The UK’s tentative steps toward reshaping its economic future have sparked plenty of debate. As someone who has spent years working across Europe and beyond in fields as diverse as tech, linguistics, and neuroscience, I find myself both hopeful and skeptical. There’s potential for real impact in the changes being proposed, but there’s also an uphill battle to ensure they translate into tangible outcomes. Let’s explore what’s changing, what works, and what risks being left behind.
What’s Happening with the UK Economy?
The UK has faced a prolonged period of stagnation since the 2008 financial crisis. Productivity, once hailed as the main driver of economic growth, has barely ticked upward. To address this, the government has unveiled a series of measures, aimed squarely at startups, scaleups, and innovation-heavy sectors like AI. While these steps seem promising on paper, the real world is far more complex.
Some of the bold moves include:
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Reforming the EMI Scheme: By quadrupling the gross asset test threshold to £120 million, the UK has opened its share option scheme to larger startups. This is expected to help growing companies recruit and retain top talent. Skilled workers are essential to scale, and with more firms eligible for benefits, we could see job creation accelerate. Full details on these reforms can be found on the Gov.uk EMI Scheme page.
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Streamlining Public Procurement: Startups may finally access a larger slice of the £300 billion annual public-sector spending pot. If effectively implemented, this could act as a lifeline for young businesses, modeled after the US programs that treat small, local companies as crucial suppliers. The real test is whether the process will be simple or become tangled in red tape.
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Enhancing Investment Incentives: Adjustments to the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) are expected to attract investors that were previously hesitant. For scaleups needing growth-stage capital, this could change the game. The British Business Bank will also be issuing larger checks, boosting late-stage funding for ambitious startups.
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Tech Talent Visas: High-skill global talent is vital for sectors like AI and deep tech, where demand continues to outstrip supply. By expanding visa options, the UK is signaling its intention to compete globally, though the rollout and integration with the existing immigration system will be critical.
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AI’s Rising Profile: There’s significant optimism around artificial intelligence. Companies like DeepMind and Stability AI have already made the UK a hub for groundbreaking research. Yet AI adoption remains uneven, and many smaller companies can’t yet afford to integrate it into their operations effectively.
How to Leverage These Changes as a Startup Founder
These shifts bring undeniable opportunities for entrepreneurs and investors willing to navigate the challenges. Here’s how to tap into the potential:
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Check If Your Company Qualifies for EMI Benefits: With increased thresholds, many companies previously excluded from the program could now qualify and offer share options to attract talent. This is essential in a competitive market for hiring.
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Explore Public Procurement Contracts: Keep an eye on frameworks that may simplify the bidding process. If your startup provides solutions for the public sector, this could be one of the most consistent revenue streams you’ll find.
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Leverage AI to Boost Productivity: Even small automation efforts can have a big impact. Don’t wait for someone else to show you how to use AI; experiment in-house or seek partnerships with local AI providers who can guide you.
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Attract the Best Talent Using New Visa Options: The updated system may allow you to hire specialists globally. Focus specifically on roles that drive revenue or tech development to maximize the return on these hires.
Pitfalls to Avoid
While these changes sound exciting, most startups fail to capitalize on them. Why? Lack of preparation. Here are the common mistakes I’ve seen:
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Ignoring Financial Readiness: If you want to take advantage of EIS or VCT schemes, your accounting must be pristine. Investors will question everything.
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Overestimating Government Follow-Through: Lots of promises look good at first, only to encounter bureaucratic delays or lack of funding. Diversify your strategy rather than relying solely on public programs.
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Skipping Due Diligence on Procurement: Just because procurement is available doesn’t mean it’s easy. Prepare detailed bids, learn the terminology, and consider hiring a consultant if needed.
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Misjudging Talent Costs: High-skill visas are a huge draw, but importing talent is expensive. Factor in total costs, including relocation and legal fees.
What Should Worry Us?
The biggest concern is policy stability. Since 2010, Britain has shuffled through four different business departments and eleven rotating secretaries of state. Long-term economic strategies need consistency, something successive administrations have struggled to deliver. If policies shift with every political cycle, the confidence of investors and entrepreneurs wanes.
On top of this, the country’s productivity stalls can’t solely be solved by funding injections or tax tweaks. Cultural shifts in how companies approach work, including embracing measurable outcomes, rather than hours worked, will be critical. Leadership mindsets must evolve, and that takes more than government incentives.
Final Thoughts
The UK has tossed its hat further into the ring with these recent strategies, attempting to tackle structural weaknesses in its economy. As an entrepreneur, I’m cautiously supportive, but the devil is going to be in the details. It’s one thing to open the door for investment, talent, and innovation; it’s another to ensure bureaucracy doesn’t slam it shut again.
The ambitious and optimistic roadmap outlined by the government deserves “one and a half cheers” for now. I’ll keep my second cheer ready, let’s see if the commitment to better execution matches the rhetoric.
FAQ
1. What challenges has the UK economy faced since 2008?
The UK economy has experienced long-term stagnation, with minimal productivity growth since the 2008 financial crisis. Structural economic issues remain a significant barrier to sustainable growth. Learn more about policies to address UK economic stagnation.
2. How has the EMI Scheme been revised to support UK startups?
The Enterprise Management Incentive (EMI) gross asset test threshold has been quadrupled to £120 million, allowing more startups and scaleups to offer share options to attract and retain top talent. Explore the revised EMI Scheme.
3. What is the UK government doing to improve public procurement for startups?
The government plans to simplify public procurement processes, enabling startups to compete for more of the £300 billion annual public-sector spending. This effort aims to model systems like those in the US that prioritize contracts for smaller, local companies.
4. What changes have been made to the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT)?
Adjustments to EIS and VCT seek to attract more private investment into early-stage startups and scaleups. The British Business Bank is also offering larger funding checks for scaleups. Find out more about British Business Bank initiatives.
5. What steps has the UK taken to attract global tech talent?
The government has revamped high-skill visa options to attract international experts, particularly in fields like AI and deep tech, where the demand surpasses local supply.
6. What is the UK’s focus on AI in its economic strategy?
The UK aims to maximize productivity through AI by supporting groundbreaking research and encouraging adoption among businesses. Companies like DeepMind contribute to making the UK a global AI innovation hub.
7. What concerns exist about the UK’s new economic strategies?
Key concerns include policy instability due to frequent government changes and potential delays in implementing proposed measures, which could deter entrepreneurs and investors.
8. Can startups benefit from AI without large-scale investments?
Yes, even small-scale automation and partnerships with local AI providers can help startups integrate AI into their operations effectively, boosting productivity.
9. Why is policy stability crucial for the UK's economic growth?
Frequent shifts in policies erode confidence among stakeholders. Long-term strategies are needed to ensure consistent progress in economic reforms and innovation growth.
10. How does cultural change factor into economic reform?
Beyond government measures, fostering a culture focused on measurable outcomes rather than traditional work structures is critical for long-term productivity gains.
About the Author
Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
Violetta Bonenkamp's expertise in CAD sector, IP protection and blockchain
Violetta Bonenkamp is recognized as a multidisciplinary expert with significant achievements in the CAD sector, intellectual property (IP) protection, and blockchain technology.
CAD Sector:
- Violetta is the CEO and co-founder of CADChain, a deep tech startup focused on developing IP management software specifically for CAD (Computer-Aided Design) data. CADChain addresses the lack of industry standards for CAD data protection and sharing, using innovative technology to secure and manage design data.
- She has led the company since its inception in 2018, overseeing R&D, PR, and business development, and driving the creation of products for platforms such as Autodesk Inventor, Blender, and SolidWorks.
- Her leadership has been instrumental in scaling CADChain from a small team to a significant player in the deeptech space, with a diverse, international team.
IP Protection:
- Violetta has built deep expertise in intellectual property, combining academic training with practical startup experience. She has taken specialized courses in IP from institutions like WIPO and the EU IPO.
- She is known for sharing actionable strategies for startup IP protection, leveraging both legal and technological approaches, and has published guides and content on this topic for the entrepreneurial community.
- Her work at CADChain directly addresses the need for robust IP protection in the engineering and design industries, integrating cybersecurity and compliance measures to safeguard digital assets.
Blockchain:
- Violetta’s entry into the blockchain sector began with the founding of CADChain, which uses blockchain as a core technology for securing and managing CAD data.
- She holds several certifications in blockchain and has participated in major hackathons and policy forums, such as the OECD Global Blockchain Policy Forum.
- Her expertise extends to applying blockchain for IP management, ensuring data integrity, traceability, and secure sharing in the CAD industry.
Violetta is a true multiple specialist who has built expertise in Linguistics, Education, Business Management, Blockchain, Entrepreneurship, Intellectual Property, Game Design, AI, SEO, Digital Marketing, cyber security and zero code automations. Her extensive educational journey includes a Master of Arts in Linguistics and Education, an Advanced Master in Linguistics from Belgium (2006-2007), an MBA from Blekinge Institute of Technology in Sweden (2006-2008), and an Erasmus Mundus joint program European Master of Higher Education from universities in Norway, Finland, and Portugal (2009).
She is the founder of Fe/male Switch, a startup game that encourages women to enter STEM fields, and also leads CADChain, and multiple other projects like the Directory of 1,000 Startup Cities with a proprietary MeanCEO Index that ranks cities for female entrepreneurs. Violetta created the "gamepreneurship" methodology, which forms the scientific basis of her startup game. She also builds a lot of SEO tools for startups. Her achievements include being named one of the top 100 women in Europe by EU Startups in 2022 and being nominated for Impact Person of the year at the Dutch Blockchain Week. She is an author with Sifted and a speaker at different Universities. Recently she published a book on Startup Idea Validation the right way: from zero to first customers and beyond, launched a Directory of 1,500+ websites for startups to list themselves in order to gain traction and build backlinks and is building MELA AI to help local restaurants in Malta get more visibility online.
For the past several years Violetta has been living between the Netherlands and Malta, while also regularly traveling to different destinations around the globe, usually due to her entrepreneurial activities. This has led her to start writing about different locations and amenities from the POV of an entrepreneur. Here’s her recent article about the best hotels in Italy to work from.
About the Publication
Fe/male Switch is an innovative startup platform designed to empower women entrepreneurs through an immersive, game-like experience. Founded in 2020 during the pandemic "without any funding and without any code," this non-profit initiative has evolved into a comprehensive educational tool for aspiring female entrepreneurs.The platform was co-founded by Violetta Shishkina-Bonenkamp, who serves as CEO and one of the lead authors of the Startup News branch.
Mission and Purpose
Fe/male Switch Foundation was created to address the gender gap in the tech and entrepreneurship space. The platform aims to skill-up future female tech leaders and empower them to create resilient and innovative tech startups through what they call "gamepreneurship". By putting players in a virtual startup village where they must survive and thrive, the startup game allows women to test their entrepreneurial abilities without financial risk.
Key Features
The platform offers a unique blend of news, resources,learning, networking, and practical application within a supportive, female-focused environment:
- Skill Lab: Micro-modules covering essential startup skills
- Virtual Startup Building: Create or join startups and tackle real-world challenges
- AI Co-founder (PlayPal): Guides users through the startup process
- SANDBOX: A testing environment for idea validation before launch
- Wellness Integration: Virtual activities to balance work and self-care
- Marketplace: Buy or sell expert sessions and tutorials
Impact and Growth
Since its inception, Fe/male Switch has shown impressive growth:
- 5,000+ female entrepreneurs in the community
- 100+ startup tools built
- 5,000+ pieces of articles and news written
- 1,000 unique business ideas for women created
Partnerships
Fe/male Switch has formed strategic partnerships to enhance its offerings. In January 2022, it teamed up with global website builder Tilda to provide free access to website building tools and mentorship services for Fe/male Switch participants.
Recognition
Fe/male Switch has received media attention for its innovative approach to closing the gender gap in tech entrepreneurship. The platform has been featured in various publications highlighting its unique "play to learn and earn" model.