Software is eating the world. So said one of the leading Silicon Valley venture capitalists back in 2011 and he was right.
It’s hard to think of an industry that isn’t being affected – the recent taxi protests over Uber a tangible example of this disruption.
When we think about what the UK will be good at in the future, it’s clear that embracing the digital economy makes sense. It’s forecast to create 46,000 jobs and contribute £12 billion to our economy over the next decade.
As more of our lives moves online, including with the rise of wearables and the Internet of Things, effective regulation of personal data will be paramount.
Data protection laws will need to be updated to provide clarity in the digital age and ensure that we don’t stifle innovation.
While policymakers ask why the UK has yet to create a Facebook or a Google, they’re asking the wrong question. Because the truth is that we’re already very good at digital innovation – and only likely to get better. Over the last decade, the UK has created 11 so-called ‘unicorns’, tech companies worth over $1 billion.
For example we lead the world in financial tech – with companies like Transferwise, Funding Circle, Zopa, and Seedrs all based in London.
The challenge for policymakers is how to continue to support this innovation. Coadec is working on a Startup Manifesto to set out a comprehensive set of recommendations, but in the meantime, here are some thoughts.
The first point to make is that things are good, especially when you look internationally. The startup ecosystem in the UK is thriving, and in part that is down to the policy environment that already exists. In other words – don’t mess it up. I would like to see politicians commit to keep many of the initiatives that have been so successful for the next parliament – for example SEIS tax reliefs on early stage investment and the Government Digital Service.
That said, laws and regulations do need to be reviewed to bring them into the digital age. As an example, the sharing economy represents a massive opportunity for consumers to unlock dead assets. Yet we’re in an absurd situation where the High Court is being asked to rule by TFL on whether the Uber app counts as a taximeter.
Policymakers should be on the side of consumers, who benefit from competition and innovation, not incumbent vested interests. Before GPS tracking, taximeters were important to ensure consumers weren’t ripped off – but no longer, and now the LTDA are trying to use outdated regulations to block competition.
Digital skills are vital for startups, who depend on talented designers, coders and engineers to build their products. In the longer term, reforms to education will hopefully deliver. But in the shorter term we rely on immigration and current government policy is falling short. We make it too hard for entrepreneurs to come to the UK and found a startup, and we make it too hard for existing startups to bring in talent from outside the EU. On both counts I would like to see more leadership from politicians.
As more of our lives moves online, including with the rise of wearables and the Internet of Things, effective regulation of personal data will be paramount. Data protection laws will need to be updated to provide clarity in the digital age and ensure that we don’t stifle innovation.
Finally, many of the big decisions in coming years will take place in Europe, whether on copyright, net neutrality, or data protection. So it’s important that our ministers are standing up for startups when they get off the Eurostar in Brussels.
The digital economy is a massive opportunity for the UK, and can be an engine of innovation and growth for the 21st Century. We need politicians to continue to support this.
Guy Levin is the Executive Director of Coadec, a non-profit that campaigns for policies to support digital startups. He previously worked as a Special Adviser at DFID and DCMS, and as an adviser to George Osborne. He tweets at @guy_levin.