A report by Lakestar, which provides capital to tech companies such as fintech giant Revolut, said the government could triple GDP growth by attracting £75bn of additional investment each year. The report called for a total of £1.5 trillion in funding directed towards strategically important sectors including decarbonisation, biotechnology and space over the next two decades.
He argued that attracting a cash injection like this would create up to £7trillion of additional value in the economy and more than three million jobs.
The call comes as GDP is expected to fall later this year on fears the impact of soaring inflation could translate into a recession.
Britain’s funding gap report added that traditional banks are being held back by regulations that prevent them from unlocking more large-scale capital investment, and said pension funds could be the key to accessing more investment capital.
“The UK already has a vibrant startup ecosystem,” said Klaus Hommels, founder of ystem mmels and chief executive of Lakestar. “With world-class institutions and incredible entrepreneurs, the next phase of growth can be achieved with an ambitious strategy to scale the businesses of the future.
“The growth of growing businesses over the next two decades would help the UK win in battleground sectors and retain digital sovereignty.”
Sam Gyimah, venture capital partner at Lakestar and former minister for universities, science and innovation, said: “Fixing the UK’s funding gap would put a rocket under GDP growth and usher in a new generation of globally competitive British companies.
“High-growth businesses are the backbone of a successful economy,” he added.
“Increased investment in new industries could create value similar to that of the United States over the past 20 years.”