The UK has long been a global leader in life sciences. Our world-renowned universities, strong academic research, and distinctive National Health Service make the UK one of the most exciting countries in the world for innovation in the health tech space.
Yet post-pandemic funding struggles have cast doubt on the UK’s ability to grow and scale its health tech sector to the same heights as those reached in the US and China. The question is no longer whether we have the ideas or the talent, it’s whether we can commercialise those ideas at scale, grow globally relevant companies and keep them here, turning our sector advantage into an economic one.
A World-Class Foundation
The UK’s research ecosystem is exceptional. British universities produce 57 per cent more academic papers per capita than the US, and over the past 20 years, the UK has emerged as one of the top three countries globally to invest in for innovation. Our universities are backed by leading scientific and engineering talent, and an increasingly mature venture capital industry.
This innovation is translating into jobs. The healthtech sector specifically contributes £34 billion in annual turnover and employs more than 150,000 people. These are not small numbers, they’re the markings of an industry that could define our next industrial era, at a time when AI has turned every sector on its head.
And yet, the challenge remains. Moving from world-class research to commercial viability is tough. In 2025, Beauhurst reported that new company deals dropped sharply as economic headwinds caused investors to retrench, prioritising existing portfolios. Startups must now present later-stage proof points even at seed level. The bar has risen, but so too has the clarity of offerings. In a less crowded market, the best propositions stand out more easily and can help better attract talent, capital and customers, and this is no longer the case.
AI’s Critical Diagnosis
Central to this shift is AI. Already, it is redefining healthcare delivery: from AI-powered note-taking tools that save clinicians hours each week, to large language models now embedded in diagnostic pathways and treatment planning. A quarter of all current UK healthtech deals involve AI, underscoring just how central this technology is to the sector’s future.
But AI in healthcare is not a simple plug-and-play. This is an industry that rightly demands the highest levels of trust, precision, and accountability, particularly when it comes to personal and sensitive data. Innovation alone won’t cut it. AI in healthcare must be rigorously tested and evidence-led.
The government has made a strong start in putting the country at the forefront of AI and innovation. The AI Action Plan introduced in January has given those employing the technology confidence to scale, but we can still go further.
We need better collaboration across sectors to ensure that AI-powered technologies in healthcare are built and deployed responsibly. Real-world testing through the NHS is a huge advantage the UK holds, but that access must be made more agile. Regulation, too, must evolve to match the pace of innovation without compromising safety.
Clusters of collaboration
One of the most powerful catalysts for commercial growth lies in our research and innovation ecosystem, anchored in the so-called ‘Golden Triangle’. This rare concentration of talent and expertise creates a space where universities, startups, and policymakers collide, and where proximity to other like-minded innovators breeds connection, collaboration, and ultimately scale.
At Here East, we see this daily. One example is Panda Surgical, a spinout from UCL based on campus. The company is developing one of the first AI-powered handheld robots for minimally invasive neurosurgery. This is a technology that can revolutionise how complex surgical procedures are performed across the globe.
These clusters are essential infrastructure in a modern innovation economy. We must continue backing them, ensuring that high-potential businesses have access to labs, talent, and regulatory guidance at every stage of their journey.
Backing British Brilliance
We need to address the systemic challenges still holding back healthtech companies. The NHS, for all its strengths, is understandably risk-averse. But to harness the full power of AI and other breakthrough technologies in healthtech, we need a more consistent and transparent procurement process. Startups must be encouraged to build robust, evidence-led solutions—but in return, the health system must reward innovation, not punish it with red tape.
Regulators, too, must be empowered to act faster and with greater clarity. Healthtech companies that have proven safe and effective innovations shouldn’t face unnecessary delays. We must strike the right balance between patient safety and commercial progress, because without the latter, we risk losing companies to more agile companies overseas.
Finally, government must be more than just a funder, it must serve as a champion of UK-grown innovation. That means celebrating success stories, giving visibility to spinouts and startups on the global stage, and ensuring public procurement recognises the economic value of buying British tech.
