Brunel versus Putin: next steps for UK tech sector need to be transformational

This is a guest blogpost by John Bates, CEO of SER Group.

A short time ago, I’d have cautiously suggested long-term investment and a shift in UK higher education as keys to regenerating the native tech industry. Recent events though have convinced me there’s a real opportunity for the UK to foster a new wave of tech leaders like Mike Lynch and global-impact tech builders like Nobel Prize winner Demis Hassabis. And whether we like it or not, this moment is defined by Trump, Chinese AI, and Moscow.

A first wave of Brit tech success that has receded

First, a brief recap. Aside from Sage—and until recently, ARM—the UK has sold off nearly all its homegrown tech firms in hardware, networking, and software, like Demis Hassabis’s 2014 sale of DeepMind. This is often blamed on UK investors favouring property and finance over tech, unlike their US counterparts. But for the nation of the Industrial Revolution, Brunel, and Turing, this reluctance to back homegrown tech isn’t a great look.

For a time, a counter-trend emerged from UK universities. At Cambridge, I saw this firsthand as visionaries like Andy Hopper, Hermann Hauser, and Mike Lynch led a wave of tech firms. These companies pioneered key innovations, offering a glimpse of what a thriving UK tech ecosystem could look like.

This was promising—Forbes notes at least 35 U.S. billionaires earned PhDs before launching businesses, and UK universities rank among the global top ten. Yet, while academics like Andy were once free to pursue their spin-off ideas, the rules have since changed, making it far more difficult to commercialise university-born innovations in the open market. If institutions claim a third of your equity upfront, it’s easy to see why many entrepreneurs opt out.

It’s been tough for second-wave UK Mike Lynches to break through, largely due to a lack of government support to turn academic expertise into real impact. In the US, the government awarded $100 million last year to 18 universities to “accelerate and expand research into products and services that benefit the nation.” Post-Brexit, many expected similar UK initiatives—but they’ve yet to materialize.

However, a shift in government priorities could mark a turning point. Cutting red tape and accelerating data centre construction signals a more pragmatic approach to digital infrastructure, while aiming for one in ten civil servants in digital roles signals real tech investment. The UK’s AI leadership push will deliver £14 billion in private investment and 13,250 new jobs under the national AI Action Plan.

This is a step forward—but I still have doubts. While initiatives like the long-overdue Oxford-Cambridge rail link are welcome, they don’t address deeper issues: the City’s short-term focus and restrictive HE spin-off rules. The UK’s great Northern industrial hubs should be part of this vision too.

But, enter stage left, the forces reshaping everything: the US, China, and Russia.

Trump is unraveling post-War norms, forcing Europe to rethink its US ties and secure its own data and systems.

China is now a true tech power, excelling in AI and fundamental research of the type the US (think, DARPA) used to do so well, from quantum processors to advanced AI agents.

Putin’s push toward conflict makes defense tech vital, while a rearming Europe will be looking to leverage technology as much as possible.

A changing world opens up new UK options

Put this together, and it’s clear the UK must rethink and rebuild a strong native tech base. Am I happy that geopolitics is driving this? No. But if a revived UK defense sector sparks AI-driven innovation and cutting-edge R&D, we should embrace it.

So, Keir Starmer, tear up the rule book and launch a new generation of Mike Lynches and Andy Hoppers—without them, the UK risks becoming an open-air theme park, hardly the legacy Victorian giants like Brunel would have envisioned.