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UK Urged to Bolster Software Industry Amid European Struggles

 |  March 27, 2024

More than 120 industry leaders are urging the British government to step up its support for the software industry, as European tech companies continue to face challenges in scaling up compared to their counterparts in the United States. The call for action includes proposals for tax incentives and talent visas aimed at improving conditions for software companies in the UK and across Europe.

Europe has long grappled with the issue of nurturing homegrown tech companies to compete on a global scale, with many startups feeling compelled to seek investment abroad as they expand. A recent study cited in a new policy document from industry body Boardwave, as reported by Reuters, underscores Europe’s “dreadful” track record in scaling software companies. Only one software-focused firm, Sage, is counted among Britain’s top 100 publicly-traded businesses, in stark contrast to the dozens in the U.S.

Phill Robinson, founder of Boardwave and a former executive at software giant Salesforce, personally delivered the report to Britain’s technology minister Michele Donelan. He emphasized the urgency of the situation, highlighting the neglect of mid-sized software companies compared to Big Tech firms and well-funded startups. According to Reuters, Robinson stressed that software would underpin the digital economy of the future but lamented its current neglect.

The UK government, however, appears to contest the severity of the assessment. A spokesperson for the Department of Science and Technology refuted the claims, asserting that the UK’s tech sector is thriving and outpacing European competitors. The spokesperson cited the unlocking of billions of pounds to support high-growth firms and encouraged British investors to back promising scale-ups.

Yet, Boardwave’s stance remains firm. Founded in 2022, the London-based organization boasts a membership of over 1,300 software founders, CEOs, and industry leaders from across Europe. Robinson, speaking in an interview, emphasized that a significant portion of the tech ecosystem has been overlooked, advocating for urgent government intervention.

The recommendations put forth in the white paper include expanding talent visa schemes to attract and retain international workers and introducing larger tax allowances for research and development spending. These measures, proponents argue, are crucial for fostering innovation and competitiveness in the software sector, both in the UK and throughout Europe.

Source: Reuters