State of UK Deep Tech 2024 | Read the report

Deep tech is driving transformative change across industries and addressing some of the world's most pressing challenges. This latest annual report provides a comprehensive analysis of the current landscape, exploring its future potential, key advancements, and the steps that need to be taken to unlock its full impact.

What is deep tech?

Deep tech refers to technologies that build on the fundamental principles of engineering and science to create novel solutions and are recognised as being capital, time, and R&D intensive. Being grounded in cutting-edge advances in engineering and science, deep tech innovation offers solutions to the world’s most complex environmental, economic and societal challenges.

It can be challenging to find a universally applicable definition for deep tech. By its very nature, the term encompasses a broad and evolving spectrum of innovative technologies, and what constitutes deep tech can vary based on the perspectives and metrics of the different stakeholders concerned. It is also important to recognise that something that is innovative, and deemed deep tech today, may at one point in the future become commonplace.

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Deep tech encompasses a broad spectrum of innovative technologies.

Within this report, we define deep tech as encompassing seven key areas:

Manufacturing and materials

Advancing processes through innovations in 3D printing, advanced manufacturing, and cutting-edge materials science to enable sustainable and efficient production.

Robotics, hardware and chips

Driving automation and computational advancements with robotics, drones, semiconductors, and nanotechnology, transforming industries from logistics to electronics.

Networks

Building smarter, more connected systems with innovations in Internet of Things (IoT), communications, networking, and supply chain technologies.

Healthcare

Revolutionising health outcomes with breakthroughs in biotechnology and emerging healthcare technologies tackling pressing health and resilience challenges.

Frontier applications

Exploring new horizons in spacetech, construction technology, and immersive technologies like augmented and virtual reality.

Energy

Leading sustainable innovation through emerging energy technologies and cleantech solutions that address climate and resource challenges.

AI and computing

Transforming industries with artificial intelligence, quantum computing, blockchain, and agile cloud technologies driving next-generation computing.

Why is deep tech important?

Driving economic growth

Deep tech companies are shaping new industries, creating high-value jobs, and fuelling economic development. Their impact is evident in both established markets and emerging ecosystems.

Providing solutions to global challenges

From decarbonising energy systems to revolutionising medical diagnostics, deep tech is uniquely positioned to tackle the world’s most complex challenges. Its reliance on cutting-edge science ensures scalable and sustainable solutions.

Catalysing innovation across sectors

The multidisciplinary nature of deep tech fosters innovation at the intersection of fields. Collaborations between sectors such as AI and energy or robotics and healthcare illustrate its transformative potential.

Key insights

VC investment in the sector has slowed since the high point of 2021 but still consistently attracts over £5 billion in annual venture capital. A smaller group of companies are now receiving bigger cheques as investors become more selective. 
AI and healthcare continue to dominate the deep tech investment environment, with each sector securing more than £1 billion in value in the first half of 2024     
Global interest in the UK’s deep tech sector is increasing, with foreign firms participating in over 300 deals annually since 2021. 
Investors need specialised training as the UK faces shortage of investors with relevant expertise, negatively impacting domestic investment.

Entrepreneur viewpoints

Henrik Hagemann, Co-founder, Puraffinity

We face significant barriers. Access to capital remains challenging, as deep tech often require longer development cycles. Scaling up from lab to industrial applications is another hurdle, requiring substantial investment and partnerships.

Brian Cobb, VP, Pragmatic Semiconductor

Deep tech companies operate at the cutting edge of science and engineering, pushing the boundaries of what we know and can achieve.

Wenmiao Yu, CO-founder, Quantum Dice

Facilitating easier international market entry is critical as it would enable UK quantum companies to scale more effectively, drive technology adoption, and establish a stronger global presence

Katerina Spranger, Founder, Oxford Heartbeat

Deep tech applied to healthcare can bring solutions to the hardest problems of our time. This is where the future of medical innovation lies; it must be given space to develop so that clinical practice can benefit from technological advances that have already reached other fields (e.g. aerospace), enabling every patient to receive cutting edge care of the highest standard.

Pierre Paslier, Co- founder Notpla

Deep tech companies need innovation and breakthroughs in engineering and technology to thrive. It is incredibly important that the right conditions are curated for this to happen. Strong financial support, access to the best talent, partnership with like-minded, visionary organisations and the right regulatory and policy support.

Dorian Haci, MintNeuro

The UK semiconductor industry contributed £12 billion in turnover in 2021, hosting 12% of UK R&D spend. It is a bed of groundbreaking innovation, with particular strengths in research, design and IP.

Challenges for deep tech

Despite the huge potential of deep tech in both financial returns and on the world’s most pressing issues, companies face a range of challenges. These can include:

Long product development cycles: increased need for time, resource, and talent to develop the innovation to the point of commercial readiness.
Developing a manufacturing process: to increase production or to apply the process at-scale. This may also include developing new manufacturing facilities, which can be a capital-intensive requirement.
Scale-up investment: Benchmarked against other countries, the UK is under funding at this stage. This is especially a concern for deep tech companies, as they feel the common scaling challenges more acutely.
Intellectual property: The innovation will often form the basis of the company and be its core asset. An effective IP strategy is essential to protect the company and attract investors. University spin outs may also face the added challenge of fragmented IP resultant of tech transfer practices in the organisation of origin.
Validating the product-market fit: Deep tech companies must work against the typical model, whereby the problem and end user are defined before investing time and resource to develop the solution. Instead, they must identify the problem, develop an innovation through research/engineering, before being able to validate the market, posing considerable market risk.