In the last decade, Britain’s tech scene has come on leaps and bounds. Judged by the amount of venture capital investment, we’re head and shoulders above our European counterparts.
So when the government announced (and subsequently re-announced ad nauseam) its desire to make the UK “the next Silicon Valley” or a “science and tech superpower”, it did so knowing that we started from an already strong position.
No doubt that tech lobbyists will be chewing various ministers’ ears asking for an array of newfangled schemes, funding pots and the like to nudge us towards attaining Bay Area status.
Yet as important and helpful as some of these could be at the margin, we need to expand our tech policy horizons.
That means getting the basics right. Policymaking aimed at supporting entrepreneurship can all too often fixate on niche issues while neglecting the important factors that determine whether an economy stagnates or flourishes.
These important factors don’t always have a direct line to tech entrepreneurship. Take housebuilding, for instance. Bricks and mortar are about as far as you can get from the ethereal, AI-enabled startups now capturing everyone’s attention. But the former is crucially important to the success of the latter.
As we set out at The Entrepreneurs Network in our new report, it’s people who make an economy. But if those people don’t have anywhere to live, that economy necessarily stays limited in size. Deep labour markets, facilitated in practice by densely populated, liveable cities, on the other hand, permit people to specialise and create the cornucopia of different goods and services we benefit from every day.
When large numbers of a diverse set of people can live close to one another, agglomerative forces can take hold, and it is this more than anything else to which we owe our economic accomplishments – especially for intangibles-heavy industries such as tech where spontaneous interactions are paramount.
The problem here, though, is that the last time the now-hallowed target of building 300,000 houses a year was hit, the prime minister was James Callaghan (that’s 1977 for the non-historians).
It’s not just more houses we need to spur agglomeration, but better transport links too. Many British cities lag behind their European equivalents when it comes to connectivity. According to the Centre for Cities, commuting by public transport to city centres from the suburbs is easier and faster in Europe – on average, 67% of people can do it in under half an hour, compared to just 40% of people in Britain.
Meanwhile, it’s estimated that British cities have 48% higher road congestion levels than similarly-sized US cities, and 15% higher than those in Western Europe. Slow commutes kill agglomeration, and speeding them up should be a priority for a government intent on growth.
Unconventional policy to boost tech
It might not be a carefully crafted, headline-grabbing policy to announce, but simply allowing people to move to and live in the most productive areas of the country is perhaps the single best thing the government could do to deliver on its mission of becoming a tech superpower.
Build an adequate supply of houses, and so much more will fall into place – and I’d wager ministers could fret a lot less about developing bespoke and intricate schemes to correct for problem X or issue Y relating to the tech sector.
Of course, more conventionally entrepreneur-adjacent policies still warrant attention. Access to talent is one of the most unifying pleas we hear from the founders we engage with. Immigration might be a thorny topic, but the contribution high-skilled foreigners make to the British economy is immense.
Enacting keyhole policies, which make it easier for clearly talented individuals to move over here to work while still respecting voters’ demands for control, are eminently possible, and would mean we don’t have to self-sabotage and pull up the drawbridge to gifted individuals.
Downing Street’s ambition for Britain’s tech ecosystem is admirable. In the bid to deliver it, ministers should be minded to channel the creativity of the founders they are seeking to empower – unconventional and unrelated policies might just be what is required.
Eamonn Ives is the head of research at The Entrepreneurs Network.
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