Computer Weekly’s 2022 startup coverage included a number of case studies on how startups are collaborating with a variety of organisations, from helping refugee support groups with the underlying tech of a system for reporting against migrants, to helping the UK government circumvent end-to-end encryption.

Other coverage looked at general startup trends, including the fact that the UK tech ecosystem was valued at $1tn, as well as the sector’s woes, including that half of startups are still struggling despite the huge bump in investment and valuation in recent years.

Another major focus was on the London-centric nature of the UK’s startup ecosystem, with a range of stories published on the need to build regional innovation hubs to ensure capital is more evenly distributed.

While tentative in its recommendations, the UK Labour Party also published a plan on its ambition to make the UK a global startup hub, which it will expand on in more detail through 2023.

1. Parity AI talks about auditing recruitment algorithms for bias

Independent algorithmic auditing firm Parity AI spoke to Computer Weekly about the process of auditing AI algorithms for bias, after it partnered with talent acquisition and management platform Beamery to conduct ongoing scrutiny of bias in its AI hiring tools.

In line with the consensus among algorithmic auditing experts that audits must consider the social and technical aspects of a system from end-to-end, Parity looked at the system in its entirety, beginning with interviews to collect qualitative information about how the system works in practice, before moving on to an examination of the AI model itself, from initial data collection practices all the way through to its live implementation.

Parity CEO Liz O’Sullivan said starting audits this way can help to “uncover areas of risk that we wouldn’t have seen before”, and give Parity a better understanding of which parts of the system need attention, who is ultimately benefiting from it, and what to measure.

2. UK tech ecosystem reaches $1tn valuation

In March, the UK tech sector reached a $1tn valuation after growing 42% between 2020 and 2021 as a result of greater investment into software and digital companies at the start of the pandemic.

The increased investment has also helped catapult a number of unicorns (companies valued at $1bn or more) to decacorn status (companies worth over $10bn), of which there are now a total of 13 in the UK. A further 14 companies are now valued between $5bn and $10bn.

In the first three months of 2022, UK tech companies raised a further £6bn, with more than half (£3.3bn) going to fintech companies alone. The Department for Culture Media and Sport published research last year that found the UK tech sector is on track to add a further £190bn in value to the economy and create nearly 700,000 jobs over the next three years.

3. Refugee support group works with tech startup on reporting system

The Humans for Rights Network (HfRN) and “slow-tech” academic startup The Whistle spoke to Computer Weekly about their partnership to create a digital reporting system for refugees to document human rights abuses against them.

Using an iterative design process to ensure the needs of already-vulnerable people are respected and met, the idea to create “truly accessible” reporting mechanisms that allow people to document the human rights abuses was based on HfRN founder Maddie Harris’s experience in the refugee camps of northern France.

“Access to reporting is incredibly limited and often, if it does exist, relies on volunteers or organisations, but certainly in my experience there is no real proactive engagement of individuals,” she says. “What actually tends to be the case is that people will come into a situation, talk to a few people, gather some testimony and produce a report that is more about a snapshot in time.”

4. Increase in UK startups scaling to exit, but half still struggle

Tech Nation data showed that, despite more startups scaling to the point of exit than ever before, half are still stuck in low growth stages – particularly those working with emerging technologies.

While 23% of UK tech startups made it to either a Series C investment round or exit in 2022 – compared with 20% that went under in the same time – Tech Nation has warned that these “major liquidity events” must not detract from the support needed by the majority (50%) of firms stuck with consistently low growth, employment and investment.

Tech Nation said support is especially vital for research and development intensive firms, which tend to have much longer development cycles and take more time to get to market.

5. Companies propose scanning content pre-encryption to fight CSAM

Startups working on the UK government’s Safety Tech Challenge spoke to Computer Weekly in January about the project they are working on to detect child sexual abuse material (CSAM) before it reaches encrypted environments.

Responding to the challenge, end-to-end email encryption platform Galaxkey, biometrics firm Yoti and AI-based content moderation software provider Image Analyzer are collaborating on a system that will be able to scan content for CSAM on users’ devices before its encryption. They claim that on-device scanning would be the best way to protect users’ privacy.

However, the client side scanning of communications prior to their encryption raises a number of concerns – primarily that it would render the encryption meaningless because the content would already have been scanned, or could be repurposed for other uses – which the startups discussed with Computer Weekly.

6. Labour unveils plans to make UK global startup

The Labour Party outlined tentative plans to “make Britain the high-growth, startup hub of the world”, with a focus on widening access to capital and revamping the existing tax relief system for both entrepreneurs and investors.

Key recommendations include: unlocking institutional investment and patient capital by, for example, using pension funds to invest in high-growth firms; transforming the British Business Bank through greater operational independence; and further reviewing how to make public procurement easier for startups.

Regarding the tax system and the accessibility of public equity markets, the report further recommends that Labour commit to maintaining the incentives provided by the Seed Enterprise Investment Scheme (SEIS), the Enterprise Investment Scheme (EIS) and venture capital trusts, while also reviewing whether the scope and scale of SEIS and EIS are sufficient.

The report suggests the UK should look at France’s Tibi investment scheme for inspiration, which uses the convening power of government to bring together private sector investors to support high-growth firms.

7. UK climate tech startup investment doubles in 2022

Climate technology investment has nearly doubled in the UK over the past year and is growing globally, but questions remain over how to scale capacity and whether the necessary change will occur in time to prevent climate catastrophe.

A Tech Nation report from November found that UK climate technology startups have raised $7.5bn in 2022 so far, almost double the entire $4bn raised by the same firms throughout 2021.

8. Tech Nation Libra programme selects 35 scaleups for second cohort

Some 35 technology scaleups were selected to join entrepreneurial network Tech Nation’s second Libra cohort in September, a programme designed to support under-represented startup founders.

The six-month long, government-backed Libra programme was created to tackle the tech sector’s lack of racial diversity, and aims to act as a springboard for under-represented founders looking for support while they scale.

In November 2020, an analysis of UK venture capital (VC) investment by Extend Ventures showed that, between 2009 and 2019, three-quarters of all VC investment went to all-white founding teams. In contrast, 23% went to startups with multi-racial founders, and only 0.24% went to all-black founding teams.

Between them, the 35 scaleups collectively employ 172 people, and have raised just more than £10m in VC investment. The majority of companies this year (63%) also have at least one female founder.

9. UK needs stronger regional innovation clusters outside Southeast

Venture capital fund managers spoke to Computer Weekly about the concentration of capital in London and the South East, and how the future success of the UK’s tech ecosystem rests on its ability to form stronger regional innovation ecosystems.

Andrew Williamson, chair of the British Private Equity and Venture Capital Association (BVCA) Venture Capital Committee, and managing partner of Cambridge Innovation Capital, said that while clusters are difficult to get off the ground, they provide entrepreneurs with “very significant network effects” once they have reached a certain level of development.

10. Regional tech hub leaders want more support with levelling-up from next prime minister

Five senior figures from organisations championing the growth of the UK’s regional tech hubs spoke about how they want the next prime minister to address the “postcode lottery” that sees some startups miss out on vital funding and support because they are not based in London.

“For us to succeed, there is an understanding that the whole of the UK must be supported and help needs to be offered, and available wherever required, on the ground rather than directed centrally,” said UK Tech Cluster Group member David Dunn, who is also CEO of Sunderland Software City, ahead of the Tory leadership election.

“It is imperative that the new PM and cabinet are reactive to bespoke regional needs,” he added. “Only then can levelling-up become a reality.”

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