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 – google.co.uk and amazon.co.uk. 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