Spending Preview

All entrepreneurs know the danger of living beyond their means. Do it for too long and the businesses they’ve struggled tirelessly to build can easily come crashing down. In today’s volatile economy, knowing how to balance prudence with ambition is a growing challenge – so spare a thought for Rachel Reeves as she prepares to deliver next week’s Spending Review.

For those with better things to do than follow the ins and outs of Westminster proceduralism, spending reviews are when the government of the day sets out its spending plans – largely for any items that can reasonably be decided in advance (as opposed to expenditure like benefits, which fluctuate with the economy).

We’ve known for some months now that this particular Spending Review will be ‘zero-based’ – meaning that allocations for departments will be reset to zero and all spending decisions will be taken from there, as opposed to making increases or decreases to existing budgets. That probably sounds more radical than it actually is, but nonetheless, in theory, everything is therefore up for grabs.

Where, then, might Britain’s startups hope to see the cash being splashed? Some ankle has been shown, with £15 billion of investment earmarked for transport projects across the Midlands, the North and the West Country. Knowing what we know about how underdeveloped labour markets are outside of London – primarily owing to weak transport connectivity, as opposed to so-called skills shortages – this investment should be applauded, and all the more so if proposed changes to the planning system really do make infrastructure delivery quicker and cheaper.

Meanwhile, Darren Jones, the Chief Secretary to the Treasury – or the Minister responsible for public expenditure in plain English – has repeatedly emphasised the importance of modernising the state and using new technologies to boost public sector productivity. While that could well pay dividends, it won’t come without upfront investment – and many tech founders will spy an opportunity to supply innovative solutions that cost-effectively improve public services.

Of course, given that all government outlays are ultimately financed by the hard work and toil of the private sector, plenty of entrepreneurs may sooner prefer that Reeves tightens the purse strings instead. With the tax burden at its highest rate in decades, if now is not the time to question whether more largesse is affordable, when is? Anecdotally at least, following hikes to Corporation Tax, Capital Gains Tax and Employer National Insurance Contributions, it seems that more of Britain’s wealth creators than ever are questioning the UK as a viable place to start and grow a business.

For reasons I set out in my latest contribution to our Three Big Ideas series (do subscribe if you haven’t already), I don’t think a mass exodus of entrepreneurs is just around the corner. But, if we become complacent, and keep funding spending increases through tax rises rather than broad-based economic growth, our finely balanced fiscal situation will become downright precarious.

Last Call

Entrepreneurs have enough on their plates to deal with without also thinking about influencing policymakers. That’s where we come in. If you’re a founder, please consider filling out our Entrepreneurs Survey so we can tell politicians what Britain’s entrepreneurs really think – with the cold, hard data to prove it. The survey only takes ten minutes to complete and will be open for another few days for final responses. If you’ve already completed it, don’t forget to RSVP to attend the launch reception of the first set of results.

We’re All Ears

On the science and technology side, we have some exciting opportunities coming up for these three groups in particular:

🤖 Those working with AI to solve economic inactivity (e.g. AI-powered solutions for recruitment, job matching or other ways to improve employability, training, and support for people not yet in work);

📚 Those with strong views on what data the government could help unlock to benefit your work and how to make the National Data Library useful for you (see our latest work on this, by the way);

💡 Those who have a positive or negative, successful or unsuccessful experience with Innovate UK.

If one of the above sounds like you, please drop Anastasia a line.

Three Big Ideas #36

Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.

In this week, Eamonn Ives on why a panel left him bullish on Britain, and what a new paper teaches us about the challenges of decarbonising energy use, while Anastasia Bektimirova discusses the ‘pivot penalty’ facing researchers.

Trappings of Power

Back in January, The Economist ran a piece outlining the “credibility trap” which the Labour Party found itself in once it went from being His Majesty’s Most Loyal Opposition to having its hands firmly on the levers of power. Prior to moving into Number 11, Rachel Reeves repeatedly sought to assure businesses by promising not to raise any of the main taxes and to abide by strict fiscal rules. Now faced with actually managing the country’s finances, there’s a strong argument that these guarantees are forcing the Chancellor into making sub-obtimal choices that make little economic sense in the long run.

News from the IMF this week that Britain’s future growth figures are expected to be higher than previously thought will therefore be well received on Downing Street. A bigger economy means bigger receipts for the Treasury, and thus fewer spending trade-offs. The credibility trap becomes that little bit less suffocating.

Perhaps more significantly, however, was that the revision came with what the Financial Times described as “political cover” for Reeves to amend her fiscal rules, opening up the possibility for her to extricate herself from the credibility trap. To promote stability, it recommended switching to annual, rather than twice-yearly, assessments of the public finances by the Office for Budget Responsibility, and “implementing additional revenue or expenditure measures as needed if shocks arise.” This wasn’t exactly a green light for radically changing course on tax, but it could grant the Chancellor grounds to have a more grown-up conversation about the nation’s fiscal situation.

Virtually all taxes drag on the economy, but not all do so in the same way. Economists generally see the wisdom in low but broad-based levies – such as income or consumption taxes – and warn against systems which impose high marginal rates and those which artificially distort individual decision making. It is these latter features which really destroy growth by discouraging economic activity. An historical example might be William III’s 1696 ‘Window Tax’; a more contemporary one would be Stamp Duty Land Tax, which stifles labour mobility by making it harder for people to move to where their skills are best deployed.

Whether or not Reeves takes advantage of the IMF’s helpful pronouncement is anyone’s guess. As much as it might make economic sense to rationalise the tax system, electoral sense may come up trumps. The pledge not to increase any of Income Tax, National Insurance and VAT was a signature manifesto commitment. Reform, now the main threat to many Labour MPs, are running on a platform to slash personal taxes considerably. The Government is still feeling the heat from its Autumn Budget which cut Agricultural and Business Property Relief.

That being said, Labour is still less than a year into governing. Four more will elapse before voters go to the polls again, and it’s not unthinkable that they will be more inclined to reward growth than they will be to punish backpedaling. Moreover, as evidenced by the recent howls from the farming community, it’s not necessarily true that the political consequences of hiking taxes on supposedly narrow groups are easily brushed aside – as may have to happen under the current rules if spending goes up.

With global economic volatility spiralling, this is not the time to abandon caution. But caution that prevents sensible adaptation is anything but. So far the Chancellor has frequently found herself boxed in, but this week’s IMF verdict was more than a minor upgrade in growth expectations – it was a route out of the credibility trap.

As You Wish
Building on a recent paper with the Tony Blair Institute (TBI) on how to build the National Data Library (NDL), our Head of Science and Technology Anastasia Bektimirova released follow-up work jointly with TBI this week, focused on what data researchers and innovators in academia and industry wish they had, and what’s getting in their way when trying to access and work with data.

It’s not a paper, but a website, mapping both barriers and opportunities. The findings are worth a read. Respondents from academia and industry have already revealed that it can take 50-150 weeks to access health data, HMRC Datalab has insufficient computers, some datasets haven’t seen updates for several years, compute power is “woefully poor,” and people are spending months just finding out what data exists. But the findings also give clarity about what’s possible. For example, detailed emissions data by industrial sites could accelerate decarbonisation, traffic and mobility data could provide “unprecedented understanding of accessibility, transport and inequalities,” and NHS records linked across care settings could transform treatment development.

The website is built as a living platform, designed to grow and become more useful over time, and inform NDL development as it takes shape. Anyone can share their insights, ideas, and frustrations related to data access. Ultimately, the NDL’s practical usefulness will depend on how well it meets actual user needs rather than assumptions about them.

Three Big Ideas #35

Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.

In this week, Eamonn Ives discusses a new paper emphasing the importance of reducing barriers to exit, Philip Salter implores politicians to consider the second-order impacts AI could have, and Jessie May Green writes about the unexpected opportunities emerging from the energy transition.

Nightmare on Parliament Street

First up, if you’re not one of the hundreds of founders who’ve already completed our Entrepreneurs Survey, now is the time to do so. It will take less than ten minutes, and the anonymised results will help us tell politicians and civil servants – as well as the rest of the country through the media – what entrepreneurs are currently thinking about the state of the economy. This is the most efficient way to have an impact (you’ll also be invited to the launch event). Most of the questions can be answered with a single click, but for those who really want to get into things, there is also the opportunity to write in your own words what entrepreneurs need from politicians.

I don’t want to sway you, but I wouldn’t be surprised to see a fair few mentions of the ongoing R&D Tax Credits debacle. For background, you may be interested in my thoughts on this matter from last year. Without wanting to sound overly dramatic, the fact is that the vagaries of HMRC are destroying the livelihoods and lives of entrepreneurs up and down the country, and denting innovation in the process.

As our Research Director, Eamonn Ives, wrote in his latest Big Idea, “it isn’t enough for a firm to suddenly decide that it can flip a magic R&D switch and have innovation follow as a result. Rather, […] innovation requires time, trial and error, and consistency to yield results.” He cites fresh academic research that finds that “persistent investment in R&D is critical for small firms to fully realise the innovation gains derived from the ‘learning effects’ and ‘success breeds success’ mechanisms.”

In short, HMRC is constraining the compounding effect of investment.

We’ve already heard enough horror stories to fill a Stephen King novel, but the more you let us know about your challenges, the stronger our case becomes when we’re advocating for you. We’ve already connected some of you to journalists to share your experiences in the media, and we will continue to do so. And we’ll soon be hosting a roundtable on this issue, so whether you’re able to add to the weight of evidence – or would like to be part of technical discussions about how to fix things – let me know.

Good News Travels

It’s the nature of our trade that we talk about problems, and how to fix them. But from time to time we need to celebrate what’s working, which is why I’m happy to share an opportunity to do exactly that from the Department for Business and Trade.

On the back of our input into the forthcoming SME Strategy, the Department for Business and Trade is looking to feature some success stories and case studies from entrepreneurs to reflect different themes of the strategy alongside innovative and impactful support programmes.

In the first instance they’re looking for a 100-150 word teaser which should include:

• Brief description (business or programme name, sector, location, type of government support you’ve already received);

• Impact highlight (across growth, productivity or community benefits);

• Innovation or unique approach that sets it apart (i.e., new product/service);

• Contact details of business for follow-up.

• If you send them to us, we’ll forward them straight on to the Department.

Loud Voices

Many entrepreneurs are – or will become – parents, yet the intricacies of managing a business while raising children are seldom talked about in depth. We would like to change that, and to create a space where parents feel safe to explore the challenges of running a business while also running a household. It is all being led by our brilliant Adviser, Kajal Sanghrajka – herself an entrepreneur and new parent.

First off, on 4 June we’ll be hosting the first in an online series on Parenting and Entrepreneurship. Kajal will be joined by Anna Sofat of One Loud Voice for Women and Zoë Dagless of Meliora Financial Planning. As you might expect, there are a lot of thorny policy issues to be discussed here. Find out more here.

WhatsUpdate

The ball is now rolling on WhatsApp. Anyone can join here for occasional announcements. Patrons and Advisers can join here for a closed group to coordinate on strategy, while Patrons, Advisers and Supporters can join here for a closed group for early event invites and ad hoc media requests. Our other groups are slowly getting off the ground, but we’ll develop these further following meetings and in-person events.

The TL;DR is this: if you’re keen to get early invites to our events and the chance to talk to the media, now’s the time to join us as a Supporter.

Policy Updates

Our Policy Updates newsletter is back. The first was in partnership with Kingsley Napley and focused on the Immigration White Paper. Read it here, and drop me an email if you want to partner with us on future updates.

Three Big Ideas #34

Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.

In this week, Eamonn Ives looks at what a new research paper tells us about maximising the effectiveness of R&D, Philip Salter discusses how non-tariff barriers are now the real impediments to trade, and Anastasia Bektimirova reflects on ARIA’s Summit.

Policy Update: The Immigration White Paper

During the Covid-19 pandemic, government business policy was constantly and rapidly changing. From not knowing what support was on offer, to uncertainty about what various rules actually meant, even the most clued-in entrepreneurs told us they were struggling to keep up. For that reason, we launched our Policy Updates newsletter – which aimed to provide information to entrepreneurs about what the latest developments coming out of Whitehall meant for them.

While the pandemic is now thankfully a distant memory, we think there’s still value in formally communicating to our network about what’s going on in the policy world – and to that end, we’re firing up our Policy Updates once again. We’ll only send these when we think there is a timely, relevant update that impacts a majority of entrepreneurs in our network. Alongside the team at The Entrepreneurs Network, we will work with trusted experts – lawyers, accountants, academics, economists, consultants – on these updates. If you’re an expert and would like to be considered for inclusion, please drop us an email.

Today’s Policy Update is about the changes proposed by the Immigration White Paper, which was unveiled last week. We know that many startups critically rely on international talent – from the staff they employ, to the people who found them, and the investors who back them. We’ve partnered with the law firm Kingsley Napley on this one – find out more about them at the bottom of the Policy Update.

Questions Time

First the good news. Right now, you can materially contribute to making the UK a better place to start and grow a business. The bad news is that it involves filling out this survey.

We get it. Nobody likes filling out surveys – least of all me. But this one really matters.

We want the insights of actual entrepreneurs – not simply sole traders or senior decision-makers in large firms, who already have their own ways of getting their views across. We pride ourselves on being the voice of entrepreneurs, so we’ve created a real opportunity for your voice to be heard by those in Westminster.

This isn’t something we wanted to do by halves – that’s why we’ve crafted it in partnership with the experts at Public First. We’ve tested it with real entrepreneurs and I promise it will only take you between six and ten minutes.

If enough of you respond, we’ll run it on a regular basis. Some of the questions in it will remain the same each time, allowing us to track trends on various issues, while others will focus on topical issues that might be dominating the conversation. Everyone on this newsletter will be able to feed into what we should ask.

As a bit of an inducement – not that you need it, of course – we’ll be inviting those who respond to a launch party for the results in the City of London next month at Wedlake Bell. Places for that will be on a first-come basis, so don’t delay – fill out the survey here.

Island of Stragglers

As you’ll know, one of the survey questions concerns visas and immigration. This was a last-minute decision in response to the Government’s Immigration White Paper, which was released on Monday.

It’s bad news for British businesses. Under the plans set out in the White Paper, fewer jobs will qualify for sponsorship as the skill threshold for Skilled Worker visas rises to degree level, with only some mid-level roles temporarily allowed under a new Shortage Occupation List.

At the same time, minimum salary requirements will increase, Graduate visas will be shortened to 18 months, and the Immigration Skills Charge will rise by 32% to £1,320 per year. English language requirements will be tougher, including for dependants. The path to Indefinite Leave to Remain will be extended to ten years for Skilled Worker visa holders, with some accelerated routes, and reportedly these changes could apply to current visa holders, subject to consultation.

As Nick Rollason, Head of Immigration at the law firm Kingsley Napley, explained in the Financial Times, the combination of higher fees, higher salary thresholds and a potential ten-year wait for settlement could push the total cost of sponsoring a skilled worker with a partner and two children as high as £67,000, if the employer bore the full cost.

If the ten-year wait is imposed widely, it would be disastrous for attracting and retaining talent here. If it applies to those who are already here, it would be immoral – and likely illegal, as was the case in 2009 when the government tried to do something like this with the Highly Skilled Migrant Programme (HSMP) visa.

A nod was given to the needs of entrepreneurs, with things like the Government looking into potentially doubling of the High Potential Individual (HPI) visa, which is exactly what we called for in Job Creators 2024. But as Bella Rhodes argues in City A.M., exceptional and entrepreneurial talent is just the tip of the iceberg. The risk isn’t so much becoming a nation of strangers, but becoming a nation of stragglers.

As you might expect, there are a lot of conversations happening about how to have an impact before some of this becomes law. If you’re keen to have your say – besides filling in the survey, which, of course, you’ve already done or shared – drop me a message so I can know to keep you updated.

Peer Review

As you may have spotted, on Monday we released a letter on the Data (Use and Access) Bill. Our request was a rather modest one. As I wrote for Forbes:

“The proposed amendments reveal a fundamental misunderstanding of AI development. They would impose crushing transparency obligations – like monthly reporting of comprehensive training data – that bear no relation to how modern AI systems are actually built.”

It was signed by the great and the good: Professor Lord Tarassenko (Oxehealth), Professor Alison Noble CBE (Intelligent Ultrasound), Sir John Michael Brady (Perspectum, Optellum, Naitive Technologies, ScreenPoint Medical, and Oxford Community Diagnostics Centre), Professor Niki Trigoni (Navenio), Professor Paul Newman (Oxa Autonomy), and many more besides. Lord Tarassenko went on to mention the letter in the House of Lords.

Drop me a message if you have views on this thorny but critical policy issue.

Lilacs Are New

This week also saw the release of the final report from The Lilac Review. I’ve been on its Steering Committee, so it’s wonderful to see this come to fruition. The Review sees the launch of the LILAC Centre for Disabled Entrepreneurship, the UK’s first flagship business incubator and research centre dedicated to advancing the success of disabled entrepreneurs.

Three Big Ideas #33

Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.

In this week, Eamonn Ives brings news worth cheering about for pigs around the world, Jessie May Green looks at potential growing opportunities in using wild plants for medical purposes, and a guest contribution comes from Bright Blue’s Will Prescott on a smarter way approach to the minimal salary threshold immigrant workers need to clear.

Open letter: Data (Use and Access) Bill

Today, we published an open letter to the Secretary of State for Science, Innovation and Technology, Peter Kyle, asking him to urge Members of Parliament and Peers to reject amendments to the Data (Use and Access) Bill that threaten to undermine the Government’s careful and consultative approach to legislating on copyright and AI development. Below is the text of the letter and the full list of its signatories, who consist of leading AI founders, investors and academics. Anyone wanting to also sign the letter can do so here.

The letter and signatories in full

Dear Secretary of State,

Artificial Intelligence (AI) presents a generational opportunity to grow the economy,  cement the UK’s strategic advantage in science and technology and reshape the delivery of public services for the better. British-based companies, researchers and institutions are already creating and using AI tools to make scientific breakthroughs, build businesses, improve health outcomes, enhance creativity and make people’s lives easier. 

Since coming to power, this Government has taken decisive actions to ensure Britain can lead the world in the development of new AI technologies. The publication of the AI Opportunities Action Plan sets out the laudable ambition for the UK to be an “AI maker, not an AI taker,” and provides a solid blueprint for a thriving ecosystem of AI developers and users.

We welcome the Government’s intention to follow the consultation process and to consider the impact of any proposals before developing legislative solutions. Unfortunately, amendments to the Data (Use and Access) Bill proposed in the Lords threaten to undermine that process. 

Tabled before the Government had an opportunity to review submissions to the consultation intended to help develop viable proposals for copyright reform, these amendments pose a serious threat to the UK’s potential to lead in AI. We appreciate that some Parliamentarians feel strongly about these issues, but hurried decision making of this kind will not deliver a sustainable outcome for British businesses seeking to develop and deploy innovative new AI services.  

The debate around AI and copyright is complex. Navigating that complexity is not helped by legislation that sidelines the considered perspectives of those who are directly driving innovation in Britain’s AI ecosystem.

As founders of and investors in British companies that are leading the charge to keep Britain at the forefront of the global AI industry, we ask that you urge Members of Parliament and Peers to reject these amendments and instead explore workable proposals that stand up to scrutiny.

Yours sincerely,

Professor Lord Tarassenko – Founder and Director, Oxehealth 

Professor Alison Noble CBE – Founder, Intelligent Ultrasound

Sir John Michael Brady – Founder, Perspectum; Founder, Optellum; Director, Naitive Technologies; Founder, ScreenPoint Medical; CEO, Oxford Community Diagnostics Centre

Professor Niki Trigoni – Founder and Chief Science Officer, Navenio

Professor Paul Newman – Founder, CTO and President, Oxa Autonomy 

Mark Girolami – Sir Kirby Laing Professor of Civil Engineering, University of Cambridge

Rodolfo Rosini – Co-Founder, Vaire Computing

Stephen Roberts – Co-Founder, Mind Foundry

Michael A. Osborne – Co-Founder, Mind Foundry

Professor Philip Torr – Co-Founder, Director and Chief Technologist, Aistetic

William Briggs – Founder and CEO, Naitive Technologies

Sarah Drinkwater – Solo GP, Common Magic

Jonathan Gilmore – Founder and CEO, DeepFlow

Irina Pafomova – Co-Founder, Zestic AI

Andres Guadamuz – Reader in Intellectual Property Law, University of Sussex

John Spindler – Founder, Twin Path Ventures 

Michael Slade –Founder, Retainit

Sam Bose – Founder and CEO, IntelliSense.io 

Oliver Cameron – Co-Founder and CEO, Odyssey

Jeff Hawke – Co-Founder and CTO, Odyssey

Alasdair Thong – Head of Sovereign Innovation, Alloy Therapeutics

Trade Wins

Typical. You wait months for a trade deal, and then two come along at once. But these are very different beasts. First, India; one of the world’s largest and fastest-growing economies, with a huge and youthful population. Here, a trade deal provides British entrepreneurs with easier access to a vast and expanding consumer base.

It should be acknowledged that this has been in the making since January 2022, but hats off to the Government for getting it over the line. As I said to Sifted:

“Given the strength of both countries in technology and services, opportunities will open up for British firms to offer fintech, edtech, and professional services in India without requiring a physical presence.

“Critically, UK entrepreneurs will benefit from being among the first foreign entrants in newly-liberalised Indian sectors, giving them an edge over competitors in countries without a deal.”

Having visited many of India’s big cities, I’m more bullish than most. A trip to Gurgaon sticks in my mind. It’s India's 56th largest city in terms of population, eighth largest in terms of wealth, and the country’s second-largest information technology hub. I met countless razor-sharp, hugely ambitious young people building incredible things. It goes without saying that India, like all countries, has challenges to overcome, but it also has a huge amount of potential – potential that we could tap into in more ways than just trade.

After all, everyone knows that many of Silicon Valley’s – and by extension the world’s – biggest companies are run by people hailing from the most populous democracy on Earth. The UK has also benefited hugely from Indian-born founders, as our Job Creators reports have shown.

Those reports also show that many of the UK’s most successful founders (as judged by company valuation) are foreign-born and come to the UK to study before starting and growing their businesses here. If the forthcoming Immigration White Paper limits the ability of people to stay here after graduation (as has been rumoured), the impact on the UK will be profoundly damaging to entrepreneurship. It would mean vast swathes of future high-potential firms won’t be built in the UK (it will also slam universities and local economies across Britain).

The other trade deal was, of course, with the US. While it’s understandable that the UK Government signed the deal, I think the more sober assessments of Britain’s broadsheets are about right, with Alan Beattie writing that “the pact is closer to a protection payment to a mob boss than a liberalising agreement between sovereign countries.”

For our part, as per our Towards A More Special Relationship report, in partnership with Rigby Group, we continue to make the case for small steps towards a better agreement. British businesses are certainly optimistic, expecting tariffs to be withdrawn within six months, according to polling by Boston Consulting Group.

Uncanny Valleys

Our Head of Science and Technology Anastasia Bektimirova sat down with Graeme Reid, Professor of Science and Research Policy at UCL, to discuss the forces reshaping Britain’s innovation landscape since the 1980s. Having advised governments on science policy over the years, Graeme shared thoughts on how academia-industry-government relationships have shifted over the decades.

“The valley of death weakness has been diagnosed many times. We know the problem and don’t need another review to confirm it. What we need now is a solution.”

This blunt assessment cuts to the heart of a peculiar affliction: diagnosing problems in our innovation ecosystem without implementing lasting solutions.

For example, “one of the problems is the turbulence in regional funding,” he explains, describing how promising initiatives are repeatedly replaced before they can demonstrate effectiveness.

“Just as it begins to show promise – five or seven years later – it’s replaced by something similar but with slightly different terms or people, essentially starting over from scratch.”

This pattern appears across the innovation landscape, from the challenges of science-based companies scaling up to academic-policy engagement. Read the full interview here.

Butler Did It

I’m delighted to welcome Buzzacott as our latest Corporate Partner and Iain Butler, their Head of Innovation Incentives, as our latest Adviser.

Iain specialises in R&D Tax Credits, but has spent ten years as an R&D team manager and engineer himself in the space, semiconductor, and media industries, so truly understands the challenges these teams face.

As he says:

“For the UK to truly thrive, it must bolster the R&D and innovation efforts of ambitious entrepreneurs and SMEs. We are committed to collaborating with The Entrepreneurs Network to ensure that SME innovation remains a focal point in Westminster’s discussions.”

We’ll be hosting a roundtable discussion with Buzzacott on R&D Tax Credits as part of our partnership. If the last few conversations I’ve had with entrepreneurs is anything to go by, I know this will be oversubscribed.

If you’re keen to discuss becoming an Adviser or Corporate Partner, you can find out more here, and book a time to speak with me here.

Tectonic Shifts

In our latest interview, Anastasia Bektimirova spoke to Graeme Read, Professor of Science and Research Policy at University College London. They discussed how the relationships between academia, business and government have changed in the last several decades and how these have impacted science and technology innovation in Britain.

Three Big Ideas #32

Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.

In this week, Eamonn Ives explains why de minimis exemptions on imports are a good thing, Philip Salter argues the case against restricting visas for international students, and Anastasia Bektimirova dives into how the design of AI microsites influences our perception of their messages.

Due Process

Timing is everything in politics: when to call that election, when to U-turn on an unpopular policy, and when the moment’s right to spend more time with the family. It also matters to those trying to influence politics. You can have the best ideas in the world – or the worst – but you need to wait for a window of opportunity. When it comes to AI and copyright, that moment is now.

We’ve been talking about this for a fair while, and back in January last year we set out the challenges in our ‘Ronseal’ paper: Can the UK become competitive on text-and-data mining for AI? While we didn’t take an exact line on the solution, we wanted to draw attention to the fact that other countries were moving faster than the United Kingdom in securing the legal foundations for training AI models, with Japan, Singapore and the European Union each providing competitive models for the UK to consider.

Over recent months, this issue has become front-page news thanks to artists like Elton John, Paul McCartney and Dua Lipa adding their celebrated voices to the debate. Sadly, I don’t think this thorny policy is going to be solved by even the genius behind Yesterday – anyone who has a simple solution to what’s going on is either deluding themselves or lying to you.

As a new survey of 500 UK-based AI developers and investors revealed this week, there is a near-unanimous reliance on text and data mining (TDM) – the process of using automated techniques to train AI models. Of those surveyed, 99% said TDM is essential, while 76% said the absence of a copyright exemption for TDM – like that in the US, EU, or Japan – would make the UK less attractive for AI investment

For our part, we have a modest recommendation: listen to experts, including entrepreneurs. This is actually the Government line, as Ministers and officials pore over the 11,000 responses to a consultation they launched on copyright and AI in December 2024.

However, this process could all be derailed. On the back of the Data (Use and Access) Bill – a separate piece of legislation which addresses a broad range of priorities related to data – Peers have proposed adding changes to that Bill regarding how UK copyright law is applied to AI services.

Among other things, it would require developers to disclose comprehensive information regarding all text and data used in the pre-training, training and fine-tuning of general purpose AI on a monthly basis.

These proposals have been introduced outside the process of consultation that was launched precisely to inform the Government’s approach on copyright and AI. It’s a divisive issue, but surely we can all agree that any proposals with significant implications for businesses and innovation should be considered through proper channels. What’s the point of asking industry for their views if they are just going to be ignored?

Now is the time to act. It may seem perverse to dynamic founders who can pivot on a sixpence, but Westminster is a place where inertia too often rules the roost. Once the legislative train leaves the station, it can become impossible to switch tracks – even when many on board know their going the wrong way.

If you’re a founder, investor or just an interested party, drop me an email to find out how you could get involved.

Take a Punt

On Wednesday, we are hosting our second Young Entrepreneurs Forum Meetup in Cambridge. If you are a young founder – or wannabe founder – in or around the area, it would be great to see you there. (If you know of any young founders who you think should know, either pass this on or tag them in this LinkedIn post, which also helps get the word out either wider.)

The Young Entrepreneurs Forum is an international project from The Entrepreneurs Network. It aims to connect and empower young entrepreneurs who are building incredible things across the world, and to influence governments to create better enabling environments for young entrepreneurs.

Three Big Ideas #31

Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.

In this week, Eamonn Ives argues the case for post-legislative scrutiny being written into laws from their conception, Philip Salter looks into how pets could be a gateway for approving more treatments for their human owners, and Jessie May Green writes about a new climate data initiative that promises to be a ‘planetary MRI’.

Group Think

We’re so back. Or more accurately, the All-Party Parliamentary Group (APPG) for Entrepreneurship is, of which we’re the Secretariat. We’ve got big plans for the year ahead, but are always open to new ideas, and very open to working in collaboration with others – more on this later.

We’ve been Secretariat of the APPG for Entrepreneurship since 2018, but APPGs have a far longer history, dating back, at least in a more formal structure, to 1937 when two backbench Members of Parliament set up an all-party American committee to extend the knowledge of the United States within the British Parliament and elsewhere. The British-American Parliamentary Group (BAPG) is still around and certainly has its work cut out!

APPGs offer MPs and Peers a way to collaborate outside the rigid structures of party whips. Over time, the number of APPGs boomed, with everything from Advertising to Zoos represented. As the number grew, so did the need for stricter regulation. As a consequence, there are now fewer APPGs overall, and fewer focused on those not-so-inconsequential topics of business and wealth creation. That’s why we think the APPG we run is one of the most important.

So how can you get involved? First, sign up for the APPG’s monthly newsletter. This will give you an insider’s view of what’s going on and coming up in Parliament that is relevant to entrepreneurs and those who support them. Second, let us know if you want to host an Officer or Member of the APPG for an event. And finally, we are looking for between three and five keystone sponsors to support the work of the APPG, so just let me know if this is something you’d be interested in.

We’re very excited about the APPG. Our Officers include Tris Osborne MP (Labour), Victoria Collins MP (Liberal Democrat), Lord Leigh of Hurley (Conservative) and Lord Bilimoria of Chelsea (Crossbench) – all representing different political traditions, but all united in their determination to do their bit in making the UK the best place in the world to start and grow a business.

We also have some exceptional Members, including serial entrepreneur Angus MacDonald MP, who founded eFinancialCareers among many other businesses, the Rt Hon the Baroness Neville-Jones DCMG (to give her full title), who sits on the Lords Science and Technology Committee, and rising star Callum Anderson MP who is the Parliamentary Private Secretary to Peter Kyle. The list goes on.

Truro to Tallinn

As we have argued ever since Britain voted to leave the European Union, it’s in each side’s interest to negotiate a UK-EU youth mobility scheme, replicating those we have with several other nations already. That’s why we welcome news that no fewer than 62 MPs have signed a letter calling for time-limited visas for 18- to 30-year-olds from Europe to travel and work freely in Britain, and vice versa. Briefings suggest that the Home Secretary, Yvette Cooper, is warming up the idea, albeit only if we insist on a ‘one-in, one-out’ approach to limit its contribution to net migration figures.

While I would like to see open travel, given the political constraints around immigration I’ve made this exact pragmatic case – after all, limited liberalisation is better than none at all. As regular readers may remember, I wrote:

“[J]ust 23,000 people came to the UK on Youth Mobility Visas in 2023, with as many young Brits going the other way (particularly to Australia). Also, most of these schemes are capped – Uruguay at 500 people, Canada at 8,000, and Australia at 45,000. We could negotiate for a capped EU Youth Mobility Visa scheme to offset the political risk associated with unexpectedly large numbers.”

Our country needs young blood. As our Research Director, Eamonn Ives, argued here last year:

“Like many countries, Britain’s population is steadily ageing. In 2022, around a fifth of the population were aged 65 years or older. Fifty years prior, the figure stood at 13%. Projections from the Office for National Statistics suggest that, 50 years hence, 27% of the population will be.

“While there are reasons to celebrate this trend – people living healthier, longer lives is surely a good thing – there’s no getting away from the fact that it also creates problems in need of solutions. A population which skews old means those of working age have to toil all the harder to cover the costs of pensions and other benefits.

“Allowing young, aspirational individuals to come into the country and contribute towards the economy is a surefire way to address this demographic dilemma. And if our analysis is anything to go by, it proves that immigrants play an outsized role right where it matters most – founding the fast-growing and innovative businesses that haul an economy into the future.”

On the subject of immigration, we’re on the lookout for a sponsor for Job Creators 2025. If you want to back one of our most impactful reports, get in touch.

Purposeful Profit

Britain’s Enterprise Management Incentive (EMI) is a tax-advantaged way to reward employees and boost the growth of smaller companies. But while the economy has changed since it was first introduced, EMI hasn’t always kept up – with some now saying that it’s no longer fit for purpose.

We’re keen to test ideas for how it could be improved to ensure it is delivering for the companies it’s trying to support. If you have thoughts on EMI – either as a business owner who has offered it, an employee who’s made use of it, or other outside expertise – let us know and we’ll be in touch.

Three Big Ideas #30

Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.

In this week, Eamonn Ives urges the Chancellor to call ‘cut!’ on tenuous taxbreaks for film studios, Philip Salter discusses the parallels between 17th Century brewing and our modern economy today, and Anastasia Bektimirova implores us to think of growth as a mode of transport, not a destination.

Guarding Golden Geese

Few policy issues hit as hard as tax. While entrepreneurs care about a lot – from access to talent and finance, to regulation and infrastructure, to making British culture more entrepreneurial – it’s only when changes to taxes are mooted that my inbox starts overflowing.

This is to be expected. While some think the art of taxation consists of plucking the goose so as to get the most feathers with the least hissing, entrepreneurs know full well that the real damage isn’t the hissing, but stopping them from creating the wealth that pays for everything else.

This week, the Tony Blair Institute released A Pro-Growth Roadmap for Business-Tax Reform. One recommendation I’m particularly keen on is allowing businesses to deduct the full cost of all plant and machinery expenditure (including on vehicles and, crucially for a lot of Britain’s startups, intangibles) and introducing ‘neutral’ cost recovery for buildings so that allowances keep pace with inflation and the time value of money.

All the way back in June 2018, my former colleague Sam Dumitriu wrote a report for the All-Party Parliamentary Group (APPG) for Entrepreneurship making one of the first cases for full expensing in the UK. For those with an interest in how policy change really happens, read this article from The Economist.

Another recommendation I’m pleased to see is the idea to swap the existing business rates system for a commercial‑landowner tax that only taxes unimproved land value, shifting formal liability to landlords and removing penalties on developing or upgrading property.

Our Adviser Andrew Dixon OBE deserves full credit for this policy idea, which the TBI report gives by pointing people towards his brilliant Taxing Land, Not Investment report. As I wrote at the time: “Business rates are a tax on investment, adding to Britain’s productivity woes. Introducing a Commercial Landowner Levy would remove a key disincentive to investment and reduce administration costs for thousands of business owners. This is exactly the sort of policy entrepreneurs need to thrive.”

But it’s not all roses. The TBI report also calls for Business Asset Disposal Relief (BADR), formerly Entrepreneurs’ Relief, to be scrapped. As entrepreneurs know only too well – particularly the thousands who have moved or are moving their business abroad – the relief has already been slashed, with the maximum amount of gains that are subject to the lower rate reduced from £10 million to £1 million in 2020, and the last Budget increased the tax rate on disposals from 10% to 18%.

While the report is right to point to the lack of evidence across the whole business population, we know from speaking to many of the world’s most successful founders that it has acted as a massive incentive for them to start and keep their businesses in Britain.

We’re keen to build the evidence base to prove this beyond doubt, and make the case that the Treasury should retarget the relief at founders who are scaling businesses to incentivise the world’s best entrepreneurs to start, grow and sell multiple businesses in Britain.

When the geese do need to hiss, we’re the megaphone (as we were when rumours swirled that Capital Gains Tax was going to be hiked significantly). All of which is to say, let me know if you think BADR is worth hissing about.

Protecting the Ecosystem

We’re launching a new meetup group for entrepreneurship ecosystem builders. As Natalia Loza, who is partnering with us on this, explains:

This gathering is for those working behind the scenes to make entrepreneurship thrive. Whether you’re leading or sponsoring an accelerator, venture builder, corporate innovation team, policymaking body, university innovation office, innovation agency, or any other venture support organisation – your work is vital in helping founders and businesses launch, grow, and succeed.

What’s in it for you?

• Meaningful connections with like-minded ecosystem builders

• Fresh insights from others navigating similar challenges and opportunities

• And yes – coffee, croissants, and great conversation in good company

Say WhatsApp?

After a bit of experimenting, phase one of our WhatsApp Community is working. Anyone can join our Community – just tap here. While you can’t post yet, you can respond to our announcements, which we try to keep to a couple per week.

We’ve also got our Adviser group up and running (request to join here) and the APPG for Entrepreneurship Advisory Board group (request to join here).

Next week, we’ll roll out our Supporters group and we’ll also launch our Entrepreneurship Ecosystem Builders (see above). Phase two will be opening up more groups through a comprehensive application form.

Three Big Ideas #29

Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.

In this week, Eamonn Ives urges founders to heed Pablo Picasso, Philip Salter makes the case for unshackling more public data, and Jessie May Green delves into why carbon credit markets could be falling short of their true potential.

No Uncertain Terms

In this week’s issue of Perennial Gale, I explore how political uncertainty weighs on entrepreneurship, investment and innovation. Drawing on recent research and real-world examples – from the fallout of Brexit to the policy whiplash after Trump’s first term – I show how unpredictable policy environments can stall new business formation, shrink investor appetite and slow productivity growth. Even whispers of tax changes have recently prompted founders to rush exits ahead of possible reforms.

But it’s not all doom and gloom. There’s evidence that some firms respond to uncertainty by doubling down on R&D, treating turbulence as a strategic window to out-innovate competitors. While uncertainty depresses aggregate activity, the entrepreneurial instinct to adapt and push forward remains a vital counterforce. As we await the next Budget and possible further shifts in policy, the question isn’t whether uncertainty will persist – it’s how the most ambitious firms will navigate through it.

In addition, we want to hear from entrepreneurs. We’re responding to a government consultation on e-invoicing, and we’re looking into accelerators and incubators. Get in touch with Eamonn or Anastasia respectively to feed your views in.