A new report and industry voices warn that the UK is losing high-growth science and technology companies to other jurisdictions, highlighting structural problems in funding, incentives, and commercialisation that may be pushing firms to relocate.
A new report and industry voices warn that the UK is losing high-growth science and technology companies to other jurisdictions, highlighting structural problems in funding, incentives, and commercialisation that may be pushing firms to relocate.
A report published this month and reactions from industry groups have sounded an alarm over the United Kingdom’s ability to keep high-growth science and technology companies headquartered on home soil. The analysis, highlighted in a Chemistry World feature, says that a pattern of relocations and overseas listings is evidence that structural weaknesses in the innovation ecosystem — including access to capital, tax incentives, regulatory friction and talent pipelines — are prompting companies to move abroad.
The report, summarised in a Chemistry World article, argues that the UK is increasingly a place where companies are founded and conduct early-stage research but are then encouraged — or forced — to move their legal headquarters, primary stock market listings or major operations overseas as they scale. That trend, the report cautions, risks eroding the long-term economic and scientific benefits of domestic innovation, including jobs, high-value supply chains and tax receipts.
Industry groups echoed the report’s sense of urgency. The BioIndustry Association (BIA) and other trade bodies have said in recent statements that the UK needs to rethink incentives and capital structures to prevent promising science companies from being acquired or listing abroad. See the BIA’s public commentary for context: BioIndustry Association.
Retaining high-growth science companies matters for several reasons. First, companies that remain headquartered in the UK are more likely to employ researchers, technicians and managers domestically, supporting local clusters and supply chains. Second, the tax revenue associated with corporate profits, capital gains and employee income tends to accrue to the country in which the firm’s legal base and corporate governance are located. Third, long-term reinvestment in facilities, manufacturing scale-up and clinical development creates enduring capacity that strengthens resilience and national security in sectors such as pharmaceuticals, chemicals and advanced materials.
Policy-makers and analysts regard the stage at which a company scales — when it needs significant growth capital, regulatory navigation and market access — as a critical juncture for deciding where to base operations and where to list publicly. If those needs are met more easily outside the UK, domestic economic benefits can be drained away.
Interviewees and the recent report identify several recurring drivers behind relocation and overseas listing decisions. These include:
Quantifying the precise scale of relocation is challenging because companies move for complex, multifactor reasons and public datasets capture only some aspects of the phenomenon (listings, acquisitions, legal domicile). However, multiple sources point to clear signals:
Scholars and analysts also note that even when UK-founded companies remain operationally active in the country, important functions such as corporate treasury, investor relations and, sometimes, senior management may relocate, shifting where strategic decisions and tax liabilities sit.
Industry leaders who spoke to this story — including executives at startups, investors and trade bodies — described a mix of frustration and pragmatic strategy. An anonymous early-stage investor said: "Founders will go where capital and expertise are most readily available. If that means incorporating abroad, listing on a US exchange or entering into partnerships with US acquirers, they'll do it. That isn't necessarily a reflection on the science — it's about the ecosystem around scaling."
Another senior executive at a UK-headquartered life-science company that listed overseas commented: "We wanted to remain in the UK, but our series C investors included US-based funds that recommended we list on Nasdaq to access specialist institutional investors. The choice affected where we incorporated and where many senior hires were made." The executive asked not to be named because the company still maintains substantial UK operations.
The BIA, which represents UK bioscience companies, has repeatedly called for reforms to strengthen the UK as a place to scale science companies. Their public position stresses the need for a joined-up approach combining finance, tax incentives, and tailored policy support. See BIA policy resources here: BIA policy.
Policymakers have several levers to address company retention — some of which have been used in recent years, and others that commentators say need reinforcement.
Some of these measures are already underway in various forms. The UK government has announced policies aimed at boosting scaleup finance and innovation-led growth; universities and research councils have increased emphasis on commercialisation; and trade bodies continue to lobby for reforms. For a summary of government policy on life sciences, see the Department for Business and Trade and UK Research and Innovation pages: Department for Business and Trade, UK Research and Innovation (UKRI).
Not all observers agree that relocation is an unambiguously negative phenomenon. Some argue that cross-border listing and multinational structures can be a sign of international success, allowing UK founders and investors to capture greater value than would be possible in a smaller national market. A company that lists on Nasdaq may still retain significant R&D, manufacturing and employment in the UK, and multinational presence can lead to increased inward investment in supporting activities.
Others caution that policy interventions must be carefully designed to avoid unintended consequences. Overly generous tax breaks or subsidies that distort capital allocation, for instance, may create short-term headline wins but fail to produce sustainable clusters. Institutional investors also highlight the need for depth, liquidity and patient capital — features that cannot be conjured by short-term incentives alone.
Comparisons with other innovation hubs illustrate the problem the UK faces. The US benefits from exceptionally deep private markets, a large base of specialist life-sciences investors, and multiple vibrant public exchanges. Some European jurisdictions have attempted to replicate aspects of the US model by building national champions, offering tax incentives or supporting large public-private partnerships, with varying degrees of success.
Countries that retain and scale science companies tend to offer a combination of factors: deep capital pools (including domestic institutional investors), favourable market infrastructure, predictable and competitive tax/treatment of equity, and strong translational capacity that links university discovery with industrial scale-up.
Industry bodies and founders say they are seeking a coherent national strategy that aligns finance, tax, and regulatory policy with long-term cluster-building. Typical asks include:
As one anonymous founder told this paper: "We don't want handouts. We want a system where we can raise the right kind of capital here, retain talent and scale without being forced into awkward trade-offs that favour another jurisdiction."
The report highlighted in Chemistry World and the responses from trade bodies and industry participants paint a picture of a UK innovation ecosystem that performs strongly at the point of discovery but faces real challenges in keeping the companies that emerge from that discovery within national corporate and financial borders. Policy-makers face a complex set of trade-offs: designing incentives that are competitive internationally, deepening domestic capital markets, and investing in translational infrastructure without creating distortions.
Whether those steps will be taken, and whether they will be sufficient, will determine whether the current pattern of relocation and overseas listing is a short-term adjustment to global capital flows or a longer-term strategic weakness. For now, many in the sector describe the situation as approaching — or having reached — a crisis point, and they are calling for concerted action to keep the economic and scientific benefits of UK innovation at home.
Disclaimer: This article is based on publicly available information and does not represent investment or legal advice.
References and further reading:
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