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CEO: The UK tech sector must look across the Atlantic to reach its potential

Gavin Poole, CEO of Here East, London and Fred Schmidt MBE, Managing Director of International Affairs, Capital Factory discuss emerging tech and explains why they believe the UK needs to look to the US if we are to fully exploit emerging tech trends

As the UK faces yet another election period, it can be easy for the country to turn inwards and focus purely on the debates and discussions taking place domestically.

However, we must resist developing tunnel vision and continue to look further afield. Maintaining and nurturing international relationships is of upmost importance – now more than ever. If we are to keep our business landscape flourishing and thriving, we need to ensure that we are making the right connections that will enable our economy to grow, regardless of where our political developments may take us.

The UK may still be suspended in limbo – stuck in a no-mans land between a general election and a looming Brexit deadline – but amidst this, our technology sector is taking the matter into their own hands by pursuing international expansion.

Our tech sector is exceptionally good at opening its doors for international collaboration and community building, with research by the State of Global Expansion Report highlighting this year that 90% of UK tech firms surveyed are looking to expand into new overseas markets – with 43% attributing this desire to uncertainty stemming from Brexit.

This sector is inherently resourceful and innovative, and whilst such uncertainty is far from ideal, it is clearly fuelling the ambition for tech companies to establish a firm presence overseas. With our future relationship with the EU undetermined and with the freedom of movement that comes with EU membership currently in jeopardy, the UK needs to be looking further afield when it comes to international collaboration and expansion.

Nowhere else is the potential for expansion more promising than the US. The bedrock for a cohesive tech community is already well-established between the two countries – evidenced in the fact that this month, new data from London & Partners revealed that US venture capital firms have pumped a record amount of funding, $4.4bn (£3.4bn), into UK companies so far in 2019. Unsurprisingly, fintech companies charming the US investors the most.

For UK tech companies looking to enter the US market, California is the obvious destination, but looking beyond the Silicon Valley state, a crucial market often overlooked is Texas.

Texas provides the ideal ecosystem for those UK companies looking to cross the Atlantic.

In fact, there are already 169 British firms operating 362 subsidiaries in the Houston area alone and this relationship is only set to strengthen; this month, the Greater Houston partnership arrived in London, with a delegate commitment to strengthening the US-UK tech partnership and opening the door for new opportunities between our two nations.

The conditions in Houston in many ways echo that of the UK, creating the right environment for a symbiotic relationship based on shared goals of innovation and growth. Houston is on track for a record-setting year for venture capital investment, with companies based there already having received $486 million in funding so far. Like London, the city is known for its vibrant and diverse talent. With world-class universities, the city is a hotspot for tech-native educated millennials, having been ranked the best city in the country for young entrepreneurs.

The potential of Houston has been coming into focus over the past few years, with Houston-UK trade reaching a peak last year of $7.3billion, a 33% increase over 2017, and Houston now being the fourth busiest gateway for U.S – U.K trade. However, when it comes to our tech sectors, there is so much more to be explored.

International investment and trade is of course a priority – but long-lasting benefits will be felt the most when we connect on a human level. Creating ways that US and UK tech companies can work together, with entrepreneurs sharing ideas and solutions, will create the global technology community there is potential for.

To ensure these valuable connections and networks can continue to thrive in this way, clear pathways for companies to navigate need to be established. The tech and innovation campus is one such structure which assists in the curation of an international tech ecosystem.

Campuses can offer a supportive community for UK start-ups to thrive in and attain vital growth before looking to expand internationally. Such hubs can provide access to programmes, likeminded entrepreneurs and mentors, talent and resources – helping them to put in the groundwork essential for forging a strong pathway into US networks.

Beyond supporting growth, campus architecture creates dedicated innovation communities which provide ideal entry points for companies, once they are good and ready, to expand across the Atlantic into new markets. Businesses can integrate into a pre-existing community of entrepreneurs, allowing them access to the aforementioned talent, resources and local infrastructure. For example, Bird, the e-scooter start-up from Silicon Valley, chose Here East, London’s technology and innovation campus, as its first UK home.

Consolidating this relationship, and interconnectivity between tech communities across the ocean, is precisely what Here East and Capital Factory – the entrepreneurial hub based in Texas – are striving for through their joint partnership.

An international tech ecosystem, focused on a mutually-beneficial relationship between US and UK tech ecosystems, has the potential to drive forward innovation and growth across an array of sectors. The structures and pathways which support this must be a priority across the technology landscape.