The relationship between policymakers and the tech sector is evolving. A decade ago, political engagement with technology often felt superficial. Today, politicians are more willing to admit gaps in their knowledge and actively ask the industry what it needs. With more tech-experienced figures entering government, the conversation is becoming more constructive, focused on three key questions: what do you need, what should we know, and what problems can we help solve?

Generative AI is creating opportunities for startups to scale at speeds previously unthinkable. Companies such as Lovable in Sweden have surpassed even OpenAI’s growth rate with just a six-person team, while UK players like Granola are leveraging AI to accelerate expansion. The impact is twofold: back-office automation (such as call transcripts and data processing) is delivering clear productivity wins, but outbound sales automation has largely fallen flat, creating what some founders described as “the great ignore,” as buyers conduct their own research before engaging sales teams later in the journey.

While the UK raised £4bn in 2014 and has since built a stronger funding environment, the scale gap with the US remains stark: last year the US produced 76 unicorns, compared to just 6 in the UK. France is also emerging as a serious competitor with aggressive investment strategies. Adding to the challenge, looming changes to entrepreneur-friendly policies—including capital gains tax and EMI schemes—could further constrain the UK ecosystem at a time when consistency and support are needed most.

AI is not just about efficiency; it’s reshaping what success looks like. Software engineering teams are already seeing measurable 2x productivity gains from tools like Cursor. Yet investors and markets are increasingly looking beyond efficiency alone: the winners will be those who can deliver outcomes rather than just tools. Hybrid “service + software” business models are gaining traction, and AI literacy is fast becoming a baseline expectation across all roles, not just technical ones. Balancing AI-native younger talent with experienced professionals will be critical for companies to adapt effectively/

Looking ahead, defence is re-emerging as a significant sector given geopolitical shifts, while the application layer of AI continues to present strong opportunities for UK startups. However, with most foundational models controlled by US companies, there’s a real risk that much of the economic value could be captured abroad unless the UK adapts its policies and investment frameworks. The challenge is clear: ensure that innovation happening here translates into long-term value creation within the UK.