Three Big Ideas #22

⚡️ Eamonn Ives, Research Director

Household energy prices are set to rise by more than expected this coming April, taking the average bill to £1,849. People would be right to groan – in the United Kingdom, we already ‘enjoy’ some of the highest electricity prices in the world and the gap between ourselves and many of our close competitors is growing year on year. Of course, these high prices weigh heavily on Britain’s businesses too, especially those in energy-intensive industries like manufacturing.

One way the Energy Secretary Ed Miliband thinks we can remedy this is called ‘zonal’ electricity pricing. This approach would do away with the current national price for electricity, and instead split Britain into a number of zones where costs could differ between them. On its own, zonal pricing wouldn’t change the underlying realities of supply and demand that ultimately determine the price of electricity. However, it absolutely would trigger second-order effects that boost supply and shift demand to a more appealing equilibrium.

A growing problem with our national price for power is that we now often have to pay for renewables to stop generating so that they don’t overload the system with too much electricity. This is because while we talk of a national grid, we don’t truly have one, because the transmission infrastructure to transport power from where it is abundant to where it is scarce is woefully lacking. As we have installed more and more wind turbines and solar panels, the cost of these ‘curtailment’ payments have increased considerably – to around £1 billion last year.

Zonal pricing would send a signal for significant consumers of energy to move to where power is plentiful and therefore cheap – such as Scotland – and it may well blunt NIMBYism in areas where power is scarce and therefore expensive – such as the South East of England – given that people would more directly bear the costs of their opposition.

Of course, as I’ve pointed out before, the real route to cheaper power is to reform planning rules to enable developers to build more energy infrastructure more easily, but zonal pricing should be seen as a useful complement in that mission. Just as we’d think it bizarre to have a nationally enforced price for pints of beer or gallons of petrol, so too should we look upon national electricity pricing with similar scepticism.

🚀 Philip Salter, Founder

Elon Musk is back in the spotlight (was he ever out of it?) after Seth Abramson estimated on X that his IQ is only between 100 and 110. Back in the real world, however, there is more than enough evidence that he is a great engineer, entrepreneur and technologist. Founding, building and running Tesla, X, SpaceX, OpenAI, Neuralink, xAI, PayPal – and now to a large degree the US Government – doesn’t happen by chance.

If you don’t like his politics this might be hard to read, but as Noah Smith, who definitely doesn’t like his politics, writes: “Maybe saying that Elon has a 110 IQ makes you feel like you beat him in your little online fantasy world, but out there in the actual world, he is still ripping up your national institutions at breakneck speed.” Nate Silver weighed in yesterday, stating two truths that many people struggle to hold in their heads at the same time: while Elon is obviously pretty bright, this shouldn’t be conflated with moral judgment.

Nate has a more interesting point too. While most traits we’d associate with intelligence are positively correlated, Berkson’s paradox teaches us that two positively correlated variables appear negatively correlated when you restrict your view to only a subset of the population. In sports, this often results in the very best attackers in a particular sport being more likely to be weaker at defending. You don’t normally win the lottery in life twice. Of course there are exceptions, but they, as the saying goes, prove the rule. This explains Musk’s spiky intelligence.

Nate ends his excellent article by applying it to entrepreneurship. Clearly VCs in Silicon Valley and around the world are pattern-matching to the sorts of founders that fit the spiky attributes of someone like Musk. Those who are more balanced are passed over, or are attracted to professions like medicine. This leaves us with an important question: How spiky (in both senses of the word) do founders need to be to succeed?

According to Nate, this pattern-matching comes at a cost: “For every founder who gets a round of Series A funding, there are probably 10 or 100 would-be founders who would do roughly as well if they got the same chance.”

🌱 Jessie May Green, Researcher

When America pulled out of the Paris Climate Agreement in the belief that it was crippling their economy, many feared other nations would follow suit. Yet, a new report from the Confederation of British Industry (CBI), which sheds light on the UK’s green economy, gives hope to the view that growth and decarbonisation needn’t necessarily be in conflict.

The CBI’s report reveals that the UK’s green economy is growing three times faster than the overall economy. The net zero sector demonstrates a multiplier effect, with every £1 it generates creating an additional £1.89 in the wider economy. The sector has grown in terms of foreign direct investment (£20.1 billion in financial year 2023/24), gross value added (now totalling £83.1 billion) and employment.

Net zero businesses now support almost one million full-time jobs. These are impressive in terms of their productivity, with each generating £105,500 in economic value (38% above the UK average), and they also pay employees more (£43,076 a year on average). The net zero economy disproportionately supports jobs in areas outside of London and the South East. This is important.

In September, the UK closed its last coal power plant. The preceding succession of pit closures left a void in the primary and secondary jobs sectors, as well as in regional identity for many areas of the UK. Where coal mining once dominated, perhaps green manufacturing can move in. Batteries in Cornwall, EVs in Sunderland, offshore wind in Scotland, onshore in Wales – it’s already happening, and if the Government really does manage to reform planning rules, it will only accelerate.

Mitigating climate risk is essential to long-term economic growth – a sentiment shared by insurers and farmers alike. While others may be retreating from their climate objectives, Britain should pull out all the stops to position itself as the place for green industries to succeed.

Three Big Ideas #21

💷 Eamonn Ives, Research Director

Though the upstart political party Reform can count the number of MPs they have on one hand, it’s fair to say that they punch above their weight – and that Westminster should take seriously the things they have to say. On Monday, Rupert Lowe MP tore into Britain’s VAT threshold. He declared that it needs to be doubled, at a minimum, to £180,000 – to stop it “suffocating British small business” and “strangling growth.”

While I’m heartened to hear any MP stand up for the private sector, I’m not sure the diagnosis is completely accurate, nor the medicine quite right either.

It is true that the VAT threshold causes some businesses to curtail economic activity. Tax guru Dan Neidle recently estimated that perhaps 26,000 companies in the UK are stalling their growth so as not to hit the threshold. In tangible terms, this might be contractors not taking on jobs or tradespeople not hiring more labour. Altogether, it adds up to a major squandering of economic potential, missed tax receipts for the Treasury, and higher unemployment than the case might be otherwise.

That being said, a VAT threshold ultimately has to be set somewhere – whether that’s £90,000, £180,000, £1 million, or even £0. Currently, the UK has the highest VAT threshold in the world, more than twice as high as the EU and OECD average. Wherever it is set, a cliff-edge will be created, and economic activity will inevitably bunch just below it. We should come to terms with this reality, reduce the threshold and then use the extra revenues to reduce even more damaging taxes. (VATs are a pretty good – or, if you prefer, at least less bad – way of raising money to fund public services.)

Raising the threshold might sound like you’re doing small business a favour, but really you’d just be increasing the number of firms you coddle. Given that an estimated 3.2 million businesses currently sit under the threshold, the political logic far outweighs the economic logic of hiking it higher – but for the sake of sound finances and strong growth, don’t blame me for hoping the latter wins out.

💊 Anastasia Bektimirova, Head of Science and Technology

The pharmaceutical world just experienced its own “DeepSeek moment.” Much like DeepSeek’s emergence as an AI competitor built on leaner resources, a Chinese-developed cancer therapy recently outperformed a drug that generates $30 billion annually, sending shockwaves through the industry and demonstrating that we’re likely to see many more “DeepSeek moments” across various sectors in the coming years.

What’s noteworthy is how AI and biotech are converging. ByteDance, TikTok's parent company, has been actively recruiting computational biologists and establishing AI for Drug Design and AI for Science teams in the US. This expansion beyond social media into life sciences signals the company’s ambition to leverage its AI capabilities and vast data resources for biology, chemistry and drug discovery.

This raises important questions about national security and competitive advantage in science and technology. TikTok has confirmed that staff in China can access European user data, including from UK users. The former chief scientist at the US Food and Drug Administration has warned that “they could be doing large-scale hypothesis generation with all this data, and then they could be feeding that data into Chinese pharmaceutical companies or Chinese weapons manufacturers.”

The UK has taken preliminary steps by banning TikTok from government devices following security reviews, joining many other countries amid similar concerns. But the scale of data being collected from the wider user base – data with high value for both AI and biotech development – is likely to see growing calls for more comprehensive measures.

To maintain its competitive edge in AI, biotech, and the synergy of both, the UK needs to acknowledge these parallel developments and respond accordingly. If we want to excel in critical domains, we need to significantly ramp up our game. A new report from the Tony Blair Institute A New National Purpose: Accelerating UK Science in the Age of AI provides timely analysis of how the UK can become a global leader in AI-powered scientific discovery. Its recommendations on investing in AI-ready scientific datasets, software tools, and reimagining the institutional landscape are the kind of forward-thinking proposals the government should take seriously as competition intensifies.

🌳 Jessie May Green, Researcher

An essay by Dr. Jonathan Foley from 2021 did the rounds again recently. The piece, titled ‘Occam’s Razor for the Planet’ argues that simple climate solutions are often the best, so why waste time and money on complex ones? In the age of ChatGPT, NFTs and SMRs, some may consider this quite radical.

For those not familiar, Occam’s razor is a philosophical principle stating that the explanation requiring the fewest assumptions is usually correct. Here, Foley applies it to climate solutions, arguing: why pump money and resources into nuclear fusion and direct air capture, when that money and those resources could be channeled into solutions that are ready now, like wind and solar?

Yes, if R&D is successful, nuclear fusion would provide virtually limitless, clean, and safe energy with minimal waste. However, if unsuccessful, we risk losing the most precious of all things – time. As Foley writes, “Every year we wait for a promised technology is a year we pour additional billions of tons of pollution into the atmosphere, raising greenhouse gas levels even more and locking in further warming.”

The key here is don’t wait. Research into nuclear fusion and direct air capture will undoubtedly continue. While that is happening, don’t forget to be excited about the ready-to-go solutions, too. It may not be far-reaching, but addressing food waste in your local community is impactful work. It may not be sexy, but composting is just as worthy of start-ups as carbon capture and storage. For a treasure trove of inspiration, see Project Drawdown.

This is not to shun tech innovation. After all, electric vehicles and solar panels seemed nebulous at one stage. Foley merely lays down an interesting challenge to the pro-tech community, and to governments responsible for allocating resources. At what point do we give up on a technology because it is so obviously not the future? At what point do we divert resources to solutions requiring fewer assumptions?

Three Big Ideas #20

⁉️ Eamonn Ives, Research Director

Sometimes governments make decisions that actively impede the private sector – be it hiking corporate taxes or cutting off immigration pathways for skilled migrants. Quite rightly, these are usually met with criticism from businesses and trade groups alike.

But sometimes governments make decisions that should make life outright easier for the private sector, but which nevertheless draw ire from chief executives. Think here of the decision to push back the date for phasing-out the sale of new petrol vehicles, or when rules to regulate supermarket store layouts to discourage unhealthy eating were watered down. There’s nothing to stop any company who wishes to abide by the previously stated policies doing so voluntarily, yet it’s not unheard of for them to come out swinging when government changes tack.

Of course, one obvious explanation for why businesses complain is because they’re rent seeking. This theory states that incumbents actively embrace regulations if they believe it will be relatively harder for smaller competitors to comply with them – thereby allowing said incumbents to entrench their position in the market. I believe this happens more often than we’d like to admit, and as such I’ve always been rather sceptical when bosses insist on the need for ‘business certainty’.

With that being said, a recent post entitled ‘Chaos kills coordination’ by Brian Albrect got me thinking. In it, he cites compelling evidence that an increase in policy uncertainty noticeably hampers investment, production and employment. It isn’t hard to see why – particularly for risky businesses with long time horizons, if you can’t be sure what the world will look like five or ten years hence, you’d be forgiven for not taking the bet that things might pay off. In isolated cases, that’s a pity; but when it happens over and over, we all lose out considerably.

With these tensions in mind, how should governments approach regulating the business landscape? I think Brian hits the nail on the head when he writes:

“The goal isn’t to prevent all change, but to ensure changes follow predictable processes that maintain coherent and knowable rules, rather than creating arbitrary chaos. [...] Economic prosperity doesn’t require perfect policies, but it does require stable ones. A predictable, rule-based framework is what allows businesses to invest, workers to plan, and markets to function. Without it, we get paralysis, waste, and stagnation.”

📡 Anastasia Bektimirova, Head of Science and Technology

Every scientific instrument ever built, from a simple thermometer to the most sophisticated quantum sensor, expands the ways of understanding and collecting data about the world. Now, imagine an AI system that could simultaneously process data from all of these instruments or sensors, each measuring different aspects of reality. This is what Nicklas Lundblad, DeepMind’s Senior Director of Policy and Strategic Advisor, explores in his latest blog.

Nicklas writes:

“Imagine a military AI system that seamlessly integrates satellite imagery, signals intelligence, social media data, atmospheric conditions, electromagnetic signatures, seismic activity, and thousands of other data streams. This “hyper-sensorium” would enable the system to detect subtle patterns and correlations across immense and varied data spaces, revealing insights into troop movements, economic activities, and environmental changes that remain invisible to traditional, human-limited analysis. This unprecedented capability establishes a significant strategic asymmetry. Nations or organizations capable of building and controlling these advanced sensor networks would obtain a fundamentally different, deeper understanding of reality compared to those that rely solely on conventional sensors.”

With enough foresight, winners in this new frontier will gain economic and geopolitical advantages, while losers will fall behind. “Sensory competition,” as Nicklas writes, could mean new arms races, where success depends on who can best sense, understand, and respond to global developments.

It’s therefore reassuring to see that ARIA is ahead of the curve on this. The projects funded through its Scoping Our Planet opportunity space focus on innovative approaches to monitoring our planet. Each of them demonstrates just how granular data could get if the measurement tools allow. For example, one project will develop portable sensors that can fingerprint methane emissions in real-world conditions rather than just laboratories, while another one will use light from natural and artificial sources to create dense networks of sensors for monitoring cloud formation. Each new sensor type, every improvement in sensitivity or coverage, and their integration with conventional data sources, will unlock insights that were previously impossible.

🎓 Philip Salter, Founder

Unbundling is a familiar concept in technology, where Google Docs, Slack, Notion, Zoom and Dropbox have replaced Microsoft Office. But it’s not just tech where you can find it. Seemingly impenetrable institutions are being dismantled and reimagined in everything from banking, communications, defence, healthcare or transportation. Even religion has seen worship, education, community support and moral guidance split from established institutions.

In 'Unbundling the University’, Ben Reinhardt of Speculative Technologies thinks higher education should be next. He observes how universities have steadily accumulated a disparate number of roles – from moral instruction for young people to becoming a real-world dating site (and everything in between). For Reinhardt, the university bundle is like expecting every coffee shop to also include a “laundromat, a bookstore, and a karaoke bar.”

Reinhardt’s main area of interest lies in pre-commmercial technological research. He makes the case that breakthroughs here can happen much more effectively in a new institution: “Academia’s core structures and incentives revolve around education and scientific inquiry, not building useful technologies.”

He doesn’t pull any punches, describing universities as the most bureaucratic institutions in the world. He notes that tech transfer offices can drag out negotiations over draconian licensing terms for months or years: “These are not serious people.”

Reinhardt’s solution?

“A place for people with brilliant ideas to build atom-based technologies that won’t necessarily work as high-margin startups; to start projects that don’t necessarily fit into a specific bucket. These projects could evolve smoothly into bigger programs, baby Focused Research Organisations, or nascent companies; all united by a common mission to unlock the future.”

Find out more about Focused Research Organisations (FROs) in A New Model for Science, which we published alongside Convergent Research and the Tony Blair Institute.

Three Big Ideas #19

⛔ Eamonn Ives, Research Director

Long before Donald Trump was returned to the White House, the world knew to brace itself for international trade tensions. On Saturday, the United States’ President made good on his promise to introduce fresh tariffs – levying an additional 25% tariff on Canada and Mexico, and a 10% one on China. President Trump has also declared that tariffs will “definitely” be imposed on the European Union too.

After rushed conversations with the leaders of Mexico and Canada, in which they agreed to do more to tighten border security and tackle illicit drugs production, America has since ‘paused’ tariffs against their countries for a month. While this will be a light reprieve, what’s undeniable is that we’ve been plunged into a new era of precarious mercantilism.

Amid the first skirmishes in the unfolding trade war, the United Kingdom seems to have emerged relatively unscathed. Though President Trump has accused Britain of being “out of line” on trade, he added that things “can be worked out.” Exporters here will no doubt breathe a sigh of relief at that news, and some might even sense an opportunity to supply attractively priced goods to the US market – at least relative to their European competitors if they likely end up burdened by tariffs. Should blanket tariffs simply cause the dollar to appreciate against sterling – as indeed it already is – that’ll, ironically, incentivise Americans to increase their appetite for imports.

With all that being said, the last thing I want to come across as is optimistic. Tariffs really are still a dumb idea. The Tax Foundation’s Erica York has estimated these new levies would decrease the size of the US economy by 0.4%. Beyond that, tariffs shrink global markets, and consequently make the entire world a less productive, less innovative, and ultimately poorer place. As we’re already seeing in this instance with China, tariffs are seldom implemented in isolation – countries tend to retaliate with countermeasures of their own, further pushing us into a trade doom loop. And while the UK may be getting a comparatively easy ride from President Trump for now, how confident can anyone be that he won’t simply change his mind tomorrow? I would forgive most British executives for being bearish in their reading of the situation.

Economists near unanimously agree that tariffs are bad. It’s good that Britain has so far dodged a bullet, but to think that makes us a winner would be most misguided.

🌁 Anastasia Bektimirova, Head of Science and Technology

Last year, I asked Dame Angela McLean, the Government Chief Scientific Adviser, about the biggest obstacles she saw in achieving a more productive relationship between academia and government.

Her reply was threefold. First, lengthy timelines. Research is unlikely to feed into policy in a timely manner if peer reviews take months, followed by more months for academic journals to publish accepted articles. Second, language barriers that leave the two camps lost in translation. Third, the culture of disagreement, which is a large part of academic training and ways of working. You can only get so far when deliberation focuses mainly on why ideas won’t work. Debate in academic and policy work is crucial, but you need to get things done at some point too.

Last week, UKRI opened a funding call to develop the policy-to-research infrastructure that would facilitate policymakers’ engagement with researchers and support evidence-based policymaking. The aim is to enhance public and civil servants’ scientific skills and their ability to access and apply evidence by increasing opportunities for engagement with the research community.

While the primary goals here are welcome, the valuable spillover effects that could occur are what most excite me. This could organically encourage systemic adjustments in academia, promoting more policy-relevant work and a clearer understanding of what research outputs the government actually finds useful – and how the academic system, including its incentive structure, needs to be adjusted to be more conducive to this.

For some more food for thought on the topic, here’s a perspective from Tom Kalil, CEO of Renaissance Philanthropy and former Deputy Director for Policy at the White House Office for Science and Technology under Presidents Bill Clinton and Barack Obama:

“If I were a university president, and I had a public policy school, I would want to give professors the option of having tenure and promotion based on real-world impact, not just how many highly cited publications they had. I wouldn’t mandate that, but I would make it opt-in. In many cases, when you do see faculty doing this type of work, they’re doing it in spite of, as opposed to because of, the incentive structures that they face. I think there’s a lot more we could be doing to encourage faculty to work on real-world problems.”

🔋 Jessie May Green, Researcher

DeepSeek, according to some, has given us AI’s ‘Sputnik moment’. Last week, word spread that the development of its R1 model cost a fraction of other notable equivalents, with fewer training hours creating greater efficiency. This sent shockwaves. DeepSeek swiftly unseated ChatGPT as the App Store’s most-downloaded free app, and panic ensued in the stock markets as investors questioned the valuations of other AI developers.

While bad news for competitor shareholders, some say DeepSeek may represent good news for the climate. Projections for AI’s energy needs are concerning. Some estimate that AI could absorb 75% of additional power in the US through to 2035, and President Trump is fast tracking fossil fuel power plants to meet the demand. In theory, DeepSeek’s efficiency brings hope that we can have powerful AI without ramping up greenhouse gas emissions.

In practice, this may turn out to be a fallacy. Though fewer training hours may reduce electricity consumption in the short-term, this would be unlikely to last. As explained by the Jevons Paradox, when a resource becomes more efficient to use, energy demands and costs do reduce, but then demand increases, and thus overall resource consumption goes up.

Thankfully, AI electricity demand projections may not be realised but ‘expect the best, prepare for the worst’, as they say. The projections only reinforce the requirement to decarbonise energy and ensure that power is clean at the source. If only nuclear fusion could get its boots on.

Three Big Ideas #18

🔁 Eamonn Ives, Research Director

In one of my first Big Ideas, I discussed research that suggested that the arrival of Uber to a city caused the unemployment rate to decline, especially for those at the lower end of the earnings spectrum. In that piece, I said the findings were just “one more datapoint proving the importance of the sharing economy.”

This month, that body of evidence grew a little bit larger. A new paper from Matthew Denes, Spyridon Lagaras and Margarita Tsoutsoura reveals that individuals who have previously worked in the sharing economy are more likely to subsequently become entrepreneurs. They also find that this is especially true for “those who are lower income, younger, and benefit from flexibility. [As defined by those with dependents.]”

Theories advanced for why experience of the sharing economy seems to increase the likelihood of future entrepreneurship include on-the-job learning (backed up by data that shows gig-workers-turned-entrepreneurs generally start firms in the same industry that they gigged in), plus additional liquidity (which can be invested into creating a new business).

In my previous gig worker post, I argued that the growing evidence base on the sharing economy shows the need to proceed carefully when regulating labour markets. Even well intentioned measures could have harmful unintended consequences – with the least affluent in the economy bearing the brunt. At the risk of sounding like a stuck record, that argument remains as important, if not more, today as it did then.

🧮 Anastasia Bektimirova, Head of Science and Technology

While similar in name and research output, funding levels for biotech firms in Cambridge, UK differ greatly from those in Cambridge, MA. The Kendall Square area of the latter Cambridge, stands out in particular – with VCs pouring $14 billion into its 600 biotech startups, earning this single square mile its reputation as one of the world’s most innovative places (more thoughts on this here).

In an article exploring how a biotech startup from Cambridge, UK is trying to bridge the gap between British scientific excellence and US commercial savvy, The Economist explains that “much comes down to the deeper and more educated capital pools and greater appetite for risk in America.”

Science Minister Sir Patrick Vallance illustrated this well in his speech at the launch of the Science and Technology Venture Capital Fellowship at the Royal Academy of Engineering which I attended last week:

“For a decade or so as the Head of R&D at GSK, if I spoke to an investor in the US, the investor would very often know a lot about the science, would know exactly what was going on in different biotech companies, would know what competitors were doing, would know where the scientific problems were. If I had a similar conversation in the UK, nine times out of ten, it would be, ‘is the court diligent safe’? It’s a striking difference, and that’s really what this is all about. Ensuring that the very brightest people who understand finance as well as science and technology can be part of bringing this investment attitude to the UK, making sure that we’re prepared to take the risks, that more money goes into this space in the right and informed way, and in a way that understands the founder profile that needs to be pursued in order to be successful.”

I’m optimistic about the Fellowship, and, as ever, think it’s good when the government launches new initiatives and embraces a test-and-learn mode. At the same time, I wonder what an upside-down approach could deliver. We should be equally interested in people turning their deep understanding of science and technology into market foresight. We need to ensure an enabling environment is in place for scientists to have a more diversified impact portfolio – and reward that diversity. Policy-wise, this could mean better supporting the emergence and growth of small specialist funds led by people who are properly embedded in the research. After all, applying deep domain expertise to make informed investment bets and guide founders could probably count as impact alongside traditional academic metrics. In some cases, perhaps even more so than publishing a journal article.

🎓 Philip Salter, Founder

As part of a swathe of announcements to deliver growth, the Government has brought back to life the idea for an Oxford-Cambridge Arc. During the Johnson Government, plans were made, then scrapped, to build on the millions of jobs and the billions ‘the Arc’ already contributes every year.

As the Financial Times reports, achieving that requires more than just a train line – important though it may be. We also need the two world-leading universities at either end of the Arc to spin out even more incredible companies. Universities, however, are reluctant to cede much of their innovations, with one in four universities beginning negotiations demanding a 50% equity stake. “Investors balk at being accorded just crumbs.”

The article hints at the solution, comparing Cambridge University with Sweden’s Uppsala University, which usually “confers ownership on the originator.” Known as ‘Professor’s Privilege’, this system gives academics ownership of the intellectual property they create, rather than assigning it to universities.

Professor’s Privilege grants them the freedom to decide how best to use it – whether to release it to the world free of charge, or attempt to commercialise it independently, using pre-existing business contacts, or through a university Tech Transfer Office. As our paper Academic to Entrepreneur argues, numerous studies suggest that this system fosters greater innovation. It’s an idea deserving of serious consideration for any government focused on growth.

Three Big Ideas #17

💾 Philip Salter, Founder

According to the Government’s State of Digital Government Review, the public sector spends £26 billion annually on digital technology, yet nearly half of central government and NHS services still rely on paper forms and manual processes.

In the past decade, satisfaction with public services in the UK has dropped from 79% to 68% – well below private sector benchmarks. The report states: “Many UK public services still rely on phone calls, emails, letters, and in-person visits. HMRC, for example, handles 100,000 daily calls, the DVLA processes 45,000 letters every day, and Defra manages over 500 services accessed via paper-based forms.” Someone moving home must contact ten separate organisations, while managing a long-term condition or disability requires interactions with more than 40 services across nine different organisations.

Critical public services still rely on decades-old technology, with 28% of central government IT systems classified as legacy. Some police forces and NHS trusts operate with up to 70% legacy technology, posing significant cybersecurity risks and potential outages.

It doesn’t need to be like this. The report mentions Estonia in passing, which offers an online option for 99% of its services. As I wrote alongside Kirsty Innes in our essay on building a digital state for our Way of the Future collection, the future of government services shouldn’t be only about moving forms online; we need to copy the likes of Estonia and Singapore which automatically provide services to citizens instead of requiring them to apply.

🦾 Anastasia Bektimirova, Head of Science and Technology

Last week, I was at Phoenix Court to listen to their Co-Founder and Managing Partner Saul Klein and Bloomberg columnist Parmy Olson discuss her award-winning new book – Supremacy: AI, ChatGPT and the race that will change the world.

“We laud science but pretend industry is dirty,” Saul observed, drawing a contrast between British and American cultures. He then compared Demis Hassabis, CEO and Co-Founder of DeepMind, who recently won a Nobel Prize in Chemistry for AI-driven protein structure prediction, to Sam Altman, CEO and Co-Founder of OpenAI. While Demis is celebrated as a scientist, Saul explained, Sam is viewed as an industrialist. Where the UK is fidgeting with a degree of discomfort around the cult of the entrepreneur, the US doesn’t seem to raise an eyebrow.

I find the division between a scientist and an industrialist somewhat artificial. It’s possible to embody both – untapped innovation potential lies at this intersection. What often makes an outstanding scientist is the ability to navigate science with an entrepreneurial mindset – not necessarily driven by profit-making, but rather by an ambitious vision for impact. It just so happens that great ambitions can often lead to great rewards. As an industrialist, you strive for impact and lay the practical steps to get there. As a scientist, you make impossible things possible – bending reality to the will of ambition for impact.

When it comes to bridging the scientific and entrepreneurial worlds, I’m following ARIA’s updates with keen interest. As part of its experiment to diversify institutional models by teaming up with ‘activation partners’, it recently announced a collaboration with Fifty Years, which will launch its company creation programme in the UK to help translate breakthrough science into deep tech startups. There are more similar partnerships to come. Mechanisms like these that are breaking down the barrier between science and industry could drive the cultural shift we need.

🚦 Eamonn Ives, Research Director

Whether it’s finance or fashion or theatre, New York City leads the world in many ways. In other respects, it’s still playing catch up. One of those is road pricing for traffic – with the Big Apple only adopting it this month. In comparison, London has been charging vehicles to drive into its city centre since 2003, Stockholm likewise since 2007, and road pricing poster child Singapore has done so for nearly half a century.

Since 5 January, drivers entering a zone below 60th Street into downtown Manhattan between 5am and 9pm are now liable for a $9 fee, with higher charges for bigger vehicles like vans and trucks. Data released by the Metropolitan Transportation Authority suggests the scheme is working – with traffic already down by 8%, and increased speeds recorded across all tunnels and bridges in the affected area.

None of this should come as a surprise. Allocating resources – in this case road space, or perhaps thought of more accurately as a better guarantee of quicker, more predictable journeys – via prices is generally a far superior option to allocating them with time or other mechanisms. (For a whole list of other reasons to support road pricing in particular, read this.)

Yet while a step in the right direction, NYC’s congestion charge is far from perfect. It is not especially dynamic, in the sense that it doesn’t continually adjust to when demand – or traffic – is high or low. As Ethereum Co-Founder Vitalik Buterin explains: “Price uncertainty is better than time uncertainty (paying $10 more today is fine if you pay $10 less tomorrow, but you can’t compensate being 30 min late for a flight or meeting by being 30 min early to the next one).”

As a Londoner, my main takeaway from Manhattan’s belated embrace of road pricing is that we should think about how to improve our capital’s own scheme. Stagnating average road speeds suggest that the daily fee is currently set too low, at least during the morning and evening rush hours. New bands that apply a surge price between 7-9am and 5-7pm should be trialled. Furthermore, we should apply the spirit of congestion pricing to other aspects of London’s transport network. Adding an additional charge, for example, for tapping in and out at certain busy Underground stops which suffer from dangerously overcrowded platforms would smooth out numbers by incentivising people to use other stations.

Agglomeration is essential for successful entrepreneurship, and to maximise the amount we get in our cities, people need to be able to get around quickly. Short of building more infrastructure, the simple logic of prices may be our best tool for keeping places moving.

Three Big Ideas #16

🧠 Eamonn Ives, Research Director

Is Elon Musk a genius? A glance at some of his social media activity suggests maybe not. A look at some of the companies he’s helped build suggests maybe yes. But who’s to decide? One person who reckons they have the answer is University College London’s Professor Mariana Mazzucato – and it’s firmly in the negative. Posting on Musk-owned X this week, she declared: “He invented NONE of the TECH. Just bought stuff at the right time. More marketing than science.”

There’s certainly a kernel or more of truth in this. Rockets existed long before SpaceX, satellites before Starlink, online banking before PayPal, large language models before xAI and digging holes in the ground before the Tunnel Boring Company.

Should all this debar Musk from genius status though? No. First of all, innovation is, always has been, and always will be, an iterative undertaking where new insights are built on previous ones. I’m sure Mazzucato can reel off a list of names of people she does think are geniuses, all of whom would happily agree their individual contributions were influenced by the work of someone else.

Second, much as I wish society would do more to venerate invention, I’d question how positive a development that’d be if the form it took was reserving the term ‘genius’ only for scientists who tinker away on contraptions in the laboratories. Bringing any new technology into being – and then disseminating it throughout the economy – is a multifaceted process. It requires the ‘D’ as well as the ‘R’ of R&D, which economist Stian Westlake elegantly describes as “making inventions useful.” For this to happen, skilled managers and shrewd investors who can envision a radically different future are essential. I think Musk’s track record here suggests he’s pretty good at that side of the equation.

I don’t doubt that the esteemed Professor hopes for us all to enjoy a more innovative future. And in light of some of his more controversial opinions, to say the least, I empathise with the desire to take Musk down a peg or two. But thinking that someone’s politics renders their innovative contribution to the world worthless is simply an exercise in failing to decouple and childishness.

💼 Philip Salter, Founder

According to a new NBER working paper, the years spanning 1990 to 2017 saw a less disruptive US labour market than any prior period measured going back to 1880. The reason? General-purpose technologies (GPTs) like steam power and electricity dramatically disrupted the twentieth-century labour market, but the changes took place over decades.

The authors see signs that the US is returning to a period of labor market disruption. The evidence they cite includes the end of job polarisation (the shrinking of middle-skilled jobs due to technological advancements), the stalling growth of low-wage jobs, the increase of STEM occupations from 6.5% of US jobs in 2010 to nearly 10% in 2024, and the decline in retail jobs by 25% over the past decade.

AI is likely the next GPT. And while the full scale of AI is still unfolding, early indicators – such as rapid private investment in AI-related technologies and growing STEM employment – signal that it is already playing a significant role in labor market changes.

So what’s the likely timeline? Remember, it was 1769 when James Watt patented his separate condenser for the steam engine, and 1882 when Thomas Edison opened the first commercial central power plant at Pearl Street Station. So history teaches us that these things can take a while. But this time it could be different – it’s a topic Dwarkesh Patel’s and Tyler Cowen politely, and constructively, disagree on.

Bonus: Speaking of AI, don’t miss our reaction to the AI Opportunities Action Plan, which the Government published on Monday.

🧭 Anastasia Bektimirova, Head of Science and Technology

“When objectives are ambitious, the only reward you’re likely to receive is deception,” write Kenneth O. Stanley and Joel Lehman in Why Greatness Cannot Be Planned: The Myth of the Objective. They go on to say:

“The future that the past created was not the vision of the past, but instead what the past unexpectedly enabled. The genius of the Wright brothers wasn’t to invent every necessary component for flight from scratch, but to recognise that we were only a stepping stone away from flight given past innovations. Great invention is defined by the realisation that the prerequisites are in place, laid before us by predecessors’ entirely unrelated ambitions, just waiting to be combined and enhanced.”

Almost no prerequisite to any major invention was invented with that invention in mind. This gives a basis to challenge, from first principles, whether our typical approach to public funding of science and technology is truly optimised to deliver the highest possible return on investment.

Take the AI Opportunities Action Plan launched by the Government this week. Under the proposed changes, the AI Research Resource (AIRR), our national AI compute infrastructure, “should evolve into a set of Mission-oriented clusters that bring together compute, data, and talent to pursue frontier AI research and other national priorities.” It will now operate under Missions-focused programme directors who will oversee compute allocation. They will “quickly and independently provide large amounts of compute to high-potential projects of national importance, operating in a way that is strategic and mission driven.”

A possible risk here is falling into the trap of the objective and drifting away from the AIRR’s original purpose. We need to ensure that scientists and students in universities have the compute they need for AI research and applying AI-driven methods across different fields, from computational biology to the social sciences. This is foundational for diffusing AI throughout science, including in the fields where it has fewer immediately obvious applications. Against the backdrop of GPU poverty in academia, this is not an unambitious goal. The AIRR shouldn’t be confused with ARIA. The former is foundational research infrastructure, while the latter has a mandate to fund high-risk high-reward research making bets on specific opportunity spaces. We should, as Stanley and Lehman write, “let novelty search roam in an endless maze that stretches to the horizon in every direction.”

Three Big Ideas #15

🍩 Eamonn Ives, Research Director

Christmas and the New Year period may have been a time of gastronomic excess for many, but – thanks to the continuing spread of novel appetite suppressant drugs – perhaps for fewer this time around than last. A recent paper studying how food habits changed in households with at least one GLP-1 (such as Ozempic or Wegovy) user found that grocery spending reduced “by approximately 6% within six months of adoption, with higher-income households reducing spending by nearly 9%.” Most of the fall in spending was explained by a radical reduction in calorie-dense, processed foods – including an “11% decline in savory snacks.”

Food brands who are threatened by demand drying up are not sitting idly by, however. As detailed in a New York Times long-read, companies are already developing ‘Ozempic-optimised’ product lines – playing up certain nutrients, like protein or fibre, or catering for other qualities that GLP-1 users find attractive, such as more convenient preparation and smaller portion sizes.

While innovation is usually only considered as a positive, it’s seldom a positive-sum game. As this example shows, one industry’s gain is very much another’s loss. But this process of creative destruction is rarely a single, isolated incident. More often than not, it triggers an innovation arms race as competing companies vie to respond to each other’s developments. Who will eventually win out in this instance is anyone’s guess – but what’s not up for debate is that this is the process of innovation, facilitated by flexible markets, being played out in real time.

🚪 Anastasia Bektimirova, Head of Science and Technology

Yesterday’s Lords Science and Technology Committee evidence session focused on the impact of immigration policy on science and universities. Naturally, the discussion touched on wider questions about the UK’s competitiveness as a destination for scientists and students. Speaking about AI research, Professor Alison Noble, Foreign Secretary at The Royal Society, said:

“The UK has a recognised strength in AI. We have some very good companies and a very strong ecosystem. I think that’s important for scientists as well. They might come in … and then a few years later, maybe go work in industry for a while, move around. This is what entrepreneurial-type scientists want to do, including people who are pure entrepreneurs as well. We are known for having a very active and very good environment for that. There is a concern about people going to work in industry, but if that’s where research is done in AI, then universities focus on other things. I’ve actually been around myself – my PhD was during the last wave of AI, so I’ve seen the whole circle of starting off, going through a winter and coming through again. So maybe I have a bit more balanced view on it. I think things go in cycles. But you don’t sit back when that happens – you decide as well, you work together, you have a strategy. I think that’s the important thing we need.”

An academia-industry revolving door drives innovation. The development of deep learning itself was a back-and-forth exchange. When renowned researchers like Geoffrey Hinton, formerly at Google, and Meta’s Yann LeCun left their university roles, what they gained from the vast resources of big tech companies continued to benefit academic researchers through their publications. Google’s Attention Is All You Need paper, laying out the theory behind transformer architecture, is one such example. We want to encourage cross-pollination of ideas, skills, and experience of working within various organisational structures.

For this reason, industry’s strengths shouldn’t breed complacency when it comes to ambition and capacity building in academia. Universities shouldn’t just sit back and “focus on other things” while industry advances AI research. Historically, AI innovation was academia-led, but now universities are being priced out. The work on large-scale AI models is increasingly out of reach for universities, largely due to high computing costs. Even though tech companies publish research papers, they are less transparent about the workings of their most advanced models, making resources for academia even more crucial. Resource constraints are not an exclusively UK issue – US universities don’t exactly match OpenAI’s compute capacity either. It’s not only about the science of AI itself but also application in other fields. It’s not uncommon to hear from PhD researchers and postdocs working on AI-driven biology who can’t access the compute they need. It’s particularly concerning to hear our talent compare their challenges to relatively easier compute access enjoyed by their peers stateside. What once seemed anecdotal stories now form a clear pattern.

The goal isn’t for academia to compete with industry but to work alongside it, each bringing their strengths to AI development and its applications. The timing or nature of cycles or disruptions are hard to forecast. What we can do is put strong foundations to ensure different parts of the AI ecosystem can thrive through them.

⚗️ Philip Salter, Founder

Eric Gilliam, writing for Asimov Press, argues that Edwin Cohn – a temperamental, entrepreneurial protein chemist at Harvard in the 1930s and 1940s – was one of the most underrated translational scientists of all time. Initially focused on pure research, Cohn’s lab was enlisted by the US military in 1940 to develop blood protein products to treat shock and blood loss. His team successfully created stable, concentrated human albumin, which was used extensively during the Second World War, including in the Normandy landings.

Cohn also demonstrated the pivotal role of pilot plants. Operated at a scale larger than lab experiments but smaller than full industrial production, these facilities replicate manufacturing processes so researchers can test methods under near-real-world conditions. By integrating a pilot plant into his Harvard lab, Cohn was able to scale production from laboratory experiments to 40-litre batches of plasma, develop manufacturing protocols for pharmaceutical companies, train industrial personnel (thereby ensuring smooth technology transfer), and rapidly produce enough material for clinical trials and battlefield use.

Gilliam thinks Cohn has something to teach us today about how pilot plants can accelerate both discovery and practical application. If more universities adopted the pilot plant model for challenges like producing synthetic blood or commercialising advanced materials – carbon nanotubes, graphene, aerogels, lithium-ion battery anodes – researchers could more quickly transition breakthroughs from the laboratory to the marketplace.

Three Big Ideas #14

🪞 Philip Salter, Founder

Those of a nervous disposition may want to look away now. Last week, a prominent article in Science warned of the potential creation of “mirrored” life – organisms composed of biomolecules with reversed chirality. These engineered microbes, theoretically invisible to our immune systems and natural predators, could spread unchecked, infect humans, devastate crops, and drive species to extinction.

Authored by a team that includes 16 members of national academies, two Nobel Laureates, and several pioneers who once aspired to create mirrored life, the article is supported by a 300-page technical report. For those lacking the time – or the requisite PhDs – turn instead to Asimov Press’s useful long read on the dangers. As it summarises: “A mirrored organism would use right-handed molecules everywhere a naturally-occurring organism uses left-handed ones, and vice versa. It could thus elude the typical chiral interactions by which microorganisms hunt their prey… Such mirrored invaders could theoretically spread across the Earth while evading the biological defenses that have evolved to check such threats.”

While the ability to create such life forms remains at least a decade away, the scientists urge proactive measures: prohibit their creation, regulate enabling technologies, and foster global, open dialogue. They point to existing precedents for responsible oversight, such as the Tianjin Biosecurity Guidelines, which guide the ethical and secure development of emerging biotechnologies.

While the science behind mirrored life is somewhat speculative – it’s far from idle speculation. Lessons from the nuclear era – during the Cuban Missile Crisis, the Stanislav Petrov Incident, and the Able Archer 83 exercise – remind us how close human ingenuity can come to catastrophe when risks are poorly managed.

Nevertheless, we should be prepared to reappraise this position. The other lesson of nuclear technology is that overly stringent regulations have massively held back civil applications of nuclear power. As Jason Crawford speculates, the risk-benefit calculation may shift over time. Future technologies could radically improve biocontainment, perhaps through isolated, robot-operated labs far from Earth, or advanced nanotechnology might allow for tighter ecological control. But that is speculative – given what we know now it’s that rare case where prohibition really is the best policy.

👾 Anastasia Bektimirova, Researcher

Applications have opened for the next cohort of the No10 Innovation Fellowship, which aims to bring innovators and original thinkers into the government. The programme’s intent is commendable, and it really is quite exciting to see what previous Fellows were tasked with.

The challenge lies in continuity. Is the government equipped for the long-term delivery of a disruptive new initiative or innovative ways of working put into motion by a Fellow brought in for 6-12 months? The key to genuine transformation is scale. Yet, many innovative projects are trapped in “pilotitus” – failing to reach their full potential.

To counter this, people with a similar outside-the-box mentality are needed inside the government for the long term to carry forward the original vision during implementation. Without this, an innovative idea conceived with great ambition risks being watered down to something rather conventional. In his new book On Leadership, Tony Blair writes that improving delivery capacity requires people “working with the system but not formed by it,” and calls to “treat policymaking not as a spasmodic response to the difficulty of the day but as an opportunity to go deep and make change which lasts: a change not a splash.”

Having innovative thinkers embedded in government as a norm also increases the chance of something exceptional emerging from within. When Pat McFadden outlined the idea of experts from tech companies doing “Tours of Duty”, it might have been interpreted as if no innovator had set foot in Whitehall before. This is not the case. For example, such individuals were critical to the creation of the Vaccine Taskforce, ARIA and AI Safety Institute – all remarkable examples of startups inside the government.

But despite the clear, lasting value that innovators bring, the system hasn’t always been good at keeping them. It is worthwhile for the government to reflect on why such thinkers and doers leave, and what changes are required to empower the “weirdos and misfits” who are instrumental to meaningful transformation.

⚽ Eamonn Ives, Research Director

No fewer than 88 companies have delisted or moved their primary listing from the London Stock Exchange in 2024 – putting it on track for its worst year since 2009. This languid performance has left many asking what can be done to avert the rot.

One answer offered up recently by Lord Michael Spencer is that we need to be comfortable paying the bosses of listed companies “like top-rate footballers” without worrying about triggering a backlash. I’m minded to agree – FTSE 100 bosses are paid about a third of their S&P 500 equivalents on average, and while a large part of that will be down to the US market being far more dynamic overall, it’s not unreasonable to think that remuneration is restrained this side of the Atlantic for fear of negative press. In addition, the less enticing we make it for bosses to manage UK-listed firms, the less likely it is we’ll get the sort of talent required to achieve economic success.

Managers matter, and we have a wealth of evidence to back it up. In study after study, economists have demonstrated the power of good management. To take a famous one from Nicholas Bloom, John Van Reenen and Erik Brynjolfsson, they found that management performance can explain differences in productivity between firms even more than R&D, employee skills and investment in IT can.

Meanwhile, having a respected individual at the helm can boost a company’s value by many, many multiples more than what they take home each year. When Apple’s visionary leader Steve Jobs quit, shares dipped by 3%, erasing billions in value; in contrast, when Steve Ballmer announced the end of his less-than-spectacular tenure as Microsoft CEO, shares in the tech giant jumped by 7.5%.

Of course, becoming intensely relaxed with people getting filthy rich – to re-coin a phrase – is only one part of the puzzle. Other policies, like ending Stamp Duty on shares, would likely be quicker routes to bolstering the attractiveness of the LSE. But for long-term success, maybe we really do need to look a little deeper – and begin to cheer our corporate bosses as we do our footballing idols.

Three Big Ideas #13

🧑‍⚕️ Philip Salter, Founder

My big idea this week comes from a visit to London’s Hunterian Museum, where we joined a free curator-led tour as part of an unconventional Christmas office party.

The museum, named after the 18th-century surgeon and anatomist John Hunter (1728–1793), features over 2,000 anatomical specimens from Hunter’s original collection. It also showcases surgical instruments, models, paintings, and archival material that trace the history of surgery – from ancient procedures to modern robot-assisted operations. It’s fascinating and gruesome in equal measure.

One thing’s for sure – you’ll leave the Huntarian grateful for the progress we’ve seen since Hunter’s time, with the modern miracles of anesthesia, antiseptic, antibiotics, and advanced imaging.

Hunter himself played a pivotal role in this journey of progress – he was a pioneer who transformed surgery from a craft into a science, emphasising the use of research, experimentation, and teaching. One notable experiment may have been on himself. He believed that syphilis and gonorrhea were caused by the same pathogen, so he reportedly deliberately inoculated himself with pus from a patient who had one of these conditions.

Hunter wasn’t the first nor last to experiment on himself. In a recent example, virologist Beata Halassy treated her own breast cancer with experimental oncolytic virotherapy (OVT). After undergoing a mastectomy and chemotherapy, she injected her tumor with viruses known to attack cancerous cells.

Other famous examples include Werner Forssmann, who pioneered cardiac catheterisation in 1929 by threading a catheter into his own heart, earning him the 1956 Nobel Prize in Physiology or Medicine. Similarly, Barry Marshall ingested Helicobacter pylori bacteria in 1984 to prove it caused stomach ulcers, a discovery that won him the 2005 Nobel Prize. And Daniel Bovet’s groundbreaking work on antihistamines and nervous system drugs earned him the Nobel Prize in 1957.

Such self-experimenting scientists may not be outliers. A paper found that half of the scientist respondents performed self-experiments, and roughly one-fifth had conducted serious self-experiments. And while concerns are raised around biologics injections, radiation exposure, and surgical implants, most scientists who responded thought self-experiments were valuable.

🧑‍💻 Anastasia Bektimirova, Researcher

To lead in capital-intensive areas of science and technology, countries need strategic discipline and focus. There is more than one way to approach this, and what might work for, say, semiconductors might not work for AI.

Eric Schmidt recently proposed his “playbook for a category of countries that have the capacity to do something meaningful with AI—that is, those with disproportionate capital or large enough domestic labour and consumer markets, plentiful talent and a high demand for AI…These countries should first find a niche somewhere along the AI value chain, from regulation to software to data centres. Britain, for example, is positioning itself as a leader in AI governance. Its AI Safety Institute gets ten times the funding of its American counterpart. Saudi Arabia launched a National Semiconductor Hub in June, focusing on simpler chips than those of market leaders. Ireland is making use of its clean-power abundance by building large data centres and shipping out processed data as a product.”

But the argument for countries to focus on isolated nodes misses a critical point about the economics of AI. Unlike industries where controlling key supply or value chain components can yield strategic advantage, the same logic doesn’t fully apply to AI. Its value is realised through application, adoption, and diffusion rather than concentration in one layer of the stack.

The AI Safety Institute is, in fact, a case in point. The previous government focused closely on AI safety, but not as an end in itself. Rishi Sunak told the AI Safety Summit last November that building a strong AI safety state capacity “will attract even more…new jobs and investment.” Unless AI is trusted, advancements, adoption and diffusion will be curtailed.

AI’s potential lies in how it integrates into and reshapes industries, R&D, and public service design and delivery. Countries should prioritise structural changes and downstream reform needed to create an environment that enables widespread AI adoption for these purposes and across industries, rather than focusing narrowly on dominating specific value and supply chain points.

🛳️ Eamonn Ives, Research Director

Regular readers will be painfully aware of how bad much of the Western world seems to have become at building things. Whether its homes, roads, rail lines or power stations, infrastructure is only being constructed with an increasingly heavy price tag, if it’s getting constructed at all. It is enormously refreshing, therefore, when a correction to this narrative presents itself – and in writer Michael Hopkins’ recent article for Works in Progress, I found one.

While we’ve stagnated elsewhere, in the world of cruise liners, it appears we’re merrily sailing along. “Since the SS Great Eastern in 1858,” Hopkins writes, “the gross tonnage of the largest passenger ships has grown an average of 1.59 percent per year.” He contrasts this to the growth rate of the height of tall buildings – which in America grew by an average of a mere 0.24% a year between the completion of the Empire State Building in 1931 and the One World Trade Center in 2020. Moreover, if you look at the data on passenger ship tonnage from the mid-1990s, the rise in size is borderline exponential.

Of course, building stuff on land faces different challenges to building stuff to float on the open ocean. But what the experience of ship manufacturing suggests is that we haven’t necessarily lost the fundamental ability to design and assemble big bits of infrastructure. Rather, there’s something else getting in our way – NIMBYs.

Three Big Ideas #12

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🧪 Eamonn Ives, Research Director

We owe a lot of our safety to the fruits of scientific research, but conducting that research isn’t always safe. Laboratories contain equipment which if used incorrectly or accidents occur can pose considerable risks. Relatedly, suppose some apparatus was even slightly faulty – whatever it was used to produce may end up not quite being what its operator intended.

In a recent commentary article, co-authors Jennifer Byrne and Adrian Barnett describe a more intangible, but no less real, hazard that scientists must contend with – an ‘unsafe’ research literature. They note that the universe of academic publications which informs researchers’ – and by extension all of our – understanding of the world is not always perfect. At best, bad research might see resources squandered as academics forlornly venture down rabbit holes. At worst, it has potentially serious consequences – for instance if it leads to drugs or medical practices that harm patients being approved.

Yet while a scientist can relatively easily flag broken lab equipment to their fellow colleagues, doing the same for ‘broken’ research is altogether more difficult. As Stuart Ritchie (who directed me to this commentary via his always excellent Science Fictions) has highlighted time and again, the process for retracting poor research is mind-meltingly bad. This keeps useless or actively dangerous findings alive for far longer than they ever should be.

Not all innovation can be traced back to the lab, but plenty can. If we’re to have a more innovative future, getting better at fixing each aspect of the research process is a must – and that includes how we weed out unsafe papers.

🚢 Philip Salter, Founder

At 1.28am, on 26 March this year, the container ship Dali struck one of the main piers of the Francis Scott Key Bridge across the Patapsco River in the Baltimore metropolitan area, causing it to collapse. Six people were killed in the catastrophe, and the wider economic impact of the closure of the waterway has been estimated at $15 million per day. Understandably, the public wanted the bridge rebuilt quickly.

As Aidan Mackenzie writes for The New Atlantic the government shifted gears, with planners announcing a relatively aggressive four-year timeline and an expedited regulatory process. Disaster responses offer a clear contrast to the way things are normally done, argues Mackenzie. He also cites the example of a bridge on I-95 in Northeast Philadelphia collapsing after a tanker truck caught fire in an underpass, halting traffic along the entire corridor. The highway was reopened to traffic just twelve days later, months ahead of most predictions. “Pennsylvania Governor Josh Shapiro used his disaster authority, suspending any law or regulation that would impede swift recovery. Construction crews, working around the clock, engineered and built a temporary road in less than a week.”

The gap between how states act in normal times and a crisis suggests that there is potential to considerably increase state efficiency. In the UK, we saw this most acutely in our response to COVID-19, where the Vaccine Taskforce expedited the development, production, and distribution of COVID-19 vaccines, upturning conventional wisdom of the time.

Not every infrastructure or public health challenge is a disaster of the sort cited above, but what these examples show is that we often already know what’s slowing us down. While calls to cut unnecessary regulations can feel like a tired trope, it’s a trope because it’s true, and it’s tired because it’s long overdue.

⏩ Patrick King, Senior Researcher, Reform think tank

When Whitehall succeeds, so too does the country – with benefits felt across public services but also by charities and the private sector. Take regulatory reform, for example, which through the announcement of a new ‘Regulatory Innovation Office’, the new Government has spotlighted as a key lever for innovation and economic growth. Or the structure of the tax system, which has well-rehearsed consequences for R&D, business confidence and investment, and the UK’s competitiveness on the global stage. These challenges are acutely felt by start-ups: often operating at the frontier of the emerging industries that will determine our economic future.

The talent Whitehall has access to is fundamental to its success. Often this involves bringing in people with expertise from outside of Government. But it’s also essential to recruit and develop the best officials – who can work seamlessly across policy and delivery, and effectively unlock barriers to growth and other policy goals.

With billions of pounds of economic output at stake, the pay of decision-makers is one of the last places we should be penny-pinching. Talent comes at a price, and government should be prepared to pay for it.



In a report we’ve published today, Joe Hill and I set out a new model for the Civil Service Fast Stream, which aims to get top graduates into government roles. Despite being badged as a way to recruit elite talent, it has lost this clear focus – both in terms of who it accepts, the training and development it offers, and in its pay and status compared to the leadership schemes of many companies in the private sector.



For entrepreneurialism and the economy to thrive, we need a Fast Stream – and Civil Service – that builds the knowledge and hard-edged skills required to develop effective policy. Of course, there’s no silver bullet; separate to this paper, Reform has outlined how Whitehall can improve the value for money of its spending, better implement AI in public services, and become more mission-led. But an overhaul of the Fast Stream – with more competitive pay and a revitalised development offer – will pay big, long-term dividends.

Three Big Ideas #11

⚛️ Jeremy Driver, Britain Remade

Britain used to be a nuclear superpower. The atom was first split in Britain. In 1956, Britain opened the world’s first full-scale commercial nuclear reactor. Less than ten years later, it had built 21 more. As late as 1965, Britain had more nuclear reactors than the rest of the world combined.

Yet Britain hasn’t completed a new nuclear power station in almost thirty years and most of our remaining fleet is set to be taken offline in the next few years. Only Sizewell B, which opened in 1995, is planned to stay online past 2028. With the delay of the new Hinkley Point C reactor, when Sizewell B closes for maintenance in 2029, Britain will have no nuclear power whatsoever on the grid for the first time in more than 70 years.

This would be bad for energy security, bad for household bills, and bad for climate change, pushing up the amount of unabated gas we burn to compensate. It also puts the Government’s target for a clean energy grid by 2030 at risk, with the recent report from the National Energy System Operator finding that this target requires there being between 3.6 GW and 4.1 GW of nuclear power on the grid.

But there is a solution. At Britain Remade we’re calling on the Government to safely extend the life of our existing fleet of Advanced Gas-cooled Reactors (AGRs). Our analysis shows that extending the use of just two of our AGRs, Heysham 2 and Torness power stations, and finishing just 1 unit of Hinkley Point C would provide 5.3 GW of clean nuclear power, preventing the release of 8.8 million tonnes of carbon into the atmosphere, equivalent to taking 1.8 million petrol cars off the road.

That’s why we’re pushing the government to follow in the footsteps of countries like France and the United States and make the obvious, sensible and safe decision to extend the lifespan of our existing nuclear reactors. If you agree with us, back our campaign.

👩‍💻 Anastasia Bektimirova, Researcher

I spent a fascinating couple of days last week at the events of the inaugural AI for Science Forum, co-hosted by Google DeepMind and The Royal Society. True to the spirit of open science, the organisers recorded and uploaded the Forum’s sessions here. The themes that kept on coming up were an evolving notion of what it means to be a scientist, multidisciplinarity, and the changing ways of organising science. But unambiguously, the keyword was: data – both as a bottleneck and an opportunity – for AI-driven scientific progress. As DeepMind’s VP of Science Pushmeet Kohli noted during his panel, “we have a path for discovery but a scarcity of input.”

This point holds for all fields but one – the social sciences. As Fabian Theis, Director of the Computational Biology Institute at TUM said, “we have all these different developed disciplines…they have datasets…but then they still see this [AI] as a bit of a mystic thing”. What is needed is “activation to embrace AI”. Later, the Government Chief Scientific Adviser Dame Angela McLean said, “it’s incredibly attractive to use these powerful tools to address natural science questions, but we should also be thinking how we can use these tools to completely revolutionise social sciences”. I couldn’t agree more, with the caveat that AI is not the only available hammer of this revolution.

Social sciences are not uniform. Certain fields and subfields are inherently more receptive to methodological innovation than others. Updating university social science curriculum to better align it with methodological frontiers can only go so far. The “digital revolution” in the social sciences, prompting increased use of computational research methods, has been around for a while, with uneven spread. This suggests that beyond methodological innovation, deeper shifts need to happen too. They may need to be more cultural in nature, which makes them harder to achieve or incentivise.

With the exception of certain technically advanced camps in traditionally quantitatively strong fields, such as economics and political science, AI as a research tool remains a largely untapped opportunity in the social sciences. DeepMind’s recent blog on AI for science is a telling sign. It is a brilliant read, thoroughly exploring AI opportunities and challenges across a wide spectrum of fields, but overlooks the social sciences, even though DeepMind itself has produced impressive work in this space. Many areas discussed in the piece, such as problem selection and interdisciplinarity, certainly apply to social science research, yet it doesn’t spell out the words social science once. Personally, having attended several events in recent months on the topic, I’m left with no doubt that the future of the AI-powered social science revolution is bright.

⚖️ Philip Salter, Founder

The prosaic world British regulatory reform has caught the attention of the US under the stunning headline (which deserves to be written out in full): Shock UK Regulatory Coup Gives Government Sweeping Control Over US Tech: London's digital markets, competition and consumers act gives regulators the power to stop any acquisition, anywhere, for basically any reason they want.

Ashley Rindsberg is dissecting the Digital Markets, Competition and Consumers (DMCC) Act which is coming into force and gives the Competition and Markets Authority (CMA) significant new powers. Despite the headline, this isn’t clickbait – Rindsberg has a point. More precisely, he has lots of points, but I want to focus on the one that really matters to entrepreneurs that I talk with.

As ​​Rindsberg writes, “the DMCC gives the CMA broad new powers to intervene with mergers that target what it calls ‘killer acquisitions.’ While the language makes it sound as if only massively disruptive technologies fall into the category, the letter of the law reveals the opposite to be true. Instead, under the killer acquisition provision, the UK now has the ability to intervene in ‘no-increment’ mergers – i.e. deals that don’t increase the market share of either party, which can be manifestly non-competitive with each other.”

Back in 2021, we joined forces with the International Centre for Law and Economics to write a sober assessment paper on the risks of the DMU. Central to the argument in Conflicting Missions is that startups depend on acquisitions. While some don’t want to admit it, being bought is the main way entrepreneurs and venture capital investors are paid for their hard work and investment. The harder it is to sell your company, the harder it is to make a return. The paper cites empirical evidence that venture capital activity grows when countries enact pro-takeover laws, and declines when anti-takeover laws are introduced.

As our paper and Rindsberg’s article make clear – there is a huge amount of uncertainty about how this will play out. Entrepreneurs and investors are already burdened with enough of that.

Three Big Ideas #10

⚡ Jack Wiseman, Inference Magazine

Since 2012, the computational power used to train the largest AI models has grown 100 million-fold. This has become enormously energy intensive: the most recent model from Meta used an estimated 27 megawatts of power capacity, which is approximately the same power required for 88,000 UK households. Were trends to continue, by 2030, training the largest model would use more than twice the UK’s entire energy generation capacity.

But as things stand, no developer would choose to build an AI datacentre in the UK: it can take up to 15 years to get a grid connection, and, once connected, the UK’s industrial electricity prices are four times higher than in the US and 45% higher than in France.

To rectify this, Britain needs to increase its energy supply. We investigated two options for doing so: one using a combination of wind, solar, grid-scale batteries, and natural gas backup; the other solely with nuclear power. Our modelling suggests that nuclear route has significant advantages for environmental impact and safety. Not only would the cost-minimising allocation of renewables plus batteries and backup require over 200 square kilometres of contiguous land area per gigawatt, and colocation with an LNG import terminal, it would also have 40% higher carbon emissions, and lead to 27 times more ‘expected deaths’ than using nuclear power, based on historical patterns.

However, at present, building nuclear power in the UK is hard. Compared to South Korea, our reactors are 4.5 times more expensive and take at least twice as long to construct. In our diagnosis, this is a choice. We recommend the creation of Special Compute Zones, with an alternative planning and regulatory approval process for nuclear power, AI datacentres, and the transmission and networking infrastructure. If these reforms allowed UK projects to close the cost gap with South Korean reactors by two thirds, nuclear power would become 37% cheaper than an equivalent blend of renewable power for datacentres. With these changes, the UK can become the world’s best place to build the infrastructure for the Fourth Industrial Revolution.

☁️ Philip Salter, Founder

As Stian Westlake and Jonathan Haskel argued in the groundbreaking work Capitalism without Capital, modern economies are increasingly driven by intangible assets – such as research and development (R&D), software, branding, and organisational processes – rather than traditional tangible assets like machinery and buildings. A recent paper by Timothy DeStefano et al. hammers home the importance of policymakers understanding this point.

Investigating the UK’s Annual Investment Allowance (AIA), which allows firms to deduct the cost of capital investment against profits, the authors find that the tax break boosted tangible IT investments by, on average, 41.3% for hardware and 27.8% for software, but also slowed the adoption of cloud services by 17 percentage points.

As a blog on the paper states: “This is a significant distortion, given that 56% of firms used the cloud by the end of our study period. Crucially, the capital incentive also slowed the diffusion of other data-intensive technologies, reducing AI and big data adoption by 3 and 18 percentage points, respectively. These effects were particularly pronounced for small and medium-sized enterprises, precisely the firms most likely to benefit from cloud computing’s flexibility and variable cost structure.”

The capital incentive policy also dampened demand for data-analytics workers. Their back-of-the-envelope estimates suggest that in the absence of the AIA’s distortive effects big data adoption in the UK could have been 14% higher, and AI adoption 30% higher. 

There are plenty of bad policies the Government could adopt in their efforts to try to get Britain’s businesses to adopt AI – and I’ve heard a lot of them from other business groups over recent months in meetings with Ministers – but here is a straightforward one. We’ve done this before. Alongside Startup Coalition we successfully made the case for including intangibles in R&D Tax credits. It’s time the AIA followed suit.

🪦 Eamonn Ives, Research Director

One of my favourite turns of phrase in public policy debates is ‘the invisible graveyard’. Though rather morbid, it tells an instructive tale. Originally coined by economist Alex Tabbarok, the invisible graveyard refers to all of the deaths that occur while a drug which could have prevented them is stuck waiting to be approved by regulators. The notion forces us to remember that a strategy of not taking risks is far from being risk-free in itself. 

Invisible graveyards don’t just exist in pharmaceuticals either. We can apply the concept across a swath of sectors that are tightly regulated. Red tape that stifles nuclear energy means we burn much more fossil fuel than we might otherwise, heating up the planet and polluting the atmosphere. Our inability to swiftly legislate to permit autonomous vehicles on our roads means, as I wrote in an earlier Three Big Ideas issue, that more crashes happen. Rules that make it harder than necessary to put lab-grown meat on supermarket shelves are bad news for consumers, and even worse for chickens.

Note that none of this is to say that rules are bad in and of themselves. Rather, it’s an argument for regulators to always be mindful that, where a problem exists, insisting on making a possible solution as safe as is conceivably possible isn’t always a recipe for safety.

Currently, applications are still open to Chair the newly established Regulatory Innovation Office – which could be a gamechanger for pioneering tech in Britain. Whoever gets the gig, let’s hope they’re aware of the invisible graveyard, and do what they can to keep it as empty as possible. 

Three Big Ideas #09

🚧 Eamonn Ives, Research Director

Donald – self-annointed ‘Tariff Man’ – Trump is returning to the White House. Central to his economic agenda for America is to introduce steep tariffs on imported goods. True to form, the exact details are sketchy, but Trump has suggested anything between 10-20%, and even higher rates for Mexico and China – 100%, 200%, or even 1,000% – which he blames for eroding America’s manufacturing base. 

One of the most common justifications for tariffs is known as the ‘infant industry argument’ – which states that taxes on imports can keep out foreign competition, shield domestic companies, and therefore enable them to mature and one day become competitive. Tariffs should be thought of as the stabilisers you have on while you’re first learning to ride a bike, so this theory suggests.    

With impeccable timing, however, a new working paper casts doubt on this idea. Authors Alexander Klein and Christopher M. Meissner studied the relationship between tariffs and labour productivity in US manufacturing between 1870 and 1909, and found that the former categorically reduced the latter. They also go further, and suggest that the reason this occurred was because tariffs generally enabled a greater number of smaller, less productive firms to stick around, which otherwise would have been competed out of existence – exactly the opposite of what fans of the infant industry argument tend to argue. Nobody celebrates small businesses going to the wall, but we’ve known for a while how important creative destruction is for economic growth. 

One of the other more harmful aspects of tariffs is that they invariably induce other nations to follow suit with retaliatory tariffs – in other words a ‘trade war’. Whether in fashion or food or beyond, we have a tendency to copy our transatlantic counterparts. For the sake of the economy, let’s hope we draw the line at trade policy. 

🧩 Anastasia Bektimirova, Researcher

I spent last Friday at the newly refurbished British Academy, where the space now blends tradition with modern ambition, as if reflecting a reimagining of social sciences and humanities themselves – the fields that the Academy has championed for a century. Fittingly, I was there for the reSHAPE conference. It showcased the achievements, opportunities, and challenges of turning research coming from social sciences, humanities and the arts (SHAPE) into impactful products and services, or deep social ventures, directly tackling societal problems. I shared some takeaways here.

There was a lot of talk about “changing the culture.” The rooms were buzzing with founders, academics, investors, and government officials eager to explore the frontiers of real-world SHAPE research impact. But, as one of the organisers told me, this relatively small group represented about 90% of the community – a sign that there is still some way to go until there is a bigger pipeline of strong (i.e. investable and scalable) commercialisation ideas coming from SHAPE research, and that the broader academic community needs to be taken on a journey. 

The puzzle is: how? Questions, such as: “how to get academic researchers more interested in real-world questions?” or “how to get social science and humanities university departments to use the word ‘commercialisation’ less hesitantly?” don’t immediately strike me as ones for government policy to tackle. But I consistently hear the hope that the Government’s five missions being big strategic themes rather than specific disciplinary areas offer a good opportunity for the SHAPE research community to demonstrate its impact potential. The new R&D Missions Programme is a helpful signal, but social inertia is often a stumbling block for otherwise promising interventions.

One way to make targeted funding work is to diversify the forms of research output that funders ask for when awarding grants. As it stands, this could do with more ambition and outside-the-box thinking. Yesterday, the Advanced Research and Invention Agency (ARIA) CEO Ilan Gur told the Lords Science and Technology Committee that an ARIA programme would be considered a success if it produces a new capability that “would have changed the conversation globally about what’s possible or valuable in a space.” We need a similar ambition in how we approach the research impact of social sciences and humanities.

🧑‍🔬 Philip Salter, Founder

When Caleb Watney tweets “This is the best paper written so far about the impact of AI on scientific discovery”, it’s time to stop scrolling and start reading. 

Artificial Intelligence, Scientific Discovery, and Product Innovation, by Aidan Toner-Rodgers finds that AI-assisted researchers discovered 44% more materials, leading to a 39% increase in patent filings and a 17% rise in product innovations. Critically, the use of AI seems to present an opportunity for more radical innovation, with the paper finding increased novelty in all stages of R&D.

As the paper states: “These effects are large. To put the rise in materials discovery in perspective, the lab’s research output per scientist declined by 4% over the preceding five years. This was despite the introduction of several computational tools designed to aid scientists. AI therefore appears to be a different class of technology, with impacts that are orders of magnitude greater than previous methods.”

While being mindful of these caveats, this could point the way to a new era of human progress. It also presents a challenge to individual scientists. Top-performing scientists benefited disproportionately, which would make many scientists redundant. And while it automates tedious tasks, the paper suggests AI may also reduce creativity and job satisfaction for scientists – or at least for the sort of people who currently become scientists.

Whatever the future holds for scientists, ultimately we shouldn’t forget one of Adam Smith’s great insights: “Consumption is the sole end and purpose of all production.” And on that front, things are looking bright.

Three Big Ideas #08

🏡 Eamonn Ives, Research Director

It’s only natural that commentary on last week’s Budget has focused on its headline measures like the rise in employer National Insurance. Sneaking somewhat under the radar, however, were the various changes made to Stamp Duty – the tax people pay when purchasing a house. Currently, first-time buyers pay no tax on properties valued up to £425,000, but from April next year this relief will fall by nearly a third to £300,000. Under the new arrangements, an average two-bedroom London flat for a first-time buyer – price, £440,000 – will incur Stamp Duty of £7,000, almost ten times what it would have been previously. 

Stamp Duty is an atrocious tax – destroying 75p of wealth for every £1 it raises – and reducing the generosity of the nil-rate only makes it worse. One of its most malign effects is the friction it creates in the housing market, by discouraging people from selling up even when it may be in their best interest to do so. This in turn renders labour markets less flexible, hitting economic output in the long run. The Chancellor made clear in the Budget that taxes needed to go up in order to balance the books but this short-term cash grab could well end up being pennywise yet pound foolish if – and when – it drags on growth, year after year. 

There’s still time to rethink this, and with Labour’s relatively younger, unpropertied base disproportionately losing out from it, it’s not unimaginable that they’ll change their minds. But that won’t happen without a fight – let’s hope it starts here.

♟️ Philip Salter, Founder

There are gaps in policy making that need bridging, as entrepreneurs aren’t always happy to talk directly to government about their business concerns. Take competition policy. Speak with any of the UK’s most ambitious tech startups you’ll hear concerns about the Competition and Markets Authority, but most entrepreneurs don’t raise their head above the parapet to say this. Not least as it may prejudice future M&A activity. That’s why I raised these concerns with Jonny Reynolds this morning at a roundtable with entrepreneurs and business groups.

First and foremost, entrepreneurs’ are worried that their path to exit could be blocked by the CMA. While politicians may dream of every startup becoming a unicorn, in reality very few tech companies are destined to be a Markit, Wise or Deliveroo. For many entrepreneurs, an exit to a bigger player in tech will be the end game. This isn’t just a UK thing – it’s the way all tech ecosystems work, and it’s critical for incentivising entrepreneurs to start, employees to join and investors to back these tech tech startups.

This isn’t new. Back in 2021 we wrote Better Together, which made the case for the procompetitive benefits of M&A in tech. It drew on cross-country studies which find that restrictions on takeovers can have strong negative effects on VC activity to argue that startup formation and venture capital investment is extremely sensitive to the availability of exits.

With the rise of AI and the need for compute, we’re also hearing a growing concern from founders of startups that want to enter into development partnerships with big tech companies. Strict regulatory requirements on partnership are making this close to impossible. Clearly, in the first instance the CMA needs to provide some guidance on the sorts of partnerships that would cause them concern so that entrepreneurs and investors know what the rules are.

👩‍🔬 Anastasia Bektimirova, Researcher

A journal from the National Academy of Sciences and Arizona State University surveyed 784 people in the US science and technology policy community to explore their career paths, motivations, activities, and opinions on how the field is changing. Commenting on the release, the publication’s editor-in-chief said:

“Today, those in the field are far less likely to think of themselves as working for science (e.g., advocating for more research funding) than to see themselves as taking a wider societal role, such as influencing policy and regulation and bringing science to society.”

To me, this trend rings alarm bells, because it presents the risk of losing sight of the very scientists who drive scientific progress. The main question guiding science policy – what is needed to generate more value from science? – is fundamentally about “working for science” and scientists.

And there are real opportunities to grasp here. Just take the plight of junior scientists. Globally, the academic system is failing early-career scholars. The UK is no exception. A country that becomes the best place in the world to start a scientific career will gain strategic advantage in science. There is no reason why this country can’t be the UK. As former government science and tech adviser James Phillips rightly notes, this is a “niche opportunity or resource that the UK can have that is globally overlooked.” It’s high time for science policy work, both outside and inside of government, to wake up to this. 

Industry bodies representing the interests of universities and scientific organisations that are members of such bodies abound, and quite a few think tanks ponder how to seed science and tech progress throughout government and public services. But advocating for the scientist and better organisation of scientific practice might not always look the same as putting the interests of a scientific organisation as a business first. The Metascience Unit inside the government is a good start, but we could benefit from directing more brainpower to the same questions outside it.

Three Big Ideas #07

🧮 Shivani H Menon, Deputy Head of Research, Onward

In Onward’s latest report, The British Entrepreneur, we found that high costs were clobbering two groups of business owners in particular – those contemplating growth, and those currently growing. One cost they are especially worried about is the abrupt hike in their tax bills from VAT when they start turning over £90,000 and above. 

Tax exemptions for small businesses are normally welcome. But the VAT threshold is disincentivising growth for businesses whose turnover is approaching the threshold. Nearly 26,000 businesses are hiring fewer employees or refusing additional work to avoid paying a higher VAT rate.

There is a natural tendency among politicians to deal with this problem by simply increasing the threshold further. Earlier this year the threshold was raised from £85,000 to £90,000. Reform UK in their election manifesto even pledged to increase it to £150,000. 

But there are two major issues with this approach. Britain already has the highest VAT threshold in the world, and any further increase will cost the Treasury nearly £50 million for every £1,000 increase in the threshold. Second, increasing the threshold would not do away with the cliff-edge, it would only shift the point at which SMEs begin artificially limiting their growth. 

Counterintuitively, the only approach to reform VAT in a way that eliminates the cliff-edge is to lower the threshold dramatically and introduce a tapered rate that sees businesses with the lowest turnover pay the least VAT. The threshold could be reduced to £30,000 at a 1% VAT rate, increasing gradually until it reaches a rate of 20% for businesses turning over £140,000 or more. 

Tapered VAT isn’t a perfect alternative, nor is it without its own administrative burdens. But coupled with the digital VAT filing system and provisions for more frequent filing for those businesses that see their turnover change frequently, it is the only way to encourage long-term growth among businesses currently choked by the threshold. 

🛫 Eamonn Ives, Research Director

Above, Shivani outlined a proposal to make part of our tax system smarter. In my Three Big Ideas this week, I want to look at one that would do the opposite. Specifically, the suggestion from a group called the Stay Grounded Network and the left-wing think tank the New Economics Foundation to introduce a ‘frequent flyer levy’. As the name of the tax implies, they think extra charges should be slapped on passengers who fly multiple times a year. They argue this is necessary to curb aviation’s contribution to climate change, because higher prices would mean fewer flights being taken and less fuel being burnt.

I’ll park my concerns about the ability to roll this out in practice for now (anyone who has used British Airways’ website lately will know further complexity to booking tickets is the last thing we need), as well as the equity issues (what about immigrants who may need to fly back and forth to see family?), and the impact on business productivity, and so forth. What I want to focus on here is the necessity of this ‘solution’ in the first place. 

Already, the aviation industry is covered by the UK Emissions Trading System, which is a cap and trade scheme that puts a price on each tonne of carbon produced by a company subject to it. Ultimately, if we want to tax airline emissions – as indeed I believe we should! – this is the way to do it. Not only does it more accurately price the pollution generated by individual carriers, it also creates an incentive for them to reduce the carbon they emit in the first place. If they invest in cleaner engines or lighter planes or use less polluting fuels, they can reduce their tax liability. A frequent flyer levy does not have that same pressure to decarbonise factored into every single ticket purchase, because the tax incidence is borne by the consumer alone. 

As the world heats up, it’s understandable to want to reach for every tool we have to tackle pollution at its source. Thankfully, we already have a perfectly sound one in place for aviation emissions – and it means a frequent flyer levy is an idea best left behind on the tarmac.

🚀 Anastasia Bektimirova, Researcher

In your social media feeds over the weekend, you might have spotted some British policy folks cruising in self-driving cars. No, Wayve didn’t roll out its car fleet on the streets of London overnight. Excited posts were coming from the Bay Area, as some of the finest minds from the “progress studies” community, and their supporters, descended on Berkeley for The Roots of Progress Institute’s inaugural conference.

The term “progress studies” was coined by Tyler Cowen and Patrick Collison in their 2019 Atlantic essay. In addition to its core discussion on the need to study and understand the causes of material and civilisational progress, it made an important point: the goal should be to direct action towards progress, not merely to understand its drivers. This is what makes progress studies less of a new academic field and more of a movement. And indeed, most of the content emerging from the progress studies group has a problem-solution angle to it, and proposes to shake things up with more boldness than a regular policy think tank.

But as some from the progress studies community begin to realise, while enthusiasm is something to celebrate, innovative ideas are destined to face the harsh realities of implementation, tied with political will and fiscal constraints of the government departments. Just as not all of the fruits of science will make it from the lab into the real world, some policy ideas are destined to never make it onto the statute book.

One doesn’t need the Californian sun to brainstorm the future from sofas. The UK is no stranger to hosting summits and conferences around science, technology and innovation, more pro-progress groups are beginning to form, and I regularly come across some hackathon taking place. We need to realise what our unique strengths are, double down on them, and not shy away from being loud. Our proximity to Europe, while also having the biggest concentration of top universities and talent of anywhere on the continent, is one such strength to leverage. And we should do so in more publicly open and innovative ways, similar to what, for example, my colleague Anton Howes proposed as a New Great Exhibition. If someone is keen to take an eleven-hour flight for a two-day conference stateside, they're probably just as happy to take a short trip across the English Channel too.

Three Big Ideas #06

❄️ Eamonn Ives, Research Director

It’s about this time of the year that British people enter into a ritual debate – “have you turned on your heating yet?” And though some may tut at those who crack early, nobody in their right mind would expect someone to go without artificial warmth full stop.

So I’ve always wondered why this logic doesn’t apply to air conditioning for keeping homes cool when it’s too hot. And it seems I’m not alone. In a recent blog, the always reliable environmental economist Hannah Ritchie explains in great detail the health impacts of a changing climate. She concludes by saying: “If you’re looking for a challenge to work on over the next decade, innovating on better air conditioning technologies that are cheaper and more efficient, would be very high-impact. Billions of people who would benefit hugely from air conditioning currently can’t afford it.” 

I am sure there’s an entrepreneur or two who’s working on this. But if we think they could benefit from an extra helping hand, maybe we can learn from the policies of the not too distant past about how to stimulate more innovation?

🌠 Anastasia Bektimirova, Researcher 

I spent last Thursday in the increasingly exciting White City Innovation District, attending the inaugural conference for Imperial’s Centre for Sectoral Economic Performance. The event focused on the many flavours industrial strategies come in, with learnings from the US, Singapore and Sweden, along with deep-dives into sectors where the UK could build a competitive edge, from aerospace and tidal power to biopharma and fine chemicals. 

One recurring point was if and how much room industrial strategy should allow for “white space” when it comes to science and technology. When discussing Industry Transformation Maps for 23 sectors developed as part of Singapore’s industrial policy, Arnoud De Meyer, Emeritus Professor and former President at Singapore Management University, mentioned that officials did wonder how to tackle the need for “white space”, and if they should invest in the 24th sector that is not there yet. The same question was put to a panel of present and former MPs. Chi Onwurah, Chair of the Commons Science, Innovation and Technology Committee, said that “the challenge for industrial strategy is the sectors of the future”, and that “there is the need for a vision for the evolution of sectors”. 

The same question occupies the finest minds at DSIT at the moment. Yesterday, Science Minister Sir Patrick Vallance told the Lords Science and Technology Committee that protecting and growing the basic curiosity-driven science is one of his five priorities. He stressed the importance of:

“...understanding what percentage of total spend on curiosity-driven research we want to have as a country that is a knowledge-based economy and being explicit about it. That’s where we need to get to for the Spending Review 2025, and try to be much clearer about it. Because it gives the research councils the ability to understand where they can do things a bit differently and take risks on very early research, which might have no obvious application.”

Those who might find the need for “white space” hard to justify shouldn’t forget that many sectoral niches underpinning today’s industrial strategies in different parts of the world were once a product of curiosity-driven research themselves, or, as Sir Vallance puts it, “that is the work that ultimately is the goose that lays the golden eggs that in years to come creates all the economic and societal benefits”. It’s a strategic investment. Today’s oversight might become tomorrow’s missed fortune.

🧠 Philip Salter, Founder

While patriotic Brits might want to focus on the common nationality of Geoffrey Hinton and Demis Hassabis, of wider import to humanity is that the latest Nobel prizes in physics and chemistry went to AI researchers. This surely won’t be the last time. Soon it might become the only option. At some point in the future, it may become redundant to give humans prizes altogether.

Dario Amodei, Co-Founder and CEO of AI giant Anthropic has written an essay on how AI could transform the world for the better. Better known for talking about the risks, in the delightfully titled Machines of Loving Grace, Amodei lays it all on the table. Once we get truly powerful AI – a “country of geniuses in a datacenter” – which may be as soon as 2026, in the following five to ten years our world will be turned upside down: “the defeat of most diseases, the growth in biological and cognitive freedom, the lifting of billions of people out of poverty to share in the new technologies, a renaissance of liberal democracy and human rights.” Ideas don’t come much bigger than this. The essay deserves to be read in full. 

As Matt Clancy discusses on X, many economists think technological diffusion takes much longer, but there is no getting away from the fact that there is a growing consensus that we’re on the precipice of something significant. While Amodei is at pains to avoid the language of science fiction, it’s impossible to avoid the convergence. How long before we’re catching crumbs from the table?

Three Big Ideas #05

⚡️ Anastasia Bektimirova, Researcher

Ask an investor about the differences between British and US founders, and you’ll likely hear a familiar narrative about the deficit of ambition. They’ll tell you that British startups are not going after big markets, seek an early exit, or are pitching cautious rather than boldly optimistic sales numbers. In a recent World of DaaS podcast interview, when asked what conventional wisdom or advice he thinks is generally bad, Matt Clifford (Entrepreneur First co-founder and ARIA Chair) replied:

“There's a very annoying thing that happens in Europe. A lot of entrepreneurs get advice like ‘that’s a good idea, but do something just a little bit less ambitious because then you're more likely to succeed.’ A lot of people have an intuition that there should be an inverse correlation between odds of success and ambition – if you're trying to do something really hard, you're less likely to succeed. But it is much easier to succeed by being more ambitious, because in the end, it comes down to: can you attract talent and can you attract capital? Guess what? They're attracted to ambition. I think that intuition is just wrong and it gets amplified into very bad advice.”

This has made me wonder why founders don’t know better by default: what mechanisms might be at work here, and where else they might be restraining ambition. While not every founder is university-educated, the academic environment does play a role in shaping the mindset and ambition levels for those who are. From undergraduate to doctoral dissertations, filling a “gap in the literature”, no matter how incremental, is prized; supervisors encourage students to aim at “feasible” research above all, instead of letting their ambition roam while their work is still insulated from the pressure of the market or specific grants. This might be pronounced in some disciplines more than in others, affecting the impact we see from research in different fields and its commercialisation potential. It’s not hard to spot the same logic in education even earlier than university. 

Reflecting on a year spent in the Bay Area, Alice Bentinck (Entrepreneur First co-founder) gives a mindset-rewiring steer which, I believe, applies to science as much as to entrepreneurship:

“The remedy isn’t an over-hyped slide that you don’t believe. The remedy is to ask yourself ‘what’s the most ambitious target we think we could achieve and then what would it take to get there?’. Pitch that.”

📦 Eamonn Ives, Research Director

In American politics, an ‘October Surprise’ refers to an unexpected event that occurs in the month prior to the presidential election, and that threatens to hurt the chances of one of the candidates. On 1 October, a strike called by the International Longshoremen’s Association looked like it could prove to be one for Kamala Harris – if it meant supply chains getting gummed up and inflation taking off again. 

One of the demands made by the striking workers was a ban on automation at US ports. You might imagine this would be a straightforward hammerblow to productivity, but a fascinating post by Brian Potter suggests the impact could well be more nuanced. It also got me wondering, how productive are British ports? 

Data from the World Bank’s Container Port Performance Index don’t make for pretty reading. Of the British ports it considers, only two – London and Southampton – feature in the top quartile, at 76th and 93rd out of 405 respectively. Every other port ranks deep into the triple digits – Felixstowe is 174th, Teesport 224th, Grangemouth 264th, Liverpool 293rd, Greenock 346th and, last of all, Bristol, coming in at a dismal 368th. These lowly figures mean a typical British port on the index would rank 230th – somewhat lower than the global average.

Economists have known for centuries how important international trade is for the economy, and the critical role exporting can play as a way of boosting productivity within individual firms. Previous research we’ve published has highlighted the pains entrepreneurs face when it comes to selling goods abroad. While it might not trigger an economic miracle, it wouldn’t hurt to nudge the performance of our ports up slightly. 

💡 Philip Salter, Founder

My Big Idea for this week comes courtesy of our Adviser Francis Toye, founder of Unilink Software. He shared a Paul Graham's article from September on Founder Mode to get my thoughts.

In the September article, Graham shares the insights of Brian Chesky, CEO of Airbnb:

“As Airbnb grew, well-meaning people advised him that he had to run the company in a certain way for it to scale. Their advice could be optimistically summarized as ‘hire good people and give them room to do their jobs.’ He followed this advice and the results were disastrous.”

Chesky turned to Steve Jobs for inspiration. One thing Graham pulls out is that Jobs used to run an annual retreat for what he considered to be the 100 most important people at Apple. Critically, these weren’t the 100 people highest on the org chart: “It could make a big company feel like a startup,” suggests Graham.

As Graham acknowledges, clearly things need to change as a company scales. And there is a risk that a lot of bad management could be excused as “founder mode”. As Toye wrote to me:

"Extreme Founder Mode has obvious disadvantages: lack of delegation, micromanagement, high staff turnover, reliance on one individual etc., but on the other hand many corporate managers, however well intentioned and experienced, do not have the background to take a founder-led company into a successful growing business."

We still don’t fully understand what defines a great founder or when – and if – a company should transition to being run like a large organisation. Given the rising power of founder-led companies, getting this right (or wrong) could have huge implications for the rate of global innovation and the quality of all our lives.

Three Big Ideas #04

🪨 Eamonn Ives, Research Director

The year is 1882 – Queen Victoria marks her 45th year as reigning monarch, William Gladstone is enjoying his second of four terms in Downing Street, and, at 57 Holborn Viaduct in London, the world’s first coal-fired power station is sputtering into life. One hundred forty-two years – and 4.6 billion tonnes of coal – later, no more electricity will ever be generated from the dirty fossil fuel in Britain again. At 3pm on Monday 30th September, the last remaining coal-fired power station, Ratcliffe-on-Soar, was desynced from the grid.

Different reasons explain the demise of coal in Britain. There was legislative pressure, which placed limits on how polluting power stations could be – limits which coal struggled to comply with. Meanwhile, the rise of renewables ensured there were alternative ways to generate the electricity consumers demanded. But perhaps the killer reason was price. From 2013, a carbon price has been applied to the power sector, which levies a tax per tonne of carbon dioxide generated. Coal-fired power stations became increasingly uneconomical – going from producing 40% of Britain’s electricity in 2012 to just 10% in 2016.

Source: Our World in Data

Economists have long advocated the use of price signals as a way to efficiently and effectively achieve policy objectives. Britain’s rapid transition away from coal seems to vindicate them pretty comprehensively. As we look towards cracking other stubborn issues – from congested roads to decarbonising agriculture – the current government should be minded to learn the lessons of the past, recognise the power of prices to incentivise desired outcomes.

📊 David Lawrence, Co-Director, UK Day One

Keir Starmer says his new government’s ‘number one’ priority is growth. We at UK Day One wanted to take him at his word, so we asked 44 pro-growth economists, think tankers and experts to share their views on what Labour’s priorities should be. 

Far at the top of the list was planning reform. However, respondents largely insisted that the growth impact will depend on building housing and infrastructure in or near existing areas of high productivity, particularly London and the Southeast.

Following this was investment in nuclear energy, to bring down energy costs. These are viewed by some as the main driver of Europe’s economic ills vis à vis the US, and bolstering electricity supply is particularly important given rising demand for electricity arising from heat pumps, electric vehicles and AI data centres. Nuclear is also favoured due to its supply of continuous baseload power, which is essential for industry. Interestingly, respondents were more divided about whether the UK should increase investment in non-nuclear renewable energy – and the UK’s ‘green tech potential’ was generally deemed ‘highly overrated’, despite the current government’s prioritisation of green jobs. 

In what will surprise some, another idea that was viewed as ‘overrated’ was access to capital for startups. Where capital is in short supply, as one respondent put it, is more because of “underlying issues making it difficult to create profitable opportunities here with which to generate returns.” Fixing these could prove to be more effective than tinkering with pensions reforms.  

With the Budget just three weeks away, Rachel Reeves’ first meaningful opportunity to shape Britain’s economy is fast approaching. Our survey findings – which you can read in full here – provide a plan for her to build on. 

💫 Philip Salter, Founder

“[W]e should be taking more chances on quite young people, giving them more authority,” Tyler Cowen declares on the excellent Institute for Progress’ Metascience 101 podcast, the latest episode of which looks at how to better fund scientific innovation. 

Tyler adds, “when you think of young people running things – well, who ran the Beatles? There was George Martin and Brian Epstein, but the Beatles ran the Beatles. Paul McCartney had to figure out the recording studio. We don’t call that science, but that was an extremely difficult scientific project that had never been done before. And this guy, who hadn’t gone to college, at age 23 starts figuring it out and becomes a master.”

It’s not just music. The next generation can bring a fresh approach to tackling the world’s most pressing problems, something we’ve consistently argued for at The Entrepreneurs Network. And, as with musicians, though not everyone will become great, a great entrepreneur can come from anywhere (to misquote Anton Ego in Ratatouille). That’s why we’re supportive of organisations like the Junior Achievement, VIVITA, Young Enterprise and the Prince’s Trust who aim to imbue young people with the skills to lead.

Three Big Ideas #03

🥡 Eamonn Ives, Research Director

If you’re a fan of spicy food, the New York Times served up a treat last week. In a fascinating article on ‘The Life-Affirming Properties of Sichuan Pepper’ (paywalled), one extract in particular piqued my curiosity. In 1968, the American government banned imports of Sichuan peppercorns, over fears they posed a biological threat to domestic citrus crops. Some of the numbing spice surreptitiously continued to make its way into the US, but it was generally low-quality and often only sold to Chinese-speaking customers under the counter to minimise detection from inspectors. In 2005, the import rules were relaxed, but the peppercorns still had to be heated to 140°F for ten minutes to kill any potentially harmful bacteria – which dulled its potency. Only years later, when this requirement too was dropped, could the unique ingredient properly showcase its magical qualities. 

New businesses sprang up, now able to freely sell unmeddled Sichuan peppercorns, while existing corporations – including the likes of McDonald’s and Panda Express – got in on the action too. Americans’ appetite for the distinctive properties of Sichuan peppercorns no doubt partly explains why Sichuan restaurants are increasingly muscling in on Cantonese restaurants’ monopoly on the broader ‘Chinese’ food scene in the US.

What this all very tangibly brings home is how regulations can shape our economic possibilities in quite unexpected ways. It can only make one wonder about what other pleasures existing rules may be preventing us from experiencing. In a recent interview with The Telegraph (paywall), Science Secretary Peter Kyle gestures towards one contender – lab-grown meat. Though British regulators have taken some progressive steps forward, startups in the sector remain highly regulated. As with the Sichuan peppercorn, who knows what culinary delights might be in store for us if we gave lab-grown meat more space to flourish?

🇺🇳 Anastasia Bektimirova, Researcher

Liverpool was not the only destination du jour last weekend. So too was New York, as foreign policy delegates descended on the United Nations (UN) headquarters for the Summit of the Future ahead of the General Assembly this week. The tech policy community had expected the long-anticipated announcement of the new UN AI Office, as recommended in the report from the High-level Advisory Body on AI. But that failed to materialise yet. The closest we get to it in the Global Digital Compact, which was supposed to lay down the plans, is “an international scientific panel on AI and a global AI policy dialogue.” 

The game play change might be a reason. In a shift from the Advisory Body’s interim report, which attempted to craft a UN-led superstructure for global AI governance, the new report calls for a “light touch mechanism,” and says that “the case for an agency with reporting, monitoring, verification, and enforcement powers is not yet made.” The purpose of the proposed AI Office would be to “ensure information sharing across the UN system,” and fill any gaps in the flurry of national, multilateral and global initiatives so that the excluded parts of the Global South could have a say in AI governance. Instead of falling into the trap of directing resources at governing every shiny new thing, the report is a reality check. This course-correction, however, is a far cry from the initial power play.

So, what does the adopted Global Digital Compact leave us with? The international scientific panel on AI is expected to produce an annual report surveying AI opportunities and risks. But the AI Safety Institute (AISI) -led International Scientific Report on the Safety of Advanced AI is doing just that. The global AI policy dialogue, another adopted recommendation, is already what the AI Safety Summit, and its sequels, are tasked with. Rather than pooling resources as intended, the UN’s efforts risk adding more layers to an already complex AI governance landscape.

As several reports argued this year (e.g. Onward, The Tony Blair Institute), the international network of AISIs, which have already built impressive capacity, should take the lead in setting standards, including for safety evaluations, and collaborative research efforts on advancing scientific understanding of AI opportunities and risks. And as the first and best-funded one in this network, the UK’s AISI should lead the way in this work.

🧱 Philip Salter, Founder

What do Britain’s recent political leaders have in common with the elites of the Austro-Hungarian Empire, Qing Dynasty China and the Polish Commonwealth? Answer – they all tinkered ineffectually while their metaphorical ‘Romes’ burned. That’s according to Foundations, a new essay from our Adviser Sam Bowman, and friends of the network Ben Southwood and Samuel Hughes, which is setting British policy discussions ablaze.

The thesis is easy to explain: our economy has stagnated because we have denied it the foundations on which to grow. Investment has been all but banned in housing, transport and energy, effectively prohibiting many of the most valuable investments that could be made in the UK. As such, instead of devising intricate schemes to try to stimulate and crowd in investment, we should focus on simply giving the private sector the platform and permission to build. It’s what we’ve done historically, and it’s what many other countries around the world are still doing.

While the diagnosis is simple, the solutions are less so. Whether it’s unpicking the Town and Country Planning Act (TCPA), removing the second staircase requirement, reforming nutrient neutrality rules, or disincentivising lengthy judicial reviews, there is plenty to build on. And yet, while some of this won’t be easy, as the paper concludes, “the hardest things to create are ours already. No government can legislate into being a respect for the rule of law, appetite for scientific discovery and entrepreneurship, or tolerance of eccentricity and debate.”