(Bloomberg) -- The UK risks falling behind in key technologies such as AI and semiconductors if the government doesn’t urgently overhaul its policies and regulations, a group of almost 1,000 technology companies has warned. 

TechUK, a lobby group whose membership includes Alphabet Inc., Amazon.com Inc. and Apple Inc., said in a report published Tuesday that Britain was a “broken” economy for growing startups and described its regulation as “expensive and awkward.”

The report underscores growing doubts over the UK’s post-Brexit attractiveness to business, at a time when homegrown companies like Arm Ltd. are looking abroad for investment and growth opportunities. 

It follows Microsoft Corp.’s rebuke of Britain after its antitrust watchdog, the Competition and Markets Authority, blocked its acquisition of videogame maker Activision Blizzard Inc. Microsoft President Brad Smith will this week meet with UK Chancellor Jeremy Hunt to voice his frustration about the CMA’s decision, Bloomberg previously reported. 

TechUK’s 60-page document provides policy recommendations addressed to “the next government” ahead of the country’s next general election, which has to take place by the end of January 2025. These include better long-term planning and delivery, and reforming tech regulation to better support growth.

Although the report acknowledged UK strengths such as early-stage startups and fintech, it outlined a litany of problems.

TechUK Deputy Chief Executive Officer Antony Walker said in a press conference that companies wanted “more clarity and more certainty” about the government’s approach to regulation.

The London Stock Exchange undervalues tech businesses compared to New York’s Nasdaq and pension funds under-invest in British companies, while local pension funds invest just 0.3% in private equity compared to 9% at their US counterparts, the document said. 

The 2022 introduction of stronger national security investment screening “struck the wrong balance” and hurt investment, techUK added.

Other issues highlighted in the report included the high relative cost of UK visas and lab space and problems connecting to the electricity grid that deter investment in power-hungry businesses, such as data centers and semiconductor factories.

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