes, sometimes with little continuity between them.

Supporting a company’s long-term commercial journey rather than a series of disconnected projects makes considerable sense.

However, greater selectivity also creates a responsibility. Identifying potential winners is difficult, and government must avoid building a system in which established relationships become more valuable than the quality of emerging innovation.

The challenge is to combine strategic focus with openness to companies and technologies that do not yet have a recognised profile.

The university spin-out problem is more than equity

The discussion with Kirsty Lloyd-Jukes of Stateful Robotics, Dr Gizem Acar Tekin of Photarix and Dr Rob Thompson of UCL illustrated how much progress universities have made in commercialising their research, and how much remains unresolved.

Lloyd-Jukes described the transformation of Oxford’s entrepreneurial culture over the past decade, supported by greater availability of venture capital and organisations such as Oxford Science Enterprises.

But she also identified something that receives less attention than investment: the specialist commercial expertise required to turn a scientific discovery into a company.

Researchers are not necessarily entrepreneurs. They may have developed a breakthrough technology without knowing how to construct a commercial proposition, build a management team or persuade a customer to buy it.

Acar Tekin’s experience at Lancaster University highlighted another challenge: geography.

Outside the established Oxford-Cambridge-London ecosystem, companies can find themselves having to demonstrate not only the quality of their technology but also the credibility of the research environment from which they emerged.

University equity arrangements remain another point of tension. Lloyd-Jukes and Acar Tekin described the potential deterrent effect of excessive institutional ownership, while Thompson rightly cautioned that universities have legitimate research costs and that international comparisons must account for different funding and royalty arrangements.

The wider lesson is that commercialisation requires an ecosystem that combines scientific excellence, founder incentives, experienced management and access to capital. No single reform can substitute for that combination.

Paul Newman’s Oxa: a lesson in finding the market

Perhaps the clearest illustration of the distinction between technological achievement and commercial success came from Professor Paul Newman, Founder and CEO of Oxa.

Born from Oxford’s autonomous-vehicle research, Oxa initially pursued a broad vision of universal autonomy.

Newman explained how the business subsequently sharpened its commercial focus around industrial mobility, particularly the movement and towing of goods in ports, airports and logistics facilities.

His description of that strategy was wonderfully simple: “We tow.”

Behind those two words is a profound commercial lesson.

Industrial logistics operators already spend significant sums moving goods. Their vehicles exist, their operating costs are measurable and their requirements are clear.

Rather than persuading customers to invest in technology because it is revolutionary, Oxa can demonstrate how autonomy might improve an operation customers already need to perform.

Newman also highlighted the difficulties of working with large corporations: prolonged procurement processes, changes in leadership, shifting strategies and the risk of developing technology that becomes dependent on another company’s product roadmap.

His remarks raised an uncomfortable question for British industry.

If domestic businesses are slower to adopt British-developed innovations than overseas customers, how much of our economic potential are we leaving unrealised?

Oxa’s SHIFFT joint venture with Dubai Future Foundation illustrates another important distinction. International expansion need not mean abandoning Britain. Overseas partnerships can create global commercial routes for technology developed and scaled from a UK base.

The UK should be aiming to export successful technology and industrial capability, rather than seeing the overseas sale of its promising companies as the inevitable route to success.

Building at home does not mean building everything

The subsequent discussion on Britain’s industrial base highlighted the practical meaning of sovereign capability.

Elizabeth Patterson of the UK Semiconductor Centre emphasised that global semiconductor supply chains are inherently international. Britain’s advantage lies in strengthening areas where it already possesses specialist capabilities, including compound semiconductors and photonics.

Bonnie Tsim of ATLANT 3D offered a complementary perspective, explaining why the UK remains attractive to international deep-tech businesses seeking access to capital, research and industrial expertise.

Advanced manufacturing technologies could also enable Britain to undertake activities that would previously have been uneconomic or technically difficult.

The question is not whether the UK can become entirely self-sufficient. It is whether it can retain strategically important capabilities, increase domestic value creation and build stronger connections between its regional industrial strengths.

And successful inward investment should be part of that ambition. Foreign-founded companies choosing to develop research, manufacturing and commercial operations in Britain can contribute just as meaningfully to domestic industrial growth.

What government and industry must now deliver

There was a clear willingness throughout the discussions to recognise progress. Britain has improved its university spin-out ecosystem, developed new investment institutions and begun to align industrial strategy more closely with science and technology.

But there is a risk that the country’s enthusiasm for innovation continues to exceed its appetite for implementation.

The next stage requires three shifts.

From funding innovation to creating markets for it. Government procurement, particularly in strategically important sectors such as defence, can provide the first customer that allows a business to demonstrate commercial value. Large private-sector organisations must also play their part.

From disconnected initiatives to sustained commercial pathways. Research support, access to investment, regulatory engagement, industrial partnerships and export assistance need to operate as parts of a continuous journey.

From industrial strategy as policy to industrial strategy as delivery. Companies need predictable regulations, investment confidence, infrastructure, skilled people and customers prepared to make decisions. Policy continuity across changes of government will matter as much as individual announcements.

We should also be careful not to confuse sovereign capability with protectionism. Britain will strengthen its position through international investment, cooperation and access to global markets, provided those relationships help build and retain meaningful capabilities at home.

Larkspur’s view: the missing link is commercial execution

At Larkspur International, we work where government meets business growth. Much of that work involves navigating the distance between what governments want to achieve, what businesses are capable of delivering and what is required to turn an opportunity into a commercial reality.

The discussions at techUK reinforced a central observation from our own work: often the technology already exists, the policy priority is clear and the potential customer can see the value. Yet progress becomes trapped between different institutions, procurement processes, investment requirements and commercial decision-makers.

These barriers are rarely solved by another strategy document.

They require practical engagement, clear accountability, better coordination and organisations prepared to make commitments.

Britain has the research institutions, entrepreneurs, technology and increasingly the financial instruments to build globally competitive industries.

The next measure of success should not simply be how many new technologies we invent, or how much public funding we allocate.

It should be how many become products, win customers, build meaningful operations and create lasting economic value.

Britain has demonstrated that it can invent the future. It now needs to demonstrate that it can buy it, build it and sell it.