Monday, March 30, 2015

UK Election - its importance to the Innovation Economy

It's that time again. Elections in the United Kingdom (or disUnited Kingdom if you prefer).
It's the time when Politicians and the Media seem to be on the edge of hysteria, the time when love/hate relationships become strained due to ill-judged pronouncements and sorting out who believes in what is extremely difficult. 

I'd be preaching to the converted were I to stress the importance of all those eligible casting their votes.  I consider myself privileged to being able to do so as a UK citizen, having qualified some 36 years ago. Like many who were not born here, I'm profoundly grateful for the opportunity to live in this open, tolerant, free society and to be able to contribute in some way to it. 

It seemed like that to me, even on our arrival in the UK in December 1976 - a time of depression, 3 day weeks, strikes, the winter of discontent etc.

What a transformation we've been through! From the "sick man of Europe" to the heart and soul of Enterprise and Entrepreneurship in Europe in just a generation.  
During this time, I've led the building of 2 successful companies as Entrepreneur, invested in more than 50 startups in the UK ...(and a fair few in the US and Europe) and helped Saul in the formation of Seedcamp (Europe's premier accelerator program) so I have 'lived' this transformation through its ups and downs.

There is still much wrong, still too many under-educated, under-employed, too many clinging on to past glories. Too many of our leading FTSE 100 companies have yet to embrace or recognise the impact of the digital revolution and are under-investing in transformation.
Nevertheless, the cultural shift towards Enterprise and all that it's capable of delivering has been profound.
For this, some credit must be given to successive Governments who have helped create the framework in which we now operate.

My own experience of involvement in "Tech City" has provided some insights into how governments can enhance or hinder progress. 
When Tech City was conceived -or rather named- in November 2010, I was one of the sceptics. After all, Silicon Roundabout had been named by software designer Matt Biddulph, of Dopplr (later sold to Nokia) in the Moo shared workspace on the Old Street Roundabout some years previously - in 2007. Those of us in the startup tech scene had seen the cluster building rapidly for at least 5 years. We'd been banging the drum for London as a global centre for Tech development since the turn of the century.

It seemed to us "insiders" that the Government was jumping on a bandwagon, using their large megaphone to drown out the other noise and claim the credit for itself. All of which it did very effectively.
Tech City sat inside a framework of a larger ambition which seeks to make Britain "the best place to start and build a business" - the fact that Europe's brightest and best keep setting up here must mean we are on our way to achieving this aim.

Tech City was simply a brand, a name to give a set of policies designed to encourage enterprise,  get government out of the way and encourage a mutually supportive community. Some of these policies have had a profound effect.
Tech City proved to be a forum in which No10 (and 11) could listen to people in the industry from which many of the policies were derived.
Some examples of these policies include:
  • The EIS scheme has attracted many millions to the startup world by channeling tax incentives via angels directly to individual companies - far better use of funds than some government agency investing in companies who can't obtain funding elsewhere. 
  • The entrepreneurs visa continues to bring talented, enterprising people to these shores
  • Entrepreneurs tax relief. ....10% capital gains tax for founders
  • Encouragement of the LSE to create the "fast growth sector" 
  • Promoting successful entrepreneurs as role models
  • Facilitating regulations enabling new Fintech models such as Funding Circle, Transferwise, CrowdFunding platforms, P2P lending to be developed. 
  • Enabling - (or at least not blocking) sharing economy platforms. These platforms release entrepreneurial activity and utilise under-used assets
The UK has a lot going for it - with or without Tech City and the close interest shown in it by David Cameron and George Osborn. Much would have been achieved anyway thanks to:
  • The attractiveness of London as a city for young people
  • The UKs geographic position between East and West  ( which accounts for much of the City's pre-eminence too)
  • Having the world's business language, English
  • Having 3 of the world's top universities 
  • A strong creative industries base ....film, books, music, arts, advertising AND
  • Being part of the European Union 
Britain has to continue to embrace new technologies and new business models, adapting regulation as rapidly as possible to accommodate them. We have to continue to be outward looking and to compete globally for talent as well as investing heavily in developing our own. 

The enormous challenge of the New Industrial Revolution which is bringing greater prosperity but destroying many jobs in its wake can only be faced by a rapid acceleration of our education programme and in this regard, the introduction of computer coding into primary schools is a welcome step as is the acceleration of independently governed free schools.

So, however you voted on May 7th, this is a plea to all political parties to recognise the role that the tech sector plays in driving growth and prosperity and the importance of building on the enterprise culture now so well established in Britain. 

Further reading:

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