Powering Up the UK Start-up Scene In the global race to become a true innovation powerhouse, the UK has the ambition, the talent, and a promising government pledge to cut regulatory costs by 25%
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur United Kingdom, an international franchise of Entrepreneur Media.
However, according to Steven Drost, co-founder and Chief Strategy Officer at CodeBase, a company that bridges the gap between founders, governments, corporates, investors, and academiaregulatory tweaks alone won't cut it.
"The Prime Minister's pledge to cut regulatory costs by a quarter is an encouraging step, but cost-cutting alone won't drive innovation," says Drost.
For Drost, the missing ingredient in the UK's startup strategy isn't capital or capability—it's connectivity. He argues that real, sustainable growth depends on an interconnected ecosystem where startups can thrive alongside academia, corporates, mentors, and investors.
"Startups need access to a dynamic ecosystem where expertise, opportunity, and capital come together to transform bold ideas into global ventures," he explains. "If the government is serious about delivering economic growth, it must invest as much in ecosystem builders as regulatory reform."
This isn't just theory—it's a call to action. Drost points to Scotland's Techscaler as a model for how the UK could scale innovation by weaving stronger connections across sectors.
"What's needed is a tech ecosystem built to last – with academia, corporates, mentors, and investors working in sync," he says. "But ingredients alone don't make a meal."
In an age where AI adoption is becoming the great divider between large and small enterprises, Drost warns that the UK must do more to close the gap.
"AI can accelerate startup growth by cutting costs, improving efficiency, and unlocking smarter decision-making," he notes. "Yet while almost all Fortune 500 companies use AI, 43% of UK SMEs have no plans to adopt it. This leaves many startups at a disadvantage."
He cautions against a simplistic, Silicon Valley-style approach that focuses only on startups and capital. The real engine of growth lies in what Drost calls the "connective tissue"—the people and structures that help ideas grow from concept to company.
"The UK doesn't lack ambition or innovation; it lacks the connective tissue to turn potential into powerhouses," he says. "Fix that, and real growth will follow."
In short, Drost's message to policymakers is clear: Don't just fund the future—build the ecosystem that allows it to flourish.
