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Britain can't afford to leave the tech revolution to the rich

We need to widen opportunities for digital entrepreneurs, or risk being left behind. 

The story of how Britain’s great entrepreneurs built the superpower of the steam age is an incredible tale. Yet there is an inescapable and depressing truth. Down the ages to today, "enterprise" has proved a rich man’s sport. So, if we want Brexit Britain to become a great power of the cyber age its time to change the rules of the game. 

It was as early as the 1690s that Sir Thomas "Diamond" Pitt, grandfather of Pitt the Elder and the greatest interloper of his day, declared: "There can be no working without good tools". He reckoned £2 to 4 million was the minimum needed to make a start as an aspiring nabob (wealthy trader) in the booming East India trade.

Pitt was as fond of the advice "money begets money" as Nathan Rothschild was years later of his edict that "money makes money". And with a few honourable exceptions (like opium dealer William Jardine), a real "rags to riches" story is the exception not the rule in the history of great British enterprise. So have the rules changed in the 21st century? 

I interviewed many of today’s most successful entrepreneurs about history’s lessons, and some do indeed think the old laws of fortune-making have bitten the dust. Richard Branson told me: "Today’s thinkers and entrepreneurs have the world at their fingertips, and can rely simply on the strength of their idea to raise them the capital they need to get started.” 

But others were much less sure. "It is quite depressing when I think about it," said Martha Lane Fox, "but if you look at the people founding or running globally significant technology firms, it is overwhelmingly white, middle-class men." And the lesson is starkest when we look at the barriers to women. "This [technology industry] is a completely new industry," she adds "and not a single woman has founded or is even running one of the top globally significant businesses."

We can’t go on like this. Today, Britain is at risk of becoming a cyber-age also-ran. Where are the home-grown Googles and Facebooks? Of the top 300 new firms of the last 30 years, only a couple, like ARM, are British. There are just two British websites in the global 100 – and they’re sort of American really – and The total value of all European "unicorns" (those start-up firms valued at $1bn-plus) is just half the value of Facebook. And Britain now ranks 48 out of 60 in the global enterprise league table

Brexit, or not, this is no way for Britain to soar – or indeed lions to roar – not least because the new competition is ferocious. 

Next year, China will become the world’s number one science spender. China’s 89 “unicorns” are worth almost as much as America’s. China’s fintech and electric vehicles sectors are world leading. Cashless payments on apps like WeChat totalled $8.6tn last year, dwarfing the United States. In fact, China, the ancient inventor of paper money, is on course to become the world’s first cashless society.

If we’re to catch up we’ll need the brilliantly pithy analysis of Alec Ross, the Democrat running for Governor of Maryland. A former advisor on innovation to then-secretary of state Hillary Clinton, Ross’ battle-cry is "Talent is everywhere. But opportunity is not." He’s right, and that’s why things have to change with a revolution in the way we support our young people in the business of starting a business. 

Nearly 60 per cent of people aged 18 to 30 say "I would like to start my own business" – but only 13 per cent are in fact self-employed. Yet, if we raised our youth enterprise rate to the level of Germany or the United States, we’d create an extra 100,000 jobs.  

Ross is now leading the debate about bringing industries of the future – from cyber-security to genetic medicine – to his state, and is changing the argument about what kind of education makes sense for the kids of Generation Z.

Labour learned long ago the power of arguments about harnessing the white heat of technological revolutions. It's what inspired Wilson to propose a new ministry of science; a university of the air; radical expansion of Further and Higher Education; action to stop the brain drain; and the appointment of the first government chief scientist. It’s why Gordon Brown created the first ever long term framework for science. History tells us, it’s time to repeat the trick. 

Liam Byrne is Labour's shadow digital minister and his book, “Dragons: Ten Entrepreneurs Who Built Britain”, is out now in paperback

Liam Byrne is Labour MP for Birmingham Hodge Hill and Shadow Digital Minister. He is the author of Dragons: Ten Entrepreneurs Who Built Britain.


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Why Jeremy Corbyn’s evolution on Brexit matters for the Scottish Labour party

Scottish Labour leader Richard Leonard, an ideological ally of Corbyn, backs staying in the customs union. 

Evolution. A long, slow, almost imperceptible process driven by brutal competition in a desperate attempt to adapt to survive. An accurate description then by Shadow Chancellor John McDonnell, of Labour’s shifting, chimera of a Brexit policy. After an away day that didn’t decamp very far at all, there seems to have been a mutation in Labour’s policy on customs union. Even McDonnell, a long-term Eurosceptic, indicated that Labour may support Tory amendments when the report stages of the customs and trade bills are finally timetabled by the government (currently delayed) to remain in either “The” or “A” customs union.

This is a victory of sorts for Europhiles in the Shadow Cabinet like Emily Thornberry and Keir Starmer. But it is particularly a victory for Scottish Labour leader Richard Leonard. A strong ally of Jeremy Corbyn who comes from the same Bennite tradition, Leonard broke cover last month to call for exactly such a change to policy on customs union.

Scotland has a swathe of marginal Labour-SNP seats. Its voters opted voted by a majority in every constituency to Remain. While the Scottish National Party has a tendency to trumpet this as evidence of exceptionalism – Scotland as a kind-of Rivendell to England’s xenophobic Mordor – it’s clear that a more Eurocentric, liberal hegemony dominates Scottish politics. Scotland’s population is also declining and it has greater need of inward labour through migration than England. It is for these reasons that the SNP has mounted a fierce assault on Labour’s ephemeral EU position.

At first glance, the need for Labour to shift its Brexit position is not as obvious as Remainers might have it. As the Liberal Democrat experience in last year’s general election demonstrates, if you want to choose opposing Brexit as your hill to die on… then die you well may. This was to some extent replicated in the recent Scottish Labour Leadership race. Anas Sarwar, the centrist challenger, lost after making Brexit an explicit dividing line between himself and the eventual winner, Leonard. The hope that a juggernaut of Remainer fury might coalesce as nationalist resentment did in 2015 turned out to be a dud. This is likely because for many Remainers, Europe is not as high on their list of concerns as other matters like the NHS crisis. They may, however, care about it however when the question is forced upon them.

And it very well might be forced. One day later this year, the shape of a deal on phase two of the negotiations will emerge and Parliament will have to vote, once and for all, to accept or reject a deal. This is both a test and an incredible political opportunity. Leonard, a Scottish Labour old-timer, believes a deal will be rejected and lead to a general election.

If Labour is to win such an election resulting from a parliamentary rejection of the Brexit deal, it will need many of those marginal seats in Scotland. The SNP is preparing by trying to box Labour in. Last month its Westminster representatives laid a trap. They invited Corbyn to take part in anti-Brexit talks of opposition parties he had no choice but to reject. In Holyrood, Nicola Sturgeon has been ripping into the same flank that Sarwar opened against Richard Leonard in the leadership contest, branding Labour’s Brexit position “feeble”. At the same time the Scottish government revealed a devastating impact assessment to accompany the negative forecasts leaked from the UK government. If Labour is leading a case against a “bad deal”,  it cannot afford to be seen to be SNP-lite.

The issue will likely come to a head at the Scottish Labour Conference early next month, since local constituency parties have already sent a number of pro-EU and single market motions to be debated there. They could be seen as a possible challenge to the leadership’s opposition to the single market or a second referendum. That is, If these motions make it to debate, unlike at national Labour Conference in 2017, where there seemed to be an organised attempt to prevent division.

When Leonard became leader, he stressed co-operation with the Westminster leadership. Still, unlike the dark “Branch Office” days of the recent past, Scottish Labour seems to be wielding some influence in the wider party again. And Scottish Labour figures will find allies down south. In January, Thornberry used a Fabian Society speech in Edinburgh, that Enlightenment city, to call for a dose of Scottish internationalism in foreign policy. With a twinkle in her eye, she fielded question after question about Brexit. “Ah…Brexit,” she joked. “I knew we’d get there eventually”. Such was Thornberry’s enthusiasm that she made the revealing aside that: “If I was not in the Leadership, then I’d probably be campaigning to remain in the European Union.”