A new report from Tech Nation shows that despite recent political turmoil, the UK’s tech sector still punches above its weight.
Based on the relative size of our economy, last year’s scale-up tech investment was 2.5 times higher than would be expected. We can rightly brand ourselves a ‘tech nation’, having created 35 per cent of tech unicorns – that is $1bn+ valued businesses – across Europe and Israel. Britain's fintech firms lead the world. It's our number one sub-sector, with high-growth fintech firms receiving around £4.5bn in investment between 2015 and 2018.
From time to time, founders, companies and even nations should take time to reflect on the positives. For the tech sector, that time is now. But not for too long though. For anyone who prefer their glasses overflowing, check out my thoughts in CapX on how we can do even better (tl;dr we need more international talent, less Nimbyism and better infrastructure).
Cutting off one's nose to spite the face doesn't come highly recommended. In related news, Tesco's boss has called for the introduction of an online tax to "save" the high street. Our Research Director Sam Dumitru debated the issue in City AM:
"The high street is undergoing massive changes. Adapting to creative destruction is always painful, but the solution isn’t to tax new industries to subsidise the old ones.
"Policymakers should instead focus on eliminating the barriers faced by businesses adapting to the changing retail environment. It should, for instance, be easier to get planning permission to turn failing shops into cafes or restaurants.
"Online sellers shouldn’t be punished for responding to changing consumer demand by offering goods at a lower price in a more convenient manner. E-commerce platforms such as Amazon have lowered barriers to entry and enabled small and micro-businesses to cater to every obscure taste out there.
"Worst of all, the reforms will do little to help struggling bricks and mortar retailers. The evidence suggests that commercial landlords respond to cuts by raising rents, leaving shopkeepers no better off. The only retailers that will benefit are those which own large property portfolios like, er, Tesco."
We appreciate there is an issue with multinational companies paying less tax less in the UK through creative accountancy than some traditional businesses. But the Tesco CEO’s proposal wouldn’t do anything to solve this (admittedly tricky) problem.
One nifty idea that has potential is moving to a destination-base for corporation tax: it is far harder to obscure where something is bought than where it is made. Martin Wolf has a useful explainer article in the FT.
Christina Richardson – founder of 3sixty – recently found that 78% of founders say that running a business has negatively impacted their mental health. And one of our Advisers – Guy Tolhurst, founder of Intelligent Partners – has taken it upon himself to drive awareness around the issues of mental health and entrepreneurship (read more about his story here and check out some of his videos to hear from other entrepreneurs talking about their mental health challenges).