Dame Julia Hoggett: Scaling UK companies must be a priority to benefit whole economy

The North East has a rich heritage of innovation and entrepreneurship, and my recent visit to Tyneside showed this in abundance, with a thriving ecosystem of entrepreneurs helping each other to succeed and, importantly, create great jobs, writes Dame Julia Hoggett, chief executive of the London Stock Exchange.

While I have spent most of my career in London, I have strong family ties to the North West and North East.

It is one of the reasons I was delighted to join the latest ScaleUp Institute event in Newcastle, in May, as part of its ScaleUp Britain campaign, celebrating and supporting companies across the UK to help them access funding, new markets and talent.

Meeting the superb entrepreneurs and great businesses we have in the region is always a powerful reminder of why we must ensure that our capital markets, and those that play a role in them – including the London Stock Exchange – are doing their utmost to help those companies grow wherever they are across the country.

I am often asked why it matters that the UK’s capital markets support our homegrown companies – why not leave it to overseas investors, some say.

The answer is simple. If every time the UK produces the next great company, that company needs to seek venture capital or list overseas to scale, it is only a matter of time before it goes overseas.

And with it goes the management team, a disproportionate amount of the value created and sometimes even the tax revenue.

But, more importantly, it plucks another great company from our ecosystem, which could help support and inspire the next generation of entrepreneurs in the UK.

In the North East, Port of Tyne is a perfect illustration of the criticality of network effects.

Keeping those networks grounded in the very communities that created them, and enabling them to scale and succeed on either a local or global stage from here, redounds to more than just the company itself.

That is why having strong UK capital markets matters.

There has been a lot of commentary lately about the need to make our capital markets more competitive, and there are those who frame it as an issue for the ‘City’ or for ‘London’.

But that is far from the truth.

 

 

Ensuring the competitiveness of our capital markets is an issue which impacts people up and down this country, and so it is important that we get it right.

It is why we formed the Capital Markets Industry Taskforce (CMIT), which I have the privilege of chairing, where, working closely with the Government, policymakers, regulators and other stakeholders, we are playing a convening role to improve the competitiveness of the UK’s capital markets and ensure that they are best placed to help support investment and growth across the UK.

CMIT’s work is focused on several areas to help entrepreneurs and companies.

This includes supporting the reform of our public market rules to ensure they are working the best way they can to support companies to list in the UK – which we are expecting to happen very soon.

More broadly, we are supporting efforts to streamline the administrative burdens on public companies, improve their relationships with investors, unlock new domestic capital to invest in UK companies, build a much stronger sell-side research ecosystem to support that investment, and develop the world’s first cross-over market for scaling companies – to enable companies to access public market liquidity while remaining private.

Crucially, we are also making a concerted effort to better explain the importance of having a country that supports and celebrates its entrepreneurs – from start-up to scale-up to global.

The UK has an enviable position, but it is something we do not recognise enough.

We have remarkable business founders and leaders here in the North East and across the UK, which is why we create more unicorns (companies valued at more than $1 billion) than anywhere in the world outside the US and China – this is something we must celebrate and fiercely protect.

We also have the third largest pool of pension assets in the world at £3 trillion, world-leading universities and a truly global financial centre.

Better connecting all of these great attributes is how we will grow our economy for generations to come – and that is exactly what we are working on.

 

• Photography by Jamie Hallam