This article first featured on Newsweek on 17th December 2016.
The British prime minister needs to speak the language of the modern economy.
British Prime Minister Theresa May made her big pitch to business this week, declaring during a speech in London that she leads a government that is “unequivocally and unashamedly pro-business.”
Yet what the prime minister intends as a statement of intent will be seen by many in business as a case to answer. It is not only Brexit causing concern among the nation’s business owners; the government’s rhetoric and approach to business under her new leadership has also been the subject of many raised eyebrows. “Industrial strategy” can sound like the language of the past when there are so many opportunities to supercharge industries of the future.
Few would dispute the prime minister’s central case that business must do more to reinforce its contribution to wider society. Yet the characterization of business as a miscreant, while justified in some important cases, risks causing a wider disaffection than is perhaps intended. Moreover, the positive agenda the May government is seeking to set around business—a “modern industrial strategy”—risks falling flat with a generation of founders who feel it does not speak to them or their companies.
In understanding business sentiment, it is important to recognize how far and fast the U.K. economy has changed since the financial crisis. According to government statistics, there are now 5.5 million businesses in the UK; an increase of comfortably more than a million since we entered recession in 2008. It is not just the number of companies, but the type and attitude.
In that time, the U.K. has also risen from being a relative laggard to being ranked Europe’s most entrepreneurial economy. A tech sector, which was until recently based around a handful of major success stories, is now a teeming hub for innovators and fast-growth companies. The U.K. is now home to 18 of Europe’s 47 “unicorns:” technology firms valued at over a billion dollars. Today’s economy is one where the momentum is being provided by entrepreneurs, rapidly-growing scale-ups and future industries from fintech to cyber security.
Needless to say, this is just the U.K. chapter in what is a global story. As the tech investor Saul Klein put it at the recent Web Summit: “Technology companies have changed the face of global capitalism in the last 15 years.” He showed that, while in 2001 Microsoft was the only tech company in the top 5 publicly-traded US companies, in 2016 all five are tech titans: Apple, Alphabet, Amazon, Facebook and Microsoft, the sole survivor.
In the U.K., the fires of an entrepreneurial economy have been lit in the last decade and government has done much to helpfully fan the flames. From Tech City to StartUp Britain (which I co-founded), the British Business Bank and Start Up Loans, the 2010-2015 government put its weight behind initiatives—well supported within the entrepreneur community—that helped accelerate both practical support for businesses and a thriving entrepreneurial culture that continues to gather pace.
None of that has formally changed since Downing Street changed hands, but the language we are now hearing is starting to raise questions about whether the new administration’s heart is really in it. And to work, it really does have to be.
Rohan Silva, who advised David Cameron and George Osborne on tech policy, wrote recently that he and his colleagues were stunned in the early days of the coalition by the mandarins’ addiction to big business at the expense of small. The Cameron government did much to rebalance that focus, but there are signs that it risks slipping back in that direction. There undoubtedly must be due attention on key players, such as Nissan, but that imperative cannot eclipse the need to focus on the jobs and businesses of tomorrow too.
If the start-up surge was one of the great achievements of the last five years, the commercial frontline of the next five will be the success of scale-ups—those companies that grow to create jobs and value at exponential speed. That flywheel is already beginning to turn, but the impetus behind it cannot be seen to falter.
Last night’s speech, in the most establishment of settings at London’s Guildhall, felt too much like the language and priorities of yesteryear. To win the confidence of business, Theresa May needs to start focusing on the new establishment—entrepreneurs.