The United Kingdom possesses several intrinsic advantages that support its position as a fertile environment for start-ups and innovation, according to Farzana Rahman, co-founder and chief executive of radiology specialist Hexarad. Despite recurring questions about Britain’s competitiveness in the global market, Rahman argues that the country often underestimates its strengths.

Central to this optimism is the UK’s concentration of world-class universities producing talent across science, medicine, engineering, and creative industries. The nation’s geographic location also facilitates communication with both Asian and American markets, while the widespread use of English provides a linguistic edge in global business. Rahman suggests that these factors form a solid foundation for enterprise, and discussions about British business should begin here rather than comparing the UK unfavorably to the United States.

While acknowledging the US’s large domestic market and freer capital flows, she cautions against attempting to replicate the American model, citing different underlying market dynamics. Instead, Rahman points to Sweden as a more relevant benchmark — a smaller country that has nurtured successful companies like Spotify and Klarna by focusing on its unique strengths rather than emulating others.

Regarding government’s role, Rahman expresses skepticism about the effectiveness of efforts to artificially foster a culture of innovation through state intervention. She advocates for a lighter regulatory touch: regulation should exist where necessary and be consistently enforced, but the government should largely allow entrepreneurs and investors to drive growth independently.

Where the state can have a meaningful impact is in shaping the future workforce. Given the publicly funded education system, there is potential to prepare young people for a world increasingly influenced by artificial intelligence (AI). This includes fostering AI literacy across various fields and encouraging careers in sectors less susceptible to automation, such as skilled trades, the arts, and care services. Rahman envisions the UK developing a dual workforce fluent in AI technologies alongside occupations requiring human judgment and dexterity.

Another key area for government involvement is procurement, as the public sector accounts for approximately £400 billion in annual spending on goods and services. Encouraging British businesses to address public sector challenges could stimulate innovation and expedite progress. However, Rahman notes that the current procurement process often hampers innovation and calls for streamlining to better support emerging companies. Securing public contracts can also serve as valuable endorsements for firms seeking to expand internationally.

Consistency and predictability in government policy are highlighted as critical concerns for entrepreneurs. Rahman points to the detrimental effects of frequent speculative tax policy leaks and policy reversals, which create uncertainty among founders and investors. One example is the handling of research and development (R&D) tax credits. Although designed to promote innovation funding, recent clampdowns on fraudulent claims have also ensnared legitimate innovators, causing delays and eroding confidence in government support.

Ultimately, Rahman argues that entrepreneurs need assurance that regulatory and fiscal frameworks will remain stable enough to encourage investment and growth. She believes the government should back its start-up community through consistent policies and focus on developing a talent pool equipped for future technological landscapes. By embracing these strengths, the UK could attract both domestic and international investment, fostering a vibrant ecosystem of innovative businesses.