Exclusive-Software industry calls for more UK Government support

By Thomson Reuters Mar 27, 2024 | 1:17 AM

By Martin Coulter

LONDON (Reuters) – Britain’s government has been urged to provide more support for the software industry with measures including tax incentives and talent visas.

More than 120 industry leaders have called for government intervention to improve conditions for European software companies.

Europe has long struggled to scale up homegrown tech companies as successfully as the U.S., with many startups forced to seek investment abroad as they scale up.

A new policy document — published by industry body Boardwave and seen by Reuters — highlights what it calls Europe’s “dreadful” track record of scaling software companies, with one recent study showing only one software-focused firm, Sage, counted among Britain’s top 100 publicly-traded businesses, compared to dozens in the U.S.

Phill Robinson, Boardwave founder and a former executive at software giant Salesfore, shared the report with Britain’s technology minister Michele Donelan last week, warning that mid-sized software companies had received little government attention compared to Big Tech firms and buzzy venture-funded startups.

A spokesperson for the Department of Science and Technology said it had unlocked billions of pounds to help fund high growth firms, and encouraged British investors to back the country’s most promising scale-ups.

“We do not agree with this assessment. Our tech sector is booming and outpacing European competitors at every turn. We consistently lead the continent, ahead of both France and Germany combined,” the spokesperson told Reuters.

Set up by Robinson in 2022, London-based Boardwave’s 1,300-strong membership includes software founders, CEOs and other industry leaders representing almost every country in Europe.

“A vast part of the tech ecosystem has been disregarded,” Robinson said in an interview. “Software is going to underpin the digital economy of the future, but it’s been neglected.”

The recommendations of the white paper, a policy document setting out proposals for future legislation, include expanding talent visa schemes in order to attract and retain workers from abroad, and introducing bigger tax allowances for research and development spending.

The report calls on governments to explore the creation of a continent-wide stock exchange, dubbed the “European NASDAQ”.

IRIS Software Group, founded in 1978, is the largest third-party tax filer with the British government, and is used by 21,000 of the country’s accountancy practices. Its CEO Elona Mortimer-Zhika told Reuters the government could do more to support such companies.

“The world is going to be very different 10 years from now, and we can either watch it happen, and let the U.S. take the lead again, or we can support a community of leaders to grow out of the U.K. and Europe,” she said.

Other backers of the campaign include Rishi Khosla, CEO of Softbank-backed Oaknorth Bank, and Adam Hale, a venture partner at investment firm Notion Capital, which has previously invested in startups such as British payments firm GoCardless.

Having presented the report to British officials, Robinson said Boardwave was pursuing talks with the French and German governments on how they could support the industry.

(Reporting by Martin Coulter, editing by Ed Osmond)