Sound familiar? A political party, out of office for more than a decade, seeks power promising to build a leading global economy in science, technology and innovation.
This isn’t a description of 2024, but 2010, when – alongside this lofty pledge – the Conservative manifesto included case studies on Silicon Valley and the technology sectors of Japan and Germany.
It isn’t surprising that opposition parties want to associate themselves with the parts of the economy seen as the most dynamic, forward thinking and representative of the future. Six months after taking office, David Cameron went on to officially launch ‘Tech City’ at east London’s Silicon Roundabout. This was one way of demonstrating that his party had modernised and understood the up-to-date version of Britain it sought to govern.
Now, Labour wants to do the same. Even before the election was called, it had been reported that Labour is due to host a gathering of founders and senior operators from across UK tech.
The timing is significant as London’s long-held crown as Europe’s premier tech hub is being challenged by Paris, which has won attention as a leading centre for talent, particularly in verticals like AI. Just last week the French capital hosted its biggest and most highly-anticipated edition of VivaTech, its annual tech conference, which I attended. The scale of the event was eye opening and Silicon Valley firms were out in force.
So, how should a prospective party of government be thinking, and talking about, UK tech? And what are the pitfalls to avoid?
The UK’s tech ecosystem has evolved significantly since Labour was last in power. So, firstly, the party needs a clear-eyed view on where strengths lie and on the North Star objective to pursue. Often in policy circles this is discussed either with reference to creating a British version of whichever of the US tech giants happens to be front of mind that day or ‘turning London into Silicon Valley’.
But by defining the success metric in this way, there’s a risk of underselling the areas where Britain already punches above its weight: in fintech, ecommerce, biotech and much more besides. That’s not to say the UK doesn’t need to develop new superpowers, but as we’ve seen with Macron’s advocacy of the tech sector in France, this can be done in a way which draws from a country’s unique strengths, not simply trying to copy and paste California of the early 2000s.
In a similar vein, a future government would be wise to avoid building up a small number of firms as ‘national champions’. As we saw with Matt Hancock and Babylon, putting businesses on a pedestal can create unrealistic expectations and it would be a mistake to put the success of the entire ecosystem on the shoulders of a small number of firms.
The objective of channelling more capital towards technology firms – including from pension funds – is shared by Labour and the Conservatives and has received widespread endorsement. It’s understandable, particularly at a time when public finances are stretched, that policymakers often frame problems primarily in terms of allocating cash. But funding alone isn’t necessarily the main issue which needs to be addressed for UK tech – there has never been so much dry powder in the ecosystem for startups and scaleups.
Policymakers may find that other levers, like broadening access to talent, or designing systems like regulation and procurement to operate in a ‘startup-first’ way and incentivise innovation make more of a difference – even if they are less straightforward to deliver politically. The way the Coalition government approached the nascent fintech sector in the early 2010s could provide a useful case study.
At the same time, there’ll be areas where a future Labour government wants to reserve the right to be tougher with emerging sectors – or where the regulatory approach set by the government doesn’t need to be torn up and re-started from scratch. As ever, greater clarity on the direction of travel will mean that businesses can plan ahead.
Elections represent a generational shift within Parliament – a trend set to be magnified in 2024 with record numbers of MPs retiring. Tech native MPs, who grew up in a post-internet age, will make up a much larger chunk of Britain’s lawmakers after July. In this vein, greater emphasis on technology as a driver of growth will be matched with tougher scrutiny. As more details of Labour’s plans emerge, startups or scaleups looking to engage with Westminster and Whitehall will need to get to grips with a wider set of voices, advocates and actors with a stake in the future.
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