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Scaling With Ambition: How Diversity Fuels the Future of Tech Scale-up Success
Tech scale-ups are increasingly recognised as critical drivers of the UK government's mission to drive economic growth. According to the ScaleUp Institute, scaling firms now account for 55% of the UK SME output, valued at £1.45 trillion, despite representing just 0.6% of the business population. Within the tech sector, recent research demonstrating their growth potential. Of 258 leaders in scale-ups surveyed, two-thirds have expanded internationally, and a further 27% are in the process of doing so.
However, the scale-up ecosystem faces significant challenges in diversity at all levels - founders, directors, and employees. For example, only one in three UK entrepreneurs are women, a gender gap equivalent to 1.1 million missing businesses. Male-led SMEs are five times more likely to scale to £1m turnover than female-led SMEs, and just 1.8% of equity capital is allocated to female-founded businesses. These disparities not only hinder growth but also represent untapped economic potential.
The case for diversity is clear. Research consistently demonstrates that diverse teams are more innovative, make better decisions, and excel at problem-solving. McKinsey’s Diversity wins report revealed that companies in the top quartile for gender diversity in executive teams are 25% more likely to achieve above-average profitability. Yet, as Beauhurst highlights, a lack of robust diversity data - spanning gender, age, and nationality - limits the ability to address systemic inequities, although anecdotal evidence strongly points to underrepresentation.
Despite these challenges, there are promising examples of progress. In the tech sector, companies like Google run the ‘Google for Startups Women Founders Fund’, a programme that provides tailored mentorship, product support and funding for women-led tech businesses.
Initiatives such as the Investing in Women Code are already driving change. This is a commitment to support the advancement of women entrepreneurs by improving their access to the tools, resources and finance they need to achieve their goals. Code Partners (including British Business Bank, British Private Equity & Venture Capital Association (BVCA), UK Business Angels Association (UKBAA), UK Finance, and Responsible Finance) are responsible for managing data collection and reporting, on behalf of government.
The Invest in Women Taskforce are also driving systemic change and have secured over £250m of funding to support female entrepreneurs in the UK. Major investors, including Barclays, M&G, the British Business Bank, Morgan Stanley, Visa Foundation, BGF and Aviva have stated their commitment to invest in female-founded businesses.
Government leadership is also showing signs of prioritising diversity. The first female Chancellor of the Exchequer, delivered the first female-led Autumn Budget on October 30, which marked a historic moment. The Budget unveiled measures such as the British Business Bank's pledge to expand funding for female entrepreneurs, committing £50m to female-led funds and supporting the Invest in Women Taskforce's mission. However more can be done to drive real change.
Improving diversity within UK tech and science scaleups is more than a moral imperative - it is a strategic necessity for sustainable growth. The government must embed diversity to be at the heart of all policy and decision making - whether unlocking access to capital, access to talent and upskilling or creating a level playing field for procurement. This approach is not only critical for the UK's innovation leadership but also, according to the Rose Review of Female Entrepreneurship, holds the potential for a £250bn boost to the economy.
Actions the government could take right away include improving data collection on growth businesses to provide policy makers with stronger evidence on female entrepreneurship and founders. This should be led by the Office for Equality and Opportunity working with HM Revenue & Customs and Companies House. Alongside this, work to provide statistics on returns offered by women-founded businesses at each growth stage, encouraging investment into female-led scaleups.
Alongside this, continue the Venture Capital Fellowship Programme, placing a greater emphasis on creating a network of next generation female and ethnic minority leadership through certain eligibility criteria to participate in the programme.
By championing diversity, the UK can unleash the full potential of its scale-up ecosystem and secure a more prosperous, equitable future.
techUK’s TechTogether campaign, taking place throughout March, is a collection of activities highlighting the UK’s technology sector pursuit to shape a more equitable future. In 2025 we are exploring: Inclusive AI, investing in diverse founders and entrepreneurs, the power of allyship and mentorship, and empowering young people.
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Mia Haffety
Mia joined techUK in September 2023.
