Is the UK exporting all it’s innovation?
We spent the day at CWTEC26, Cambridge Wireless's annual event, listening to the people building the UK's semiconductor industry. Charles Sturman from TechWorks opened with the numbers, and they're worth recounting. UK semiconductor companies generate around £11bn in direct revenue, about 2% of the global market. Three hundred companies work directly on chip design and manufacture. Another four hundred are doing semiconductor-adjacent development. Roughly 27,000 people are employed in the sector, and it's backed by a strong university research base and a startup and spinout culture that keeps producing new companies worth watching.
None of that is small. But it's also not where it could be, and the reason isn't a lack of ideas.
The UK is great at the early part of the journey. It's where a lot of the world's most interesting semiconductor and photonics IP still gets invented, in university labs in Cambridge, Manchester, and beyond, then carried out into spinouts by people who've spent a decade or more on the underlying science. Paragraf is a good example. Their graphene process came out of research at the University of Manchester in 2004, and it took until 2018 for that discovery to become a company, and years more to build the manufacturing capability to actually produce anything at volume. Their COO - Tony Pearce talked candidly at CWTEC about how much slower and more expensive the build was in the UK compared to somewhere like the US, where capital and complementary companies are easier to find.
That's the pattern we keep seeing. A technology survives years of research, funding rounds, and the genuinely hard work of turning a lab discovery into something manufacturable. By the time it's close to contributing to that £11bn figure, an enormous amount has already been spent getting it there. Custom Interconnect's John Boston put the wider problem well when he talked about the UK's tendency to invent the technology and then treat manufacturing as something beneath it, work that gets sent elsewhere once the hard science is done. The result is that most of the value created in UK labs ends up being captured overseas, by whoever picks up the manufacturing and the commercial relationship once the risky part is finished.
You can see the same shape in SCI Semiconductor's CHERI work, for different reasons. Haydn Povey highlighted that memory safety vulnerabilities were first identified in 1972 and are still one of the most common routes into modern systems, costing an estimated $10.5 trillion a year globally, according to McKinsey. CHERI, developed through years of UK university research and Ministry of Defence and GCHQ-backed funding, closes off most of that risk at the architecture level rather than patching it after the fact, and Google's own testing found it improves performance rather than costing anything for the added security. With the EU's Cyber Resilience Act now in force and the UK government committing £26m to CHERI adoption, the timing for this kind of technology is about as good as it gets. It's a strong illustration of just how much can go right on the fundamentals of a UK deep tech story, decades of research, real funding, strong regulatory tailwind, and still leave the hardest part of the journey, getting it adopted at scale, still ahead.
That's really the point. None of this is about the UK lacking good technology. It has plenty. The risk sits in the last stretch, after the science works and the manufacturing is built, when what's needed is a clear proposition and a pipeline that turns capability into adoption. Get that wrong, or leave it too late, and a technology that's already cost years and millions to develop can lose momentum right at the point it was supposed to start paying that investment back.
Given how much has already gone into a technology by the time it reaches that stage, treating the commercial side as an afterthought is the most expensive mistake a UK deep tech company can make. It's usually the smallest remaining piece of the journey, and the one most likely to determine whether everything before it was worth it.
This is the part of the journey we work in. Not manufacturing, and not the underlying science, but making sure the story, positioning, and pipeline are in place before a technology needs them, so the UK doesn't do the hard part brilliantly and then lose the value at the finish line. If that gap sounds familiar, it's worth a conversation.