The technology growth disconnect needs fixed

In the current economic landscape, where growth often feels challenging, the UK’s technology sector remains a rare and brilliant beacon of opportunity. From the financial services of London to the burgeoning AI and quantum hubs of Edinburgh, Glasgow and Manchester, international investors still look at Britain and see a high-quality ecosystem of people, education and innovation.

Yet, there is now a growing disconnect between this raw potential and the government policy required to sustain it. If we are to prevent a ‘flight of talent’ to the USA or the Middle East, we must address the fragmented nature of state support and the increasingly hostile rhetoric surrounding wealth creation.

The UK government’s approach to early-stage technology is currently marred by a lack of coordination. While there are positive elements, such as the British Business Bank’s efforts in the regions and our enduring, sophisticated angel networks, the overarching strategy feels reactive.

Graeme Gunn, private equity veteran and Chairman of Maison Sport

Nowhere is this more apparent than in the recent shifts to Venture Capital Trust (VCT) rules. On the one hand, the Treasury has made positive moves to increase the quantum of cash that can be invested in early-stage businesses. On the other hand, it has lowered tax incentives for individuals who provide that capital.

By reducing income tax relief from 30 per cent to 20 per cent in 2026, the Treasury has demonstrated a fundamental misunderstanding of the link between incentives and capital raising. You cannot expect to fill a bucket while simultaneously poking holes in the bottom. For founders in Scotland trying to build globally relevant businesses, this inconsistency directly affects their ability to secure patient, domestic capital.

At Maison Sport, where I serve as Chairman, we have seen first-hand what it takes to scale a technology business in the competitive traveltech sector. The digital ski lesson booking platform has expanded internationally and raised growth capital across multiple funding rounds, giving us a clear view of how investor confidence, or the lack of it, directly affects scale-up decisions. Success in this market isn’t just about a good idea; it always requires a strong, supportive and stable investor base.

For smaller tech firms, building an international investor base is no longer a luxury; it’s a necessity. International backing provides market validation and secures support from global specialists who understand specific technologies. However, for a UK company to attract global investors, the domestic environment must be welcoming.

Too often, the public debate frames entrepreneurs and investors as problems rather than contributors. This risks making the UK – and Scotland – a less attractive place to build and scale businesses. The irony is that sustainable wealth creation is what enables job creation, productivity gains and long-term tax revenues across society.

Perhaps the most concerning trend is the hollowing out of the AIM market, a sub-segment of the London Stock Exchange. Once envisioned as the natural fundraising home for UK technology fundraising, AIM has seen a mass exodus of pension funds, advisors, brokers and hence a lack of willing investors.

Without access to public capital, successful companies are increasingly being forced to go private or sell out to international private equity and trade buyers prematurely. This isn't just a loss of ‘sovereignty’, it’s a loss of the growth potential that should be fueling our own economy. Private markets are currently proving far more effective than public ones at stimulating investment, purely because their incentive structures better align with growth.

If the UK is serious about reclaiming its position as a global tech powerhouse, a radical shift in perspective is required:

1. Coordinate the ‘Valleys’: Wealth funds must be used as genuine stimulators of UK technology clusters, putting capital in the hands of those with the expertise to invest it.

2. Remove barriers in the Defence Sector: Defence and security should be key areas for future investment. We must strip away the exclusions that prevent UK investors from backing our own engineering prowess in sectors such as aerospace and cyber-security.

3. Close the SME Gap: While global capital is plentiful for businesses with revenues exceeding £100m, smaller companies seeking growth capital continue to fall through the cracks. We need targeted support that doesn't come with bureaucratic red tape in areas such as R&D funding.

Technology is the engine of the modern economy. If the government continues to ignore the vital link between tax incentives and capital flow, they risk stalling that engine just when the UK needs it most. We have the talent, the technology and the heritage; now we just need the policy to match.

Graeme Gunn, private equity veteran and Chairman of Maison Sport