In a gigantic blow to the UK’s technology industry, British chip designer Arm has decided to list itself on the US stock market instead of the UK.
Arm was listed in London until it was bought by Japan’s SoftBank for a whopping £26 billion in 2016. It was seen as one of the British tech industry’s crown jewels and one of the last remaining British tech giants. This was a home-grown company, based in Cambridge, that produces highly-prized chips currently used by companies like Apple and Qualcomm.
This is an entity with worldwide name recognition. Now, the British firm, with Japanese owners, is set to be listed on the US stock market. British technology will be helping to rally the US stock market and provide a boon for overseas investors. The move should ring alarm bells through Whitehall.
It’s not like policymakers didn’t realise the effect of selling off a British asset. Nevertheless, in September 2022, the then prime minister Liz Truss sought to encourage SoftBank to list Arm in the UK. SoftBank reportedly preferred Nasdaq at the time due to organisations benefitting from more valuable shares, and the fact other major tech companies were listed on the exchange. Truss’ predecessor Boris Johnson also tried to lobby Arm to list in London. These efforts were too little, too late, though, and the pull of “global Britain” doesn’t appear to be speaking for itself, either.
This begs the question as to why the sale of Arm was ever allowed to proceed in the first place. In 2016, critics pointed out the deal followed a pattern of successful UK tech firms being acquired by multinational corporations with M&A activity heightening following Brexit.
This mess is the direct result of the UK’s disjointed tech policy. Since 2017, the UK has endured seven different secretaries of state for Digital, Culture, Media and Sport (DCMS), since the digital brief was first thoughtlessly bolted onto the briefs for culture, media and sport. Seven secretaries of state in six years doesn't point to a policy agenda that's either strong or even stable.
This chaos is mirrored in the way it’s become increasingly challenging for the government to pass its own legislation. The Online Safety Bill, first published as a draft in May 2022, was paused in July, for example, due to inner turmoil in the Conservative party. Instead of debating the bill, the government tabled a motion of no confidence in itself.
Other tech priorities have also been put on hold. The government had aimed to create the Oxford-Cambridge Arc, a project connecting Oxford, Cambridge, and Milton Keynes to create a British rival to Silicon Valley. This was paused in March 2022, with reports stating that Michael Gove, the levelling-up secretary, deprioritised the project. With the change of government, chancellor Jeremy Hunt has now resurrected these plans, although industry experts now question whether the Silicon Valley model is even appropriate or modern enough for the UK to be pursuing.
Whether it's down to Brexit or general political turmoil – or both – UK tech policy has been going around in circles to the extent it’s effectively paralysed. Any notion of a long-term strategy seems to be an afterthought, and that’s putting it kindly.
Sunak has, for now, moved tech policy into the Department for Science, Innovation and Technology (DSIT). It remains to be seen how long even he will last in office, and how a prospective change in prime minister might again deviate future UK tech policy. Meanwhile, amid this fractured approach to policymaking, the UK is losing its prized assets like Arm.
Other countries are investing heavily in chipmaking, as they’ve recognised how foundational this industry is, particularly in light of the recent semiconductor supply chain crisis. India set aside $10 billion in December 2021 to invest in its semiconductor industry, while the US passed the CHIPS act in July 2022 to give its industry a $52 billion boost. The UK, by contrast, has sold one of its titans and is now watching sheepishly as foreign capital benefits from British labour.
If this country doesn’t seriously invest in and secure its tech industry, it’ll be harder to stay competitive in the future. But when the consequences of these failures start to take hold, today’s politicians could be long gone, and it’ll be someone else’s problem.
