The UK government must embrace higher-risk startup investments to prevent promising companies from relocating abroad, Business and Trade Secretary Peter Kyle said at the WSJ Leadership Institute CEO Summit in London. The minister acknowledged that government's role needs to evolve significantly for the 2020s and beyond, requiring more assertive action in supporting domestic innovation.

Recent government investments include stakes in Kraken (Octopus Energy's technology arm), self-driving car firm Wayve, and quantum-computing company Oxford Quantum Circuits. These moves signal a strategic shift toward direct participation in high-growth sectors that could define the UK's economic future. Investment decisions are handled by bodies staffed with venture-capital professionals, separating political influence from funding choices.

Kyle emphasized the government's willingness to defend taxpayer-backed investments that fail, suggesting officials recognize the inherent risks in early-stage technology funding. This approach contrasts with traditional public sector risk aversion, potentially reshaping how European governments engage with their domestic startup ecosystems.

The strategy reflects growing competition among nations to retain homegrown champions as they mature from startups to scale-ups. By accepting higher failure rates, the UK aims to capture more successful exits and maintain its position as a European technology hub.