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7 November 2014updated 20 Aug 2021 8:45am

Why we should fight the stigma against government involvement in technology

With a persistent stigma against the role of the state against its involvement with business of any kind, we must fight this to promote state help for technology. 

By Dan Holden

On the first of October 1963, Harold Wilson gave his most famous speech; he declared that a new Britain would be forged in the white heat of scientific revolution. Fifty years later, the role that government can and should play in the heat of technology is of paramount importance.

There is a pretty persistent stigma about the role which the state plays in new industries and technologies, but that stigma is misplaced and driven solely by ideology. Contrary to the stigma, the moment the state gets involved in business and technology, it does not turn an organisation into a Terry Gilliam-esque absurd bureaucracy, but rather it can have the direct opposite effect in nurturing early growth.

Singapore is perhaps the most popular example used to prove the worth of state involvement. Singapore is a very successful country with booming capitalist credentials, when in fact they enjoy a significant role being played by the state, with 22 per cent of their national output being from state-owned enterprises. Taiwan’s story is a comparable one; they are a highly successful economy with 16% of their output from state-run enterprises. Singapore and Taiwan are favourite examples of the economist Ha-Joon Chang to show that state intervention can in fact be positive for businesses and can help them to flourish.

It is not just the success of Asian economies with high-end manufacturing and technology that disprove the dead hand of the state on business. Ha-Joon Chang talks about the immense achievements of the American military, which helped develop the modern computer. Channel 4’s economics editor Paul Mason points out the beneficiaries of state intervention as including Concorde and the technology that makes up an iPhone. The state can and does intervene in technology and is very successful in doing so. To move forward  and bring about the white heat of technological intervention, we need to cast aside this ridiculous stigma.

So where would the state intervene? And in what way? Perhaps state intervention is the wrong phrase, with the wrong connotations when it comes to technological development; maybe a comparison with early intervention is more appropriate. As with early intervention, government help with childcare pays for itself through the increased tax revenue of parents being able to work more. Investment in R&D is much the same.

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A few months ago techUK released their manifesto for a more digital government, in which they named their criteria for the next government. Included in the demands was a requirement for government to have a ‘digital minister’ in each department, for migration to be easier and for growth outside of the south east be encouraged. The manifesto represented a wish on behalf of techUK to engage with the government, to encourage their involvement in order to grow the sector. techUK represents 860 businesses, including multinationals, small and medium sized businesses; for an organisation like that to want government to get involved with the digital economy in a big way shows that we are nowhere near the reality of anti-interventionist stigma.

In the Labour party’s policy review, Jon Cruddas and Jonathan Rutherford went to great lengths to stress the impact of the new digital economy upon our societal make up, much the same as happened with the industrial revolution. The parallels with the sentiment of Wilson’s speech are as clear as day; the future for the UK will be created in the white heat of technological advancements. But for that to happen properly, the state must play its role in that. Gone are the days of the lone genius stumbling across a staggering invention, now we research institutes and team efforts;  the state must live to its role nurturing invention and improvement.

Without wanting to too bluntly crowbar in a Velvet Underground reference, the state must not only get involved with the white heat of technology by supporting technological advancement; they must also be the leading light for the sector. As techUK’s manifesto states, the digital economy cannot be confined only to Silicon roundabout must be a nationwide occurrence and the government can be the leading light on this; the white light/white heat approach. Surely any government program based on the lyrics of Lou Reed is worth doing?