Employment Rights (& Wrongs)

The Federation of Small Businesses (FSB) has come out swinging this week, warning the Government that the Employment Rights Bill could “wreak havoc on our already fragile economy.”

As James Hurley writes: “One of the most radical changes is the planned removal of a two-year qualifying period for protections from unfair dismissal. Other changes that are concerning some small employers include granting new rights on sick pay from day one of employment.”

The Bill, due to return to Parliament for further debate, has sparked widespread concern. Entrepreneurs across our network have voiced serious reservations, which we’ve communicated to the Government. Finding the right balance is crucial to prevent widespread negative impacts.

The FSB’s numbers are stark: two-thirds of surveyed small companies indicate the plans would restrict their hiring capabilities, while one-third anticipate reducing their workforce before the measures take effect in 2026. The CIPD’s recent survey of over 2,000 employers reinforces these concerns: 32% are cutting headcount through redundancies or reduced recruitment, while 24% are either cancelling or scaling back business expansion plans.

The government’s own analysis projects annual costs to businesses in the billions. This economic burden won’t remain contained to businesses alone - an imbalanced approach risks creating exactly what the legislation aims to prevent: fewer and less secure jobs. Beyond job cuts and reduced hiring, the legislation may inadvertently encourage employers to shift toward temporary, casual, and self-employed workers.

The government doesn’t need to back down on every measure. A case can be made for fairer compensation for last-minute shift cancellations, appropriate bereavement leave for workers, and reforms to the practice of fire and rehire.

However, history demonstrates that sustainable workers’ rights improvements are intrinsically linked to economic growth. Economic expansion periods have consistently driven dramatic improvements in wages and job quality, enabling major advances in workers’ rights – from minimum wage laws to union rights and reduced working hours.

The Government doesn’t need me to tell them we’re not expanding now. That’s why in the final three months of last year, 32% of small employers expected to reduce staff, up from 17% in the previous quarter, while the proportion of companies looking to hire fell from 14% to 10% over the two quarters.

Now’s the time to double-down – nay, triple-down – on its pivot to growth.

Sovereign Albion
In a thought-provoking Substack article, friend of the Network Andrew Bennett advocates merging scientific and technological advancement with a renewed connection to British land, lore, and folk traditions. He backs our proposal to create a new chivalric order for innovation, but it’s mostly worth reading for a fresh perspective on thinking about progress. It also serves as an antidote for thinking too much about employment regulation!

Ecosystem Builders
Our good friends at the Global Entrepreneurship Network invite you to apply to join the UK delegation at the Global Entrepreneurship Congress (GEC) in Indianapolis.

The GEC brings together over 5,000 global leaders – entrepreneurs, investors, policymakers, academics, and support organisations – for four days of intensive networking, workshops, and keynote presentations. Find out more on their website and this deck.

The UK delegation, led by Marc Ortmans and Matt Smith, currently comprises 35 members with plans to expand to over 60. Contact Matt Smith to learn more and receive a GEC registration fee waiver code.

Pitch in Parliament
Startup Coalition (also friends of the Network) will be hosting a Pitch in Parliament on 17 March. They’re looking for startups that have raised over £500,000 and are solving a problem in Public Services with AI. Find out more.

Three Big Ideas #21

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

In this week, Eamonn Ives questions Reform’s latest policy idea, Anastasia Bektimirova discusses how the UK can become a global leader in AI-powered scientific discovery, and Jessie May Green ponders the right approach to thinking innovatively when it comes to decarbonising the economy.

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?

Sense on Security

As is increasingly the case, our cousins across the pond managed to grab the headlines this week. Specifically Vice President JD Vance, who told world leaders at this week’s AI summit in Paris that the “AI future is not going to be won by hand-wringing about safety.”

To some people’s surprise, the US refused to sign the international AI declaration. To most people’s surprise, so too did the UK – choosing instead to side with the US over 60 other countries. The UK Government stated: “We felt the declaration didn’t provide enough practical clarity on global governance, nor sufficiently address harder questions around national security and the challenge AI poses to it.”

While some will attempt frame this as a sign that the UK and US don’t care about safety and regulation, it would be more accurate to see this as a move to clarify priorities. That’s why the UK’s AI Safety Institute has just rebranded as the AI Security Institute. As Ian Hogarth, Chair of the AISI, wrote on X: “It’s time to properly reflect that we see the most serious risks as being those to security.”

Our Substack readers might have seen this coming. In our most recent interview, Herbie Bradley, former member of the technical staff at the AISI, said on the AISI’s future: “It would be quite wise to focus more on AI security – specifically, securing training and deployment data centres against cyberattacks and working closely with the US through mechanisms like Five Eyes. AI security will become much more critical in the years to come, as I expect many capable cyber actors to want to attack highly capable AI systems.”

Maybe this puts us at odds with the EU, but until they upgrade their compass the choice is simple. While it might sound a little overblown, this is really all about the ‘free world’ prevailing. Of course, for this to make sense we must hope that Sam Freedman is wrong in predicting that the US might no longer be part of the free world (paywall) – though we’re less pessimistic.

The prize of getting this right is huge, and is underlined by today’s announcement that the government has signed a memorandum of understanding with Anthropic on AI opportunities. This points towards a future where AI will revolutionise the way that governments serve their citizens. Watch this space for more.

Makers Not Takers
Welcoming the launch of the AI Opportunities Action Plan last month, we noted that the true test will be in its execution. Part of the responsibility is on the AI sector itself.

To help drive engagement from the AI community, we’ve joined Phoenix Court, Faculty, Founders at the University of Cambridge, and other ecosystem players as a partner on the AI Forum.

The first meeting of the AI Forum brought together 68 leaders from across the ecosystem – researchers, startup founders, policy experts, civil society, and government officials. Attendees broke into six groups to focus on the key pillars of the plan: Infrastructure, Data, Talent & Skills, Governance, Go-To-Market, and how to ensure the UK is a nation of AI “makers.”

The next meetings of the AI Forum will take place on 30 April, 1 July, and 19 November. Whether you’re working on infrastructure, talent development, building AI models, or thinking about governance, now’s your chance to get involved.

The Action Plan sets an ambitious vision for UK leadership. You can help shape the next phase of the UK’s AI journey through a community survey.

What’s Up?
We’ve just launched our WhatsApp community. With a network of well over 10,000 entrepreneurs and even more people supporting them, this is a bit of a leap into the unknown.

You’ll see that there are a few groups already active there which are ongoing projects. Please feel free to request to join them, although there will be a more formal process for accepting people for privacy reasons. Do also feel free to suggest new groups. It’s going to be a process of trial and error (hopefully not too many of the latter).

As well as sharing updates, we’re going to use the groups to source ideas for those at the coalface. Managing a community requires a lot of work, so we’re weighing up the value of partnering with organisations, companies and individuals who can help us run specific groups.

In summary: join our community today and drop me an email if you want to help us run a group.

Please note that if you join the community, only The Entrepreneurs Network will be able to view your phone number, but if you are accepted to a specific group, your number will be visible to the other members of that group.

Three Big Ideas #20

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

In this week, Eamonn Ives discusses how to ensure policy change doesn’t simply create business uncertainty, Anastasia Bektimirova explains why staying ahead in sensor tech advances is critical, and Philip Salter makes the case for unbundling universities.

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.

Lost Youth

Last Sunday, Home Secretary Yvette Cooper ruled out plans to negotiate a Youth Mobility Scheme with the European Union. Let’s hope others in the Government convince her otherwise.

It won’t come as a surprise to regular readers that we support youth mobility. As we argued in Job Creators: 2024, since leaving the EU, we’ve made it unnecessarily hard for a relatively well-educated and skilled population with a broadly common set of values, culture and interests to contribute to our economy and forge ties with the UK.

Britain already has Youth Mobility Schemes – which allow those aged between 18-30 years old (or 18-35, depending on the country) to easily come and work in the UK – with many countries, including Australia, New Zealand, Canada, San Marino, Monaco, Hong Kong, Japan, South Korea, Uruguay and Taiwan.

When weighing up the economics, it’s something of a no-brainer. Youth Mobility Schemes help address labour shortages, ease inflationary pressures and support economic growth. They drive innovation, internationalisation and exporting for firms that employing these young people. By the Home Office’s own calculations, the average contribution of Youth Mobility visa holders to the exchequer in direct and indirect taxes annually is £10,000 today (adjusted for inflation).

Beyond economic benefits, the scheme promotes cultural exchange, strengthens international ties, enhances the UK’s soft power and fosters long-term collaboration that can lead to more economic benefits through future foreign direct investment.

But what about the politics of all this?

Well, nearly seven in ten Brits – including 55% of Leave voters – would support a scheme that would allow 200,000 18- to 40-year-olds from the UK and EU to travel, study and work freely in each other’s countries for up to four years.

And while the Conservatives – with Reform on their backs – will be unlikely to endorse the move, former Chancellor George Osborne makes the point on Political Currency that in negotiating a business-friendly arrangement with the EU, the Labour Party would set a trap for his Party. After all, the changes will be cemented in by the election, meaning Conservative opposition to them would put the Party at odds with Britain’s powerful business lobby.

Of course, the net migration figures terrify the Government. However, just 23,000 people came to the UK on Youth Mobility Visas in 2023, with as many young Brits going the other way (particularly to Australia). Also, most of these schemes are capped – Uruguay at 500 people, Canada at 8,000, and Australia at 45,000. We could negotiate for a capped EU Youth Mobility Visa scheme to offset the political risk associated with unexpectedly large numbers.

Nuclear Options
Keir Starmer has vowed to “rip up the rulebook” to accelerate new nuclear power, including small modular reactors (SMRs), which promise faster and cheaper deployment than traditional gigawatt-scale plants.

Reforms include increasing the number of sites on which power stations can be located, widely seen as one of the most important things for the industry, setting up a Nuclear Regulatory Taskforce (see here for more on this), and better aligning the UK with international partners so reactor designs approved abroad could be green-lit more quickly.

This was music to our ears, and surely to those of Britain’s energy-intensive businesses too. In Small Wonders, our Research Director Eamonn Ives’ number one recommendation was around increasing the number of sites, and he also recommended international mutual recognition.

Far be it for us to look a gift policy in the mouth, but we would add that this should just be the start. We also proposed allowing local authorities which approve the construction of new nuclear power stations to capture more of the business rates they pay, and increasing the resourcing of the nuclear regulators to deal with more applications.

Regardless, a nuclear renaissance in Britain has never looked so likely.

Getting to Know You
If you scroll down you’ll see we’ve got lots of events in the pipeline. Some of these are close to full already, so if you want earlier invites, you’ll need to spend a couple of minutes telling us a bit about you and the sorts of events you want to be invited to.

As part of our growing activities, we’re also looking for new places around the country to host us. If you or your company would like to partner with us, drop us an email.

Breaking Barriers
The Disability Policy Centre are conducting a new project around disabled CEOs and business leaders, for which they’re interviewing entrepreneurs across a range of businesses.

Do you know someone who has a great story to tell about the barriers they faced in getting to the top and how they’re working to remove them? If so, feel free to drop Chloe and Louie a line.

Three Big Ideas #19

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

In this week, Eamonn Ives takes stock of President Trump’s latest barrage of tariffs, Anastasia Bektimirova discusses bridging the science-policy gap, and Jessie May Green examines what DeepSeek’s ultra-efficient AI model could mean for future energy demand.

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.

Arc of History

As Our World in Data informs us, extreme poverty around the world is plummeting. There are more than a billion fewer people living below the International Poverty Line of $2.15 per day today than in 1990. On average, the number declined by 47 million every year, or 130,000 people each day.

This isn’t to excuse the poverty that still blights our world – exactly the opposite. It’s proof that progress is possible, and a motivation to work all the harder to help the remaining 650 million people – roughly one in twelve – who still live under that line.

So how does this happen? To radically simplify, the world gets richer through productivity increases – in other words, doing more with less, with entrepreneurs the driving force behind this. This doesn’t just happen in isolation – an entrepreneurial society is a social phenomenon. As Alfred Marshall set out in 1890 in Principles of Economics, agglomeration economies benefit from being close to one another due to knowledge spillovers, shared suppliers, and a concentrated labour market.

In other words, an entrepreneurial society thrives when businesses, talent, and infrastructure reinforce one another. This is why the Oxford-Cambridge Arc has long been seen as a potential growth engine – and why we’ve been long-standing supporters of it. As some readers may remember, the original plan under Boris Johnson was to build a new ​​rail link, new homes and a new expressway – but bit by bit, the project fell apart.

In a turn towards growth, Rachel Reeves has revived the Arc. And it’s worth quoting her at length – both for the all-too-rare pleasure of reading political statements that we can wholeheartedly endorse, but also to set it down as a marker to judge words against action.

The Chancellor said: “To grow, these world-class companies need world-class talent who should be able to get to work quickly and find somewhere to live in the local area. But to get from Oxford to Cambridge by train takes two and a half hours.”... “There is no way to commute directly from places like Bedford and Milton Keynes to Cambridge by rail. And there is a lack of affordable housing across the region.”... “Oxford and Cambridge are two of the least affordable cities in the UK. In other words, the demand is there but there are far too many supply side constraints on economic growth in the region.”

As Stian Westlake, Executive Chair of the Economic and Social Research Council (ESRC) and one of our Advisers, said back in 2022: “If you’ve got lots of smart people doing great research, if you make it easy to build housing and offices near those people, the magic of the free market will do its thing. People will set up businesses and economic growth will happen.”

“The tragedy in the UK,” he goes on to say, “is that we channel lots and lots of public money into two very beautiful towns – Oxford and Cambridge – where it is almost impossible to build anything. The arc is an attempt to solve this by allowing people to build things in between – Milton Keynes, Bedford – link it up with roads and rail, so it gets easier for entrepreneurs to set up the things they want to.”

As we wrote in Building Blocks: “Too few people subscribe to an agglomeration-led approach to growth. The political focus of late has shifted away from championing dynamic hotspots like the Golden Triangle, most obviously, but also even regions like Manchester, Leeds, Birmingham, Edinburgh and Bristol.”

I’ll end with the words of Reeves: “It has the potential to be Europe’s Silicon Valley. The home of British innovation.” (Though in the long run, actions speak louder than words.)

The Codemakers
Hot off the press, we’ve just released an interview with Herbie Bradley, AI governance and policy expert and former member of the technical staff at the AI Safety Institute (AISI).

The interview with Anastasia Bektimirova, our Head of Science and Technology, covers a lot of ground, which defies summarising. Instead, I will point to one lesson Bradley says he learned from his experience at AISI that could be applied to getting other existing and future projects off the ground and scaling them effectively within DSIT, or government more broadly (excuse the long quote, but I think the insight deserves it):

“When you’re trying to build state capacity or launch a new initiative that needs to be impactful and move fast, you basically need to start a new team. If it’s an existing team, it’s probably too enmeshed in bureaucracy.

Secondly, you need significant political backing. In our case, we were fortunate to have great support from Henry de Zoete, who was then the Prime Minister’s Adviser on AI, and others in No. 10 and DSIT, particularly the minister at the time, Michelle Donelan. This means you can get around normal bureaucracy when needed, like hiring someone in a way that hasn’t been done before within the department.

You also need an incentive to perform well. This could be internal motivation from team members believing in the ideal or mission, a tight deadline like a Summit organised on very short notice, or competitive pressure from overlapping mandates with existing teams.

And finally, try to hire from outside government – people who are used to moving fast from industry and the startup world. That’s also effective.

There is an inevitable effect where a new, fast-moving, high-entropy team gradually gets pressed down by bureaucratic systems like HR, contracting, and finance. The general systemic incentive is to reduce fast-moving teams to a low-entropy state and make them more similar to the rest of government.

To counteract this, you need political backing and might need to start a new team or initiative if the first one becomes too slow. This explains why politicians often like to start new teams. There is an analogy here to the fractal startup model in industry. OpenAI scaled their ChatGPT team by creating conditions mimicking a pre-seed stage startup – totally new Google Drive, getting the new product team together in person five days a week, creating a separate office space – and that works surprisingly well.”

I strongly recommend reading the interview in full.

The Codemakers

In our latest interview, Anastasia Bektimirova spoke to Herbie Bradley, AI governance and policy expert and former member of the technical staff at the Artificial Intelligence Safety Institute. Among other things, they discussed building Britain’s AI advantage and what the AI Safety Institute can teach us about state capacity.

Three Big Ideas #18

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

In this week, Eamonn Ives looks at the results of a new paper on the benefits of the sharing economy, Anastasia Bektimirova gives her take on the new Science and Technology Venture Capital Fellowship, and Philip Salter argues that fully unleashing academics’ innovative potential will take more than just building.

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.

Constructive Comments

Britain needs to build. Actually, it’s been ‘time to build’ for a while now, which is why we’re encouraged by recent Government announcements and news reports suggesting those in power are taking it seriously. Better late than never.

First, plans were set out to reform the process developers have to go through to address any environmental impacts projects might cause. Under current rules, these have to be done in advance in order to receive planning permission. Under the proposed changes, developers will be able to pay into a Nature Restoration Fund, pooling contributions and putting them towards larger, more effective environmental projects.

Second, no-hope legal challenges that cost the taxpayer a fortune and delay critical infrastructure projects could be consigned to history. As Labour MP Dan Tomlinson writes on X: “The independent National Infrastructure Commission finds that an astonishing 58% of projects are being JR’ed [judicially reviewed] up from 10%.”

The Government is streamlining the planning process for major infrastructure projects – such as nuclear plants, wind farms, and transport networks – by limiting speculative legal challenges to one stage instead of three. This reform aims to cut delays, lower costs, and drive economic growth by removing unnecessary obstacles that hinder progress.

Third, Chancellor Rachel Reeves is expected to announce the approval of a new runway at Heathrow next week, while the Treasury is also considering whether to back a second runway at Gatwick and increased capacity at Luton Airport. Our friends at UK Day One have a timely paper out on why Heathrow is the most capacity-constrained transport hub in the world. In Britain’s Runway to Growth, they argue that expanding it could boost nationwide economic growth while still meeting the commitments on climate, air pollution, noise, and regional growth.

As with the AI Opportunities Action Plan, however, the Government must move at pace. They can and must go further too. In Small Wonders, for example, our Research Director Eamonn Ives explained how small modular reactors could provide cheaper, more reliable energy, while helping us cut carbon emissions too.

Our paper contains numerous policy recommendations that should be implemented to get the industry off the ground. These include allowing local authorities which approve the construction of new nuclear power stations to be entitled to capture more of the business rates they pay – creating a powerful incentive for them to green light development. It also suggests we should be able to mutually recognise the decisions of nuclear regulators in other allied countries when it comes to approving new nuclear designs, as already happens in pharmaceuticals, medical devices, aerospace, financial services and many other critical areas. Importantly, this would free up our own regulators to concentrate on issues that apply specifically to Britain, rather than simply duplicating work that has already been done elsewhere.

Labour’s Choice
If those growth policies aren’t enough, this week our Advisers Sam Bowman and Sam Dumitriu set out 11 more for Labour to choose from. The final recommendation is based on a paper by our Head of Innovation Research, Anton Howes. It deals with the thorny (but critical) issue of using copyright for AI development. Bowman as Dumitriu write:

“The best short-term solution to this is the one proposed in Matt Clifford’s AI Opportunities Action Plan: allow training without a license unless the rightsholder explicitly requires one. This is the EU’s approach, and while we think we should aspire to be better than the EU on tech regulation, it’s a lot better than the status quo. Instead of announcing yet another consultation, as the government has done, it should adopt Clifford’s proposals immediately and, in the medium-term, aim to set up an API standard for contract terms that reduces transaction costs between AI companies and rightsholders, so dealings between them can be fast and inexpensive.”

Paper Over
As I wrote in my latest Big Idea over on our Substack, 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.

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, now of Labour Together, 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.

Read more and subscribe to our Substack here.

Need-to-know Basis
Our Adviser Harriet Green has just launched Basis, which is kicking off with private investment in early-stage companies that are building where the state is failing. If you are working in this space and the Basis thesis resonates with you, Harriet and team would love to hear from you. Message her here.

Three Big Ideas #17

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

In this week, Philip Salter urges the public sector to think big on embracing digital technology, Anastasia Bektimirova wonders about how we label innovators, and Eamonn Ives puts forward ideas for spurring agglomeration in London.

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.

Does Compute

Matt Clifford’s long-awaited report finally landed this week. The AI Opportunities Action Plan packs a punch, delivering 50 recommendations to the Government.

For a deep dive, our Head of Science and Technology Anastasia Bektimirova offers a thorough analysis of the Plan on our Substack. As she said to Sifted (paywall): “The plan has a lot of very constructive recommendations... but this is something that was supposed to arrive much sooner, and at the moment it feels like we’re playing catch-up.”

The proof of any plan is in the execution. But as Anastasia said for another Sifted article (paywall): “It’s a very good sign that Matt Clifford will be overseeing the delivery of this plan.” It’s clear that the necessary infrastructure development, sustained funding commitments, talent attraction, and changes to procurement will all require tough political decisions to be made. As she writes in our Substack analysis, “the responsibility is also on the AI sector itself to demonstrate how it can deliver on the Government’s aims. The success of the Action Plan depends on sustained political support. Ministers want something to feel positive about and to champion, so articulating the opportunity is important – and this will be our task.”

As our Adviser Richard Mabey, founder of the AI-powered contract automation platform Juro, responds: “The key now is not the recommendations in the report, it’s in the delivery. To stand a chance of getting ahead, the Government must implement the recommendations at breakneck speed. Can Government move at the pace of AI? Let’s see.”

Janan Ganesh isn’t convinced we can. Ever the provocateur, he writes in the Financial Times (paywall) that Britain should stop pretending it wants more economic growth: “Tories want growth, but not if it means building things, aligning with Europe, or much exposure to China. Labour wants growth, but not if it incommodes the unions, or ‘leaves people behind’ or some such NGO press release inanity. What growth policy is left over, then?”

I’m more optimistic (and I suspect Ganesh might be too). Just this week, politicians across the political spectrum endorsed a National Priority Infrastructure Bill from the Looking For Growth group. These included Chris Curtis, co-chair of the Labour Growth Group, which has around 100 Labour MPs as members. Looking For Growth is run by friend of the Network Dr Lawrence Newport (and author of an essay for us on Inspiring Innovation) – it’s a social movement dedicated to making Britain grow. He is one of many people working on policy to increase the size and dynamism of our economy.

A decade ago, being unashamedly pro-growth and pro-progress could be a lonely place to be. This is no longer the case. Time to get involved.

Join us for an evening of networking with like-minded, pro-growth entrepreneurs in Soho this Wednesday. Spaces are limited, so sign up now.

On Your Mind
We want to hear from founders! What barriers are holding your startups back? Here’s a message from Eamonn Ives, our Research Director setting out what he’s looking for:

“At The Entrepreneurs Network, we’re here to solve problems. But in order to do that, we first need to know what those problems are. And there’s nobody better placed to tell us than the founders who have to deal with them each and every day. Our pipeline of research for the year ahead is taking shape but we’re still eager to know what issues you think we should be focusing on to ensure Britain’s startups have the best shot at success. Maybe it’s a regulation that stymies your sector, or something that cuts across the breadth of the economy – whatever it is, drop me an email and let’s chat further.”

Three Big Ideas #16

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

In this week, Eamonn Ives asks whether Elon Musk is a genius, Philip Salter writes about the disruption AI could spell for the labour force, and Anastasia Bektimirova discusses the myth of objectives.

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.”

Calling It

Peter Drucker once said that the only thing we know about the future is that it will be different. Far be it from me to correct the founder of modern management theory, but at least in the short term, we aren’t entirely clueless.

Although precise predictions are impossible, our experience can guide us toward likely outcomes, something that both entrepreneurs and policymakers need. While we don’t know what a second-term President Trump will look like, we have more knowledge than we did when he was elected for his first term. We know, for example, to take his words seriously despite claims back in 2016 that we should take them symbolically. That’s not to say he will – or can – do everything he wants. And we also know that he’s quick to change his mind. This underscores how uncertain the global policy landscape will be under Trump’s leadership – and why entrepreneurs and policymakers alike must stay agile.

As our Research Director Eamonn Ives argued last year following the election, the lesson for many European countries, including the UK, is that we’ve grown too accustomed to relying on external actors. Whether that’s the US for technological innovation and security, or Russia and China for cheap energy and goods – without adequately considering the vulnerabilities this creates. Rather than retreating into economic insularity, Eamonn makes the case for smarter policies that prioritise resilience and recognise the true foundations of growth. Whether that’s in policy areas where we can work more closely with our allies, or in areas where we need to build our own capabilities – like producing our own cheap, clean energy.

On this side of the pond, we now know a lot more about our new Labour Government. It’s fair to say that not everything has gone the way that Britain’s entrepreneurs would have wanted, but we – and Labour – should remember that there’s still four and a half years left before the next election needs to be held, which is ample time to turn things around.

That won’t happen on its own, however, and as the warning lights of the economy flash a darker shade of red, Starmer should be minded to look back to the record of the last man to break the Tories’ stranglehold on power. In his first term alone, Tony Blair managed to enact a host of reforms that materially changed the political fabric of Britain. Many of these he gripped early on in his premiership, meaning that the benefits had time to accrue by the time voters next went to the polls. Short-term news cycles have certainly changed how politics works, but they haven’t rendered long-term governance a thing of the past just yet – Labour can’t forget that they have the power to act. On this, Anastasia Bektimirova shares Blair’s insights on X, taken from his recent book On Leadership.

So what else should entrepreneurs be thinking about this year?

The elephant (not playing chess) in the room is artificial intelligence. The only challenge is predicting the timeline. However, this isn’t entirely a black box; there are people with proven insights. Rodney Brooks, for example, has been making predictions since 2018. While he hasn’t always been spot on forecasting the timeline for AI, robotics, self-driving cars and human space travel, his deep knowledge combined with his self-awareness makes his 2025 update a must-read.

He’s not the only one worth reading to get a better understanding of how AI will evolve in 2025. Read Herbie Bradley to understand what Trump could mean for AI. Read Simon Willison for a comprehensive update on LLMs and AI, with a few hints at likely directions for the future. And read Austin Vernon for a view on how AI agents may be integrated into companies (this one is a short, essential read for all entrepreneurs).

There’s room for disagreement. That is why AI sceptic Gary Marcus has made a bet with Miles Brundage, formerly of OpenAI, on whether AI will be able to pass ten tests – including writing Pulitzer-caliber books, coming up with Nobel-caliber scientific discoveries, writing cogent, persuasive legal briefs – by 2027.

In reality, the truth likely lies somewhere between these extremes. The Pulitzer test may miss a more immediate shift. AI is already reshaping how influential thinkers approach their work. Economist Tyler Cowen says he is now writing primarily for AI as a target audience. So is researcher Gwern Branwen. (For my part, I’m still writing for humans.) What we can be sure of is that reality will be transformational for everyone reading this.

It’s time
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