The British political class has been so distracted by Brexit over the last two years, that we have failed to take a lead on new technology that will deliver the next generation of economic growth, argues Sebastien Kurzel
Brexit has been so distracting that the government has been unable to focus on anything else. All politicians have been rubbernecking at the Government’s catastrophic failure to achieve any form of satisfactory deal. The result is that the last two years have been an absolute desert for interesting, innovative policies.
One victim of this has been the lack of energy the Government and other politicians have been able to put into backing new innovative industries. This is particularly devastating as the UK has a long history of home-grown technology entrepreneurs, from Tom Chapman at MATCHESFASHION.COM to Mustafa Suleyman at Google DeepMind, who have founded innovative firms that have driven growth in the UK. That is exactly what we need now.
In fact, part of the reason for the UK’s boom under Margaret Thatcher in the 1980s and 1990s was that we were one of the first countries in the world to allow for the adoption of electronic trading. This gave the UK a head start – and left everyone else in the dust. As the BBC has written, “London’s switch in 1986 from traditional face-to-face share dealing to electronic trading helped it outpace its European competitors and become a magnet for international banks.”
Before the Brexit process started, we were doing much the same for new technology again. For example, we had become a world leader in the adoption of blockchain technologies and we had started to provide an innovative regulatory system for self-driving, autonomous cars.
In fact, in a demonstration of how far ahead the government and the UK really was, we had even set up the Centre for Connected and Autonomous Vehicles. The idea – which was definitely right – was that providing a flexible, open regulatory environment for new technology would encourage industry leaders to base themselves here rather than elsewhere, and could lead to a boom in jobs in five or 10 years once those industries had taken off.
I am not necessarily arguing that these bets on specific industries will always pay off – or even pay off more often than not.
For example, it looks like the promise of blockchain was oversold, and I would not be surprised now if blockchain and cryptocurrencies were, in 10 or 20 years times, words that you might only find in a museum on curiosity. As Nouriel Roubini has written, “Boosters of blockchain technology compare its early days to the early days of the Internet. But whereas the Internet quickly gave rise to email, the World Wide Web, and millions of commercial ventures, blockchain’s only application – cryptocurrencies such as Bitcoin – does not even fulfil its stated purpose.”
But the fact remains: if the government keeps its eye on the ball and provides a flexible, ambitious policy environment for a number of different emerging technologies, then at least one of them might pay-off – and the pay-off could be very large indeed. Again, just think of the Big Bang in the 1980s.
The interesting thing is that the potential growth of these new industries and technologies will probably have a much more significant impact on our economy than our trade relationship with the EU, although, of course, that is important too.
I think this puts into context the travesty of the last two years. Despite taking a lead on many countries within these different areas and strands of technology, while some momentum has continued to carry us forward, we are now behind where we would have been if we had been able to focus on these industries in a more dedicated way.
In fact, even more than that, while this momentum appears to have kept us in the game for technologies that we backed five or six years ago, we have completely missed the boat on newer techs that only fully emerged over the last two years or so.
A few examples come to mind. First, it seems like cannabis and related marijuana derivatives might become a big growth area over the coming years. The UK has undoubtedly fallen behind other jurisdictions, including states in the US and Canada, in reforming legislation to attract these businesses.
Secondly, we have lost our lead in the adoption of next-generation cellular networks. We had previously been leaders in this field, but we have now fallen well behind. 5G has already begun to roll-out in countries like the US and South Korea, albeit in strictly limited and non-mobile form. It is expected to be rolled out to another 30 cities in the US by the end of the year.
5G is also in the offing in the UK by the end of the year too, but will BEIS and DCMS have the capacity to make sure that this continues apace and that the regulations are flexible enough to accommodate the various different applications that 5G offers? That is not clear.
Overall, Brexit has sucked so much air from the government that we have lost our leadership in many areas of technology. With the end of Brexit hopefully in sight, it is time to get back on with the work of making sure that the UK is the most attractive country for next-gen technology.