“Silicon Valley currently leads the world in terms of high-tech growth and innovation,” Jeremy Hunt told business leaders last week. “But there’s no reason why it’s so dominant.”
But he didn’t. These words belong to David Cameron in his speech at the Old Street junction in November 2010. What Hunt actually said last week was this: “I’d like to see a British Alphabet (the forerunner of Google), a British Microsoft… a trillion-dollar domestic company [market] container…. “This reflects the UK’s ambition to become the world’s next Silicon Valley.”
Fourteen years have passed and his ministerial ambitions have not developed. Hunt still sees creating a British Google as desirable: “the measure of success,” he confirmed. And he still thinks we’ll be impressed by that ambition.
Now there’s something else the Chancellor didn’t say.
“It was the first time in history that humans had landed a vehicle on a comet. It was British and built in Stevenage. And as the world will soon see, our Mars Rover is vastly superior to NASA’s.”
This is not a lie. Mr Hunt could also boast that “we are proud to have six high-tech manufacturing companies in the UK worth over a billion pounds.” And this will also be true.
Dyson generated revenues of £7.1bn last year, is admired globally and is currently growing faster than Google. It’s admittedly a little faster, but it clocks in at a healthy 9 percent.
Renishaw started life specifically to solve a problem with Concorde’s Olympus engines and has grown into a world-class company: no one measures as precisely as it does. The firm, a Questor stock tip, is valued at more than £3bn.
There’s no shortage of British tech minds creating wealth at Bamford or Rolls-Royce. Or at Oxford Instruments, whose late founder Sir Martin Wood invented the astonishing superconducting magnets that would eventually make MRI scanners possible.
Or within Airbus’s space division, there was GEC Advanced Electronics, which designed and built the Philae spacecraft that once landed on a comet. This is all British technology, and it’s even improving in places we don’t expect. I recently explained: “Our industrial areas are now real cathedrals of wealth creation.”
No one disputes that these are all technology companies; What else do you think they would do? – solving the most difficult technological problems. But what Silicon Valley has accomplished is redefining the word “technology” and shrinking it to largely refer to internet companies very similar to their own.
Conservative ministers bought it hook, line and sinker. Hunt was hosting a “summit” to talk London Stock Exchange into encouraging more firms to list on the stock exchange. But Hunt denigrates what we have actually achieved by making the world’s largest digital advertising company the pinnacle of our ambitions. He insults Britain.
We might ask whether a “British Google” would be practical or even desirable. The two trillion-dollar companies Hunt mentions are rare beasts indeed. Microsoft and Google are once-in-a-generation successes that propelled them into a dominant industry position through ingenuity and good luck. Microsoft, the biggest beneficiary of the microprocessor revolution, became the Google of the internet. These don’t come across very often.
Their success also required this kind of ruthlessness. In 2000, a judge ordered Microsoft to be broken up, but since no one wanted to take the pieces, Microsoft remained intact. Google is facing a series of major antitrust lawsuits just months away from a similar separation decision.
Last week, he offered to pay for the full amount of the damage in case it goes missing. He is also trying to move the case from a jury trial to a bench trial.
In reality, we don’t have the local scale to give our software companies a working start. “We don’t buy much software in the UK,” a successful software founder told me last week. It demands that governments facilitate software exports to the US, which is the big important market. Trade group TechUK echoes this claim.
What tech companies want is simple: a more business-friendly environment. Sometimes the best industrial policy you can have is for the government to take its foot off the throat of business.
But Hunt confirmed Rishi’s 2021 corporation tax increase from 19 per cent to 25 per cent, ending the super deduction. “Dyson now faces skyrocketing corporation tax, with any tax credits for research and development wiped out,” Sir James wrote last year.
Another thing Hunt doesn’t say (perhaps understandably) is that the US doesn’t really like market competition. Twenty years ago, British online gaming companies were faster to market, seen as much more reliable, and outperformed their American rivals. So the US government made online gaming illegal and arrested our executives when they arrived at US airports.
TS Eliot lamented in Little Gidding: “The end of all our explorations will be to arrive where we began.” The Conservatives’ fascination with British technology began and ended in the same place: California.