Opinion: Why the UK Should Not Follow the EU’s Innovation Path

The United Kingdom stands at a defining crossroads. As global economies double down on technological competitiveness, the UK’s choices over the next few years will shape not just its economic landscape, but also its global relevance in tech and innovation. While recent signals from the current government suggest a tilt back toward deeper EU alignment, I believe this is a strategic misstep—particularly in innovation policy.

The EU has not exactly been a beacon of disruptive tech success over the past two decades. Europe hasn’t produced a single tech giant on the scale of Google, Microsoft, or Tencent. And it’s not just a matter of luck or population size—it’s about overregulation, heavy compliance frameworks, and a deep-seated culture of caution that stifles high-risk, high-reward innovation. The numbers are telling. In 2023, U.S. firms spent 2.3% of GDP on private-sector R&D, while EU firms averaged just 1.2%. Meanwhile, the U.S. captured 67% of global private-sector R&D spending, compared to 57% in the EU.

This gap is particularly evident in high-growth areas like artificial intelligence, biotech, and platform technology. The EU tends to excel in incremental innovation—think industrial tech, automotive advancements, and energy efficiency—but it rarely leads in breakthrough sectors. And yet, while European regulators levy billion-dollar fines against tech companies like Meta and Google, there is a stark absence of European firms able to compete at that level.

The UK, on the other hand, has an edge. Despite Brexit’s turbulence, the UK remains Europe’s most advanced tech ecosystem, with over 170 unicorns and a tech sector valued at over £1 trillion. In 2023, the UK raised $21.3 billion in venture capital, more than Germany and France combined. London remains a global hub for fintech, AI research, and cloud innovation. But this edge is fragile.

Since Brexit, the UK’s share of global R&D-intensive firms has declined significantly—from 118 companies in 2013 to just 63 in 2023. While some of this is due to global economic shifts, it’s also tied to a growing uncertainty around UK regulatory direction. Investors are watching to see whether the UK will continue fostering a startup-friendly, agile environment—or whether it will gradually adopt EU-style constraints under a different name.

Why the EU Approach Is the Wrong Blueprint

The EU’s Digital Services Act and AI Act, while well-intentioned, are a regulatory burden that risks stalling innovation before it even begins. These frameworks impose stringent compliance obligations even on small startups, requiring extensive documentation, auditing, and data disclosures that only large firms can afford. The result? Innovation is chilled. Capital flees. Entrepreneurs relocate.

Compare this to regions like Africa, where looser regulatory structures have enabled tech ecosystems to flourish. Nigeria, Kenya, and South Africa have birthed fast-scaling fintech firms like Flutterwave, Chipper Cash, and Yoco. Africa’s fintech revenue is projected to hit $230 billion by 2025. These startups aren’t bound by endless red tape; instead, they thrive in spaces where innovation is not criminalised before it’s commercialised. In many ways, African founders are now outpacing their European counterparts in user growth and regional influence.

The UK cannot afford to emulate the EU’s cautious, protectionist stance if it hopes to be a true global tech leader. It must embrace agility, attract top-tier talent, and incentivise both local and foreign investment. Prime Minister Starmer’s recent pledges to boost public computing and establish a National Data Library are promising—but they must be backed by a commitment to regulatory independence and private-sector collaboration.

while the EU talks about moving away from U.S. tech reliance, it has no domestic replacements for Google, Microsoft, or AWS. The UK, on the other hand, can serve as a bridge between U.S. tech and global innovation markets. Rather than pushing away Big Tech, the UK should welcome these firms—while simultaneously nurturing homegrown startups that can one day challenge them.

The post-Brexit world offers Britain a chance to reimagine its innovation strategy. That future should not be shackled by Brussels-style overreach. It should be bold, pro-entrepreneur, and laser-focused on turning the UK into a magnet for the world’s best minds.

Because if the UK does not define its own innovation path, it will find itself trailing behind—not just the U.S. and China, but also the next wave of African, Indian, and Southeast Asian tech giants rising unburdened by the weight of bureaucratic tradition.

The views expressed in this article are solely my own and do not necessarily reflect those of any organisation or publication I may be affiliated with.