By John Bryson, Professor of Enterprise and Economy Geography
The Department of Strategy and International Business
This week marks London Tech Week (10-14 June) – a week intended to unite technology and talent in a world-class innovation hub. Like London, Birmingham Tech Week (taking place 7-11 October) will highlight the city’s growing technology scene. The rationale for holding a tech week is based on the emergence of the fourth industrial revolution in which technology, or tech, is transforming society and business.
Tech Week highlights the local strengths of the UK’s technology industry. Over the last 12 months, the UK tech sector has produced one unicorn (a privately held start-up firm valued at more than $1billion) technology firm every month. As well as this, more than a third of Europe’s fastest growing technology firms are based in the UK. The future prosperity of the UK is based on technological innovation, however, there are three challenges facing the UK tech economy:
- There are ongoing attempts by EU member states to persuade British firms to relocate. Emmanuel Macron wants to copy the UK by transforming Paris into the next London. In 2018, both Google and Facebook announced significant investments in Paris. Station F in Paris is the largest start-up business incubator in the world, providing space for up to 1000 start-ups. Facebook’s Startup Garage is located in Station F – the company’s first physical space dedicated to tech start-ups.
- It is often stated that ‘America innovates, China copies, and Europe regulates’. This is no longer true; China innovates and copies, but the EU continues to regulate. Under the constraints of the General Data Protection Regulation (EU) 2016/679 (GDPR), it is now impossible for anyone within the EU to create a business model that would lead to the establishment of a new Google or Facebook. The GDPR is a constraint on access to big data; Chinese tech firms have no such constraints.
- There are some interesting new UK initiatives to provide tech training in educational institutions. In the autumn, the UK will be opening 12 new Institutes of Technology (IoT) which will work closely with universities, further education colleges and companies, including Microsoft and Nissan, to provide STEM training (science, technology, engineering and manufacturing). Solihull College has been awarded an IoT that will target under-represented learners, facilitating clear opportunities for progression from school to high-level occupations. But this is only the start. What is required is a British educational system in which all learners can acquire the skills required to participate in the new tech era.
The UK is suffering from political inertia. Brexit is preventing the development of an integrated strategy that will position the UK as a prime competitor in the developing global tech economy.
The Brexit debate has been dominated by the ‘merchants of doubt’. This concept comes from a book published in 2010 by Erik Conway and Naomi Oreskes in which they explore how special-interest groups conduct highly sophisticated public relations campaigns to prevent government action. These merchants of doubt don’t require evidence-based research; creating doubt is sufficient to stymie political processes.
The UK needs to conclude the Brexit process by developing a solution that benefits the long-term future of the UK economy. There is no question that some form of Brexit is required and rapidly to free the UK from this period of uncertainty.