Retaining the UK’s startup crown
The UK started the new decade as Europe’s leading startup economy, but it will only retain that crown if the levers of public policy are pulled with entrepreneurship and innovation in mind. The opportunity of the first strong single party majority since 2005 will be offset by the challenge of delivering the UK’s departure from the EU, leaving limited time for domestic reform.
There is a core suite of cross-cutting policies that have become ‘table stakes’ for a dynamic startup ecosystem. Founders must be able to hire the best entrepreneurs and developers, wherever they come from. Companies and investors need the optimal funding and tax environment. We need the best digital and physical infrastructure to support growth. But to preserve the UK’s edge and to compete with the US, the government needs to go further — to think about how it can unlock innovation and entrepreneurship on a sector-by-sector basis, not just at an economy-wide “tech policy” level. Here are four of the many examples where fresh thinking is needed.
Equipping the future flexible workforce
The UK had been leading the debate on how to adapt labour rules to recognise the way work is changing — with more people managing multiple jobs and variable hours within jobs. The UK needs to re-engage on this key workforce issue, whether or not California’s approach to classifying gig workers (see AB5) is the right one. People are increasingly having to manage their work and finances like businesses and startups are responding. Fintechs are providing new products such as drawing down salary early and smoothing variable monthly earnings, which for the first time give flexible workers tools to manage their money beyond just credit cards, overdrafts and payday loans. The new government’s review of self-employment must go beyond broad labour market rules and tackle how the regulation of areas like financial services will help the self employed thrive.
Enabling new models of financing education and training
As we recognise that the age of a single career for life is gone, the future of work will also mean multiple different careers, requiring a regular cycle of retraining. Not all of this can or will be publicly funded, leaving a huge need for innovation around private financing.
Income Sharing Agreements are a key part of the solution. They allow people to finance retraining, knowing they will only pay back if they earn, unlike a loan. The US is ahead here — coding college Lamda School is already producing a new generation of highly skilled, highly paid software engineers. But the UK needs regulatory innovation to allow ISAs to flourish. They currently have to be authorised under the Consumer Credit Act, an unsuitable regime that essentially treats the product like a debt, in turn undermining the point of an ISA. We need the kind of regulatory forward thinking that helped bring peer-to-peer to market almost a decade ago.
Embracing innovation in care throughout life
The challenges posed by mental health, child care and social care all require distinct and complex solutions. But there is a key similarity in the challenges themselves: they are all human-intensive forms of care which tech innovation has been slower to reach. Where technology can help is around the fringes, so that humans can focus on high value care where they are really needed — and the regulatory framework needs to support this. The government has committed to finding a cross-party consensus for the funding of social care, a critical domestic priority which cannot afford delay.
In childcare, bringing tech into play is not about that dystopian vision of replacing a nanny with a robot — but it might be about allowing tech to better match people with the child care they need as and when they need it. Again, the regulatory framework needs to support this: currently, government-funded childcare can only be used in traditional childcare settings, which completely overlooks the fact that people working flexibly need flexible childcare. This needs to change.
Biting the micromobility bullet
The regulatory framework for automated vehicles will be crucial to seeing the gains from that fundamental shift in mobility, but there are more immediate priorities. The UK has taken its time to develop a policy view on micromobility, with electric scooters remaining illegal on both the pavement and the road. On one hand, getting this right requires a diligent and thoughtful approach which learns from the impact micromobility solutions have had on cities elsewhere. But both climate change and air quality are pressing priorities for towns and cities throughout the UK, and further delay to setting a micromobility policy framework is fast becoming inconsistent with the need to tackle these goals. If we want to get serious about pursuing these goals, we need action.
