UK tech scale-ups trail in board-level AI expertise, risking growth
Research from Think & Grow indicates that UK technology scale-ups risk missing out on growth opportunities by not including artificial intelligence experts on their boards.
The study found that only 32% of the UK's fastest-growing technology scale-ups have AI expertise at board level, trailing behind the 40% of FTSE 350's largest tech firms that have appointed AI specialists to their boards.
Analysis suggests a connection between board-level AI expertise and higher company revenues. FTSE 350 technology companies with AI experts on their boards reported average revenues of GBP £6.8 billion, a significant contrast to the GBP £953 million generated by firms lacking such expertise.
The trend was also observed among scale-ups themselves. Half of UK tech scale-ups with annual revenue greater than GBP £50 million reported AI expertise on their boards, compared to just 15% of peers with revenue below this threshold.
Board composition trends
Efforts to recruit AI expertise to company boards have gained momentum in recent years. The research found that board directors with AI backgrounds typically serve an average of three years, while the average tenure for all board directors stands at five years, suggesting that companies are making relatively recent appointments in this area.
Alongside analysis of existing boards, the research highlighted future intentions. A third of technology companies surveyed plan to appoint individuals with AI experience to their boards within the next 12 months. However, 13% of companies said they have no plans to bring in AI expertise at the board level in the coming year, despite rising investor interest in artificial intelligence.
Recent figures from the Department for Science, Innovation and Technology and HM Treasury show that UK AI companies secured GBP £2.9 billion in private investment in 2024, with average deal sizes reaching GBP £5.9 million. Companies in the AI sector contributed GBP £11.8 billion to the UK economy during the same period.
Implications for growth
Think & Grow's report notes that AI expertise is increasingly valued as growth companies seek funding and aim to compete more effectively.
Companies without AI expertise on their boards risk losing ground to competitors and stifling growth.
Jonathan Jeffries, Co-Founder of Think & Grow, said, "It's a challenging climate for many sectors but there is huge investor appetite for high-growth tech companies - the issue is that many of those who secure funding are unable to maximise the opportunity to propel growth as they lack key expertise on their boards. AI is transforming business and society - ambitious tech companies won't fulfil their potential if they don't embrace it.
"The most successful companies weaponise their board connections and expertise to gain a competitive edge - UK tech companies need to ensure that they are building boards that are capable of overcoming upcoming challenges and leveraging commercial opportunities if they're going to scale effectively."
Upcoming report
The research findings form part of a forthcoming report from Think & Grow, titled 'Breaking & Remaking the Next Generation of High Impact Boards', which is set for release in November.
The research draws on analysis of board composition at 25 of the UK's fastest-growing technology scale-ups, as listed by Sifted 100, and the 25 largest tech companies on the FTSE 350, evaluated by market capitalisation. It also includes survey data from 400 board members and senior decision makers at technology companies with up to 500 employees.
Think & Grow states that companies are increasingly seeking AI knowledge at board level to help navigate market complexities and maintain a competitive position as they expand.
