Britain is losing ownership of its most valuable technology companies to foreign investors, according to research from the thinktank Common Wealth. The Financial Times calculated that 300 British firms went to foreign buyers, predominantly American, over the past decade. The thinktank's paper, titled We Aren't the Champions, argues that this pattern undermines the UK's ability to build domestic technology giants and serves to enrich overseas investors rather than support British industrial development.
The most prominent example cited is DeepMind, founded in London in 2010, which was sold to Google just four years later. Between 2010 and 2023, the 38 largest venture capital-backed British technology companies were acquired by overseas and European incumbents, the research found. These included businesses at the forefront of artificial intelligence, fintech and biotechnology. The authors, from the London School of Economics, argue that this creates a circular problem: the UK lacks homegrown technology giants capable of acquiring successful startups, but selling those startups overseas perpetuates that shortage.
Common Wealth argues that increasing pension fund investment in UK startups, a policy pursued by Rachel Reeves when she was chancellor, risks making the problem worse. Rather than securing British ownership, additional capital may simply inflate sale prices before companies are sold abroad. The research suggests that the venture capital system prioritises businesses offering lucrative exits over those with broader social value. This has encouraged development of surveillance technologies, from wearables to artificial intelligence chatbots, and exploitative gig economy platforms, the paper claims, concentrating wealth among few rather than delivering widespread social benefits.
The thinktank points to alternative models used elsewhere. India's publicly funded space programme and Ethiopia's state-owned airline demonstrate how sustained public investment can build domestic capabilities, the paper argues. Brazil linked universal healthcare for 215 million people to industrial policy through public purchasing, laboratories and technology transfer. By August 2021, almost three-quarters of Covid vaccine doses administered in Brazil had been produced domestically, the research notes. Common Wealth suggests that directing investment towards meeting social needs, rather than maximising financial returns, could be an engine for economic development and employment.
For UK savers, investors and business owners, the report suggests that current patterns mean wealth generated by British innovation flows overseas rather than building domestic industrial capacity and employment.