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 draws attention to ways to reform the Office for Budget Responsibility in a pro-growth fashion, Anastasia Bektimirova asks whether tokenisation of the economy may require us to rethink institutions, and Jessie May Green looks at how smart siting could boost the rollout of renewable power.
🧮 Eamonn Ives, Research Director
Some norms in British politics – like elections always falling on a Thursday – have been around for generations. Others sometimes feel like they have been, but are actually very recent phenomena. The sacrosanct involvement of the Office for Budget Responsibility in Treasury decision-making is one such example. Despite only being set up in 2010, the OBR enjoys an extraordinarily privileged position, and wields immense power over the government of the day.
We saw that on full display last week when Rachel Reeves delivered her Spring Statement, and made painstakingly exact spending promises in order to meet her fiscal rules. After all was said and done, the Chancellor maintained precisely the same headroom – £9.93 billion, down to two decimal places – as she enjoyed after her October Budget last year.
A defender of the OBR would argue that its scrutiny keeps chancellors honest and Britain’s reputation in the markets sound (or at least, more sound than the case would be otherwise). But an interesting challenge from economists Pedro Serôdio and Rohan Shah which recently caught my eye argued that the OBR is falling short in certain respects, especially when it comes to forecasting the impact of medium- and long-term policy changes.
This is enormously important for the future of our economy. Some of the things that matter most for increasing growth are reforms that the OBR, in their analysis, is not well set up to model. Think here of changes to planning frameworks that could deepen labour markets by allowing more people to live in the most productive parts of the country.
As well as convincingly diagnosing the issue, Serôdio and Shah prescribe a solution. For very little investment in the grand scheme of things, they outline how to bolster the OBR’s talent pipeline and enable it to do a better job of forecasting policy changes, and thus strengthen the scope policymakers have to make meaningful reforms. I won’t try to forecast the benefit of doing so myself, but I’d bet the answer would be net positive.
🧩 Anastasia Bektimirova, Head of Science and Technology
Think about how we’ve traditionally organised our economy. We group similar activities into industries, divide work into job categories, and create companies around related products and services. These divisions make intuitive sense to us as humans. But AI systems don’t share our intuitions.
AI systems divide information into ‘tokens’ – discrete units based on statistical patterns, rather than human meaning. Unlike human categories based on meaning and function, tokenisation creates divisions based on what works computationally rather than what makes intuitive sense. As Nicklas Lundblad, DeepMind’s Senior Director of Policy and Strategic Advisor, writes in his blog, the tokenisation process is already reshaping major industries:
“Consider how digital platforms have restructured industries by tokenizing previously continuous experiences. Uber tokenized transportation into discrete, algorithmic units; Airbnb did the same for accommodation; TikTok for entertainment. Each platform succeeded by reconceptualizing an industry in terms that could be discretized, quantified, and optimized according to computational logic. I think this comes close to what Andreesen meant when he noted that software will ‘eat’ everything – but in order to do that it first needs to digest the world, into tokens.”
As tokenisation spreads, our traditional industry boundaries might blur in unpredictable ways. We can already see this in how companies like Amazon and Apple operate across what were once distinct sectors, following patterns that transcend standard categories.
What I find most interesting about this line of thought is implications for institutions. Our institutions are organised around human-meaningful categories that emerged in specific historical contexts. If tokenisation fundamentally reorganises economic activities, then institutions – which are “the humanly devised constraints that shape human interaction” – may misalign with economic reality.
New technologies have often demanded new institutional forms – for example, the industrial revolution created corporations and regulatory agencies. Similarly, institutions will likely need to be designed around the actual patterns of a tokenised economy – potentially cutting across traditional domains like healthcare, finance, and education to address newly visible patterns of risk and opportunity. The greatest challenge ahead may not be the technology itself, but reimagining our institutions for a world where the organisation of economic activity no longer follows the patterns we’ve built our social structures around.
🛰️ Jessie May Green, Events and APPG for Entrepreneurship Coordinator
You may have heard a lot about the clean energy transition, but have you ever wondered what it looks like? With the Global Renewables Watch – a partnership between The Nature Conservancy, Planet Labs and Microsoft’s AI for Good Lab – you need wonder no more. Together, they have mapped the spread of onshore wind and large-scale solar over time using advanced AI and high-resolution satellite imagery.
In this interactive article by The New York Times, you can visually explore how renewable energy capacity has grown over the last eight years. For instance, the US’ solar and wind capacity has nearly tripled, China has built more than 120,000 wind turbines – almost a third of the world’s total, and emerging economies like Turkey are beginning to fulfil their solar potential.
Despite this progress, still around three quarters of global greenhouse gas emissions are generated by energy use, and so cleaner energy infrastructure must continue to be rapidly scaled to mitigate further global warming. This will require a lot of land. If not done thoughtfully, the expansion of renewables could – ironically – cause a lot of environmental damage, not to mention human conflict.
That’s where ‘smart siting’ can come in – choosing wind and solar sites based on where they’ll have the fewest negative impacts. The Global Renewables Watch dataset is unique in that it captures trends over a period of time, not just snapshot moments, and tracks underlying development patterns, not just development. Thus, it can predict where renewables siting may cause tensions to flare up, and assist in producing alternative plans. Considering how conflict can impede action on climate change, this is no small matter.
With Microsoft providing the AI and platform technology, Planet Labs on the satellite imagery, and The Nature Conservancy bringing the expertise needed to analyse the trends, this is a stellar example of the importance of cross-sector collaboration on climate action. With all the doom and gloom reports about AI threatening the environment, it’s nice to remember the positives too.
For too long, there has been a chasm between rhetoric and reality – between the way that too many politicians talk and think about growth, and the realities of productivity. It’s time to bridge this gap. It’s time to focus on business dynamism.
To butcher a Paul Krugman quote, business dynamism isn’t everything, but, in the long run, it is almost everything. As the ERC’s State of Small Business Britain Report 2024, which was released this week, clearly states: “The link between business dynamism and productivity growth at the national level is an empirically established fact.”
Business dynamism is the pace at which businesses start up, expand, shrink, or close down. It matters because high dynamism usually goes hand-in-hand with greater innovation, stronger productivity growth, and more job opportunities. When new businesses emerge, and existing firms grow or adapt quickly, it tends to promote competition, fresh ideas, and economic vitality. Conversely, if dynamism wanes – reflected in fewer startups and lower rates of growth – innovation can slow, job creation can stall, and overall economic progress may suffer.
In the UK, Professor Mark Hart has been leading this research for many years. He finds that, on average, about a quarter of UK jobs are either created or destroyed each year. However, the overall job reallocation rate has declined over time, suggesting lower levels of business dynamism. Notably, only 3-5% of existing jobs are created by newly launched businesses (startups), and that proportion has been falling in recent years.
One of the implications for policymakers is the need to think about policies to support wider categories of businesses – whether that’s startups reaching £1 million turnover within three years; established firms growing from £1-2 million turnover to over £3 million; or so-called “productivity heroes” that are increasing revenue per employee while also creating new jobs.
There are debates to be had about how to slice and dice the categories. And there are full-on arguments to be had about the policies needed to support them – where they overlap and where they differ. But there can be no arguing at all about the importance of business dynamism.
We’re planning to do more on this issue. Drop me an email if you’re keen to be involved.
Spring Lose
In case you missed it, we gave our reaction to the Chancellor’s Spring Statement. We covered everything from revised growth forecasts, additional investment pledged for defence capabilities, Making Tax Digital and the consultation on R&D tax relief.
As many of you will know only too well, R&D tax relief is an ongoing debacle. It was a major point of contention at a roundtable we held the day after. In fact, our Research Director Eamonn Ives wants to hear from you if you’ve been stung by recent changes to R&D tax credits.
Two other ongoing bones of contention also cropped up – the impending hike to Employer’s National Insurance Contributions, and forthcoming regulations contained in the Employment Rights Bill.
Group Focus
We are collaborating with Enterprise Nation to deliver a joint response to the Government’s call for evidence on e-invoicing, with a view to understanding how to further promote its use among Britain’s small businesses. We’re looking for views from all sides. If you want to have your say, join our focus group from 12pm to 1pm on 9 April to share your thoughts.
Esprit de Cork
The latest Adviser to join our growing ranks is Julian Cork, COO and Board Member of Landbay, a leading UK prime buy-to-let mortgage lender which he has helped scale the platform to a loan book of over £3.3 billion. As he says:
“Entrepreneurship matters. It is one of the most powerful engines of innovation, job creation, and societal progress. Founders and startups don’t just build businesses, they solve real-world problems, challenge conventions, and drive economic dynamism. For the UK to remain globally competitive, it must continue to be a place where entrepreneurs can thrive – where ambition is supported, innovation is celebrated, and barriers to growth are removed.”
We couldn’t agree more. Find out how you can join Julian as our next Adviser here.
In this week’s issue of Perennial Gale, I argue that if we’re serious about fixing Britain’s sluggish productivity, we need to stop speaking in vague platitudes about growth and start focusing on business dynamism. As the latest State of Small Business Britain Report makes clear, the link between dynamism and productivity is no longer up for debate. When businesses start, scale, adapt, or even exit at a healthy clip, the result is more innovation, more competition, and a more vibrant economy.
Yet Britain’s dynamism is faltering. Fewer startups are breaking through, and job churn – a key indicator of economic vitality – is declining. The challenge for policymakers is to support not just more startups, but a wider range of firms at different stages of growth. That means targeted policies for everything from high-growth early-stage businesses to mid-sized firms boosting productivity and creating new jobs. However we frame the debate, one thing is clear – business dynamism is not a nice-to-have, it’s the engine of progress.
In addition, we gave our reaction to the Chancellor’s Spring Statement, issued a call for entrepreneurs to speak their minds at our event on e-invoicing with Enterprise Nation, and said hello to Julian Cork as our latest new Adviser.
This afternoon, Chancellor of the Exchequer Rachel Reeves gave her Spring Statement. Read below for our team’s snap reaction to some of the main points concerning economic growth, innovation and entrepreneurship.
On the revised growth forecasts
Eamonn Ives, Research Director at The Entrepreneurs Network, said:
“For a Government which regards growth as its central mission, today’s forecasts are the epitome of a mixed bag. Supporters of the Chancellor will point to the upward revisions to growth figures from 2027. These are fuelled by the Office for Budget Responsibility deciding it can now evaluate the estimated impact of Labour’s planning reforms – which it thinks could single-handedly raise growth by 0.5%.
“Detractors, however, will note that growth projections for 2026 were slashed in half – to an abysmal 1%. What’s more, even if subsequent years do see higher output than previously anticipated, Britain will nonetheless fail to break 2% annual GDP growth by the end of this Parliament. Contrary to the cheers of Labour backbenchers, that should be no cause for celebration from anyone. Furthermore, while the OBR has factored in the positive growth effects of planning reforms, it has not done the same for the forthcoming regulations promised in the Employment Rights Bill. Should this legislation slow down hiring or impose additional burdens on employers, we should only expect yet more changes to the forecasts – and not in a welcome direction.”
On the additional investment pledged for defence capabilities
Anastasia Bektimirova, Head of Science and Technology at The Entrepreneurs Network, said:
“Today’s announcements signal recognition that our security landscape demands not just greater investment, but a fundamental transformation in how we deliver military capability. The £2.2 billion uplift for the Ministry of Defence, including investment towards technologies such as autonomous systems and AI-enabled capabilities, is welcome. The focus on bringing these innovative technologies to the frontline faster through UK Defence Innovation supported with £400 million ringfenced budget, scaling over time, is promising, as is the segmented procurement approach which could finally address the notoriously slow acquisition processes that have hampered our defence capabilities.
“But as always, the true test will be implementation. The new Defence Growth Board must include frontier expertise from the defence tech ecosystem, especially given the Government’s commitment to make it easier for startups to bring innovative technologies to the frontline at speed. Success will be measured not by announcements or budgets, but by whether our frontline forces can rapidly deploy cutting-edge capabilities that replace the dated systems they’ve been relying on for far too long.”
On the announcement on tax reliefs for entrepreneurs and investors
Eamonn Ives, Research Director at The Entrepreneurs Network, said:
“Britain is Europe’s leading entrepreneurial ecosystem but it didn’t get that mantle by chance. It took years of careful policy making to incubate an environment where founders, investors and alike can take bets on launching dynamic startups and growing them to scale. Longstanding and globally revered tax reliefs like the Enterprise Management Incentives Scheme, the Enterprise Investment Scheme and the Venture Capital Trust Scheme all fall firmly into this category – supporting not only home-grown entrepreneurs but also enticing foreign talent from around the world to choose Britain as their place to build.
“The Government’s announcement to convene a series of roundtables to examine these reliefs is therefore encouraging. Though they have proven successful to date, aspects of some now require inspection – not least around limits and thresholds for qualifying companies which have stayed static since their inception. With minor tweaks, we can ensure they continue to deliver for our precious entrepreneurial ecosystem, and by extension, the whole of the British economy.”
On the consultation on R&D tax relief
Philip Salter, Founder of The Entrepreneurs Network, said:
“For many founders of the UK’s most innovative companies, delays and uncertainty around the UK’s R&D tax credits regime have hit them hard. While the Government has made efforts to improve the system, more work is needed, with the announced consultation offering an opportunity to improve the system.
“However, the consultation is too focused on widening the use of advance assurance. While this can provide certainty to businesses, it’s not without an administrative burden – both for businesses and the government – and fails to address the more serious problems in the system: delays, errors, and a lack of avenues to reach HMRC.”
On the continuation of Making Tax Digital
Philip Salter, Founder of The Entrepreneurs Network, said:
“Continuing the rollout of Making Tax Digital is the correct decision from the Government. This will nudge Britain’s businesses towards increasing their productivity, as it reduces the time entrepreneurs devote to dealing with tax, while minimising inaccuracies. As a next step, the Government now needs a solid plan to present at the next Budget for the four million taxpayers who have income below the £20,000 threshold.”
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 calls for the Digital Services Tax to be scrapped, Anastasia Bektimirova examines what ‘Everythingism’ is and how it impedes good policymaking, and Jessie May Green looks into the innovators trying to solve water scarcity.
💸 Eamonn Ives, Research Director
While being interviewed by Laura Kuenssberg on Sunday, Rachel Reeves was asked whether there was any truth to the rumour that the Treasury is looking at junking the Digital Services Tax (DST). Her inability to deny it spoke volumes and raises the possibility of a not insignificant tax change being on the cards.
Introduced in 2020, the DST slaps a 2% tax on the revenues of large tech companies – like search engines, online platforms and marketplaces – and currently raises around £800 million a year. In order to be in scope for the DST, companies must make over £500 million a year from ‘digital activities’ and £25 million of that has to accrue from British users. In effect, this means that those who bear the (direct) brunt of the DST are invariably household American names like Amazon, Meta and Alphabet.
As implied by the Chancellor’s response when questioned, the Government sees this as an opportunity to barter with President Trump and potentially avoid being the victim of any new tariffs. We should absolutely use the prospect of scrapping the DST as a bargaining chip to not only dodge tariffs but also pave the way for a long-awaited trade deal between the UK and the US.
As the DST goes, it is an example par excellence of terrible tax policymaking in theory and in practice. By the way it effectively cherrypicks which firms it impacts, it violates the principle of neutrality. By the way in which it taxes revenues and not profits, it unfairly penalises low-margin or loss-making firms, potentially hampering productive investment which we desperately need more of. Meanwhile, the empirical evidence we have of the DST shows that those who do pay it simply pass on higher costs to users – such as advertisers on Google or small third-party sellers on Amazon.
Even if the motor of world trade was humming along nicely, canning the DST would still be in our own self-interest. This fact is only rendered more true if it could help us to negotiate closer economic ties with the world’s biggest economy at a time of heightened global tensions. In a strange way, simply having the ability to shelve the DST might be the best thing it achieves in its short life to date.
🤹♂️ Anastasia Bektimirova, Head of Science and Technology
A new essay by Joe Hill, Policy Director at Reform think tank, identifies ‘Everythingism’ as a pathology undermining effective policymaking. Joe writes:
“Governments try to advance their objectives through many different instruments – policies, legislation, economic measures, national infrastructure and public services. Not only do they struggle to prioritise between the objectives, but also to identify which instruments are best used to deliver those objectives.”
This creates a system that struggles to learn. When every policy is expected to optimise for growth, sustainability, social inclusion, regional balance, and other objectives simultaneously, it’s hard to isolate variables to determine which approaches work for which purposes.
I see a parallel with the scientific method here. Imagine running an experiment where you’re not allowed to control variables to establish correlations or causality. The same happens when every policy must serve every goal. Science advances through testing hypotheses and isolating variables; our policy approach assumes that the answers are known in advance. One system is designed to learn, the other pretends to already know.
The institutional culture that sustains Everythingism makes it difficult to overcome. Joe’s essay quotes Dame Angela McLean, the Government Chief Scientific Adviser, who contrasts the civil service’s aversion to disagreement with academic standards of challenge:
“It is very frequent in a civil service meeting that as somebody stands up the very first thing they will say is ‘I agree with everything that has been said’, and you are sat there thinking ‘well you can't have been listening then’.”
While I had previously noted Dame Angela’s observation on academia’s culture of disagreement at the expense of action, Joe points out how the civil service itself could benefit from the academic tradition of robust challenge. Everythingism thrives in conflict-averse environments – where policies can accumulate objectives because no one feels incentivised or empowered to question their compatibility or trade-offs.
The scientific community understands that progress often comes from focusing resources on specific questions rather than diffusing attention across every possible line of inquiry. We need a similar discipline in policymaking – recognising that when everything is a priority, nothing truly is. Joe’s diagnosis points to a clear prescription: we must recover the courage to prioritise, to match specific instruments to specific purposes, and to build institutions where honest, evidence-based disagreement is the expectation.
💧 Jessie May Green, Events and APPG for Entrepreneurship Coordinator
World Water Day last Friday shone the spotlight on innovators working to improve water security globally – from solar-powered desalination in Egypt, to mangrove forest restoration in India, to desertification reversal in Saudi Arabia. Looking at these arid landscapes, it seems absurd that we – in perpetually drizzly Britain – also face challenges when it comes to managing our water supplies.
You’d be forgiven for thinking this country is wet enough – our green fields and grey summers are all too convincing. But the truth is that we waste a lot of the water that falls on these lands, causing shortages in populous areas such as the South East of England, with huge economic impacts. As Public First’s Bertie Wnek comments on their recent report on the subject:
“Water availability is becoming a very serious issue, already constraining new commercial and housing development in parts of the country. Our research suggested 60,000 new homes could be blocked in the East and South East of England alone over the next five years. Worse still, the problem is most severe in some of our highest productivity areas, like the Oxford-Cambridge Arc, which recent Public First analysis - referenced by the Chancellor in February - suggests has the potential to contribute £78bn to our economy by 2035.”
Thus, there is plenty of need for innovation in this country, too. Some projects to watch that are currently in R&D include: Pipebots – tiny autonomous robots that inspect underground water pipes and repair damage; FreeOx – a hydrogen-based formula for water treatment; and ‘lightning in a jar’ – Anamad’s low-energy, lightning-inspired alternative to chlorination. Budding entrepreneurs in this area, let this be your inspiration!
Welcome to Perennial Gale – the new home for our Friday newsletter. Its name isn’t a reference to this weekend’s inclement weather forecast, but a quote from Joseph Schumpeter’s description of capitalism as “the perennial gale of creative destruction.” His observation in 1942 was that capitalism is neither stable nor static, but constantly shaped by innovation, entrepreneurship and change. Entrepreneurs are central to this, driving forward economic progress by disrupting existing systems – what he termed “creative destruction.”
Schumpeter was one of the first economists to take entrepreneurship seriously. It was his work, along with that of many others, which inspired us to start The Entrepreneurs Network over a decade ago. While there were, and still are, lots of people lobbying on behalf of the more static parts of the economy – whether large incumbents or small businesses – there was the need for an organisation focused on ensuring that ambitious entrepreneurs across all sectors of the economy have a voice in Westminster. We are that voice.
The wider movement that we are part of is starting to win the battle of ideas. Just this week, the Prime Minister penned an unequivocal piece for City A.M.:
“To deliver economic growth – the number one mission of this government – we need to unleash the power of the private sector. Entrepreneurs who work day and night to build a business from scratch. Family companies that have passed know-how across the generations. Iconic British companies employing thousands of people across all sectors. Investors who provide the capital and expertise that fuels growth and innovation.”
But winning the battle of ideas is only half the challenge. We also need to see change – and the right sort of change. The Government’s New Approach to Ensure Regulators and Regulation Support Growth has a lot going for it in identifying the complex, duplicative and uncertain state of regulation in Britain. It also correctly highlights the excessive risk aversion from regulators, and the high administrative costs regulations impose on businesses (potentially up to 3-4% of GDP). But action is needed.
To support us in helping the government make that change, we need the support of the thousands of entrepreneurs who read this: first, to tell us what your challenges are; second, to speak directly to policymakers and policy influencers at our events; and third, to continue to back and spread the word about our work and campaigns.
On point one, we will now be asking you every week to tell us what your business challenges are (more on this below). These can be any sort of challenge. If it’s a policy challenge, we’ll pass it on directly to policymakers. If it’s a business challenge, we’ll let you know if we know someone who can help. But even your most practical challenge will still be useful for policymakers. After all, the government is already spending billions on trying – and too often failing – to help with these too.
On point two, we have two upcoming events that might be of interest. On Thursday morning we will be at OakNorth reflecting on the Chancellor’s Spring Statement (request a place here). Your insights will directly inform our reaction. Then, on the morning of 1 April, we will be with Steve Rigby at Blick Rothenberg to discuss the serious matter of the impact of inheritance tax changes on entrepreneurs and family businesses (request a place here). Beyond being one of our Patrons, Steve has become a mega-influencer (for want of a better word) in policy circles. See what three things he thinks can steer the country in the right direction (paywall – The Times) and don’t miss his sterling performance on Sunday with Laura Kuenssberg.
Go Forth
Friend of the Network and Co-Founder of The Data City, Tom Forth, has been busy reading no fewer than 14 things published about the National Data Library (NDL), and has penned a blog on what he finds good, what he finds weak, and what he thinks the NDL should be (and, most importantly, where in the country it should be located). It’s a thorough piece which I recommend to anyone following the NDL’s progress (or seeming lack thereof).
And if you work with data in academia or the private sector and want to make sure the NDL is developed in a way that serves your needs, you can do your part by filling out the survey we’re running together with the Tony Blair Institute.
For over a decade, we have been the voice for entrepreneurs in Britain – conducting original research, campaigning for change and building an extensive network of ambitious founders, innovators and other key players in the wider entrepreneurial ecosystem.
Drawing on this expertise, we’ve decided to establish The Entrepreneurs Network Advisory to help shape policy landscapes and support businesses navigate complex regulatory environments. This formalises work that we’ve already been doing, including policy consultancy for entrepreneurs, public affairs and stakeholder engagement, polling and focus groups, media advocacy for entrepreneurial impact, and government advisory. Find out more here.
Three Big Ideas is our weekly roundup of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
In this week, Eamonn Ives argues the case for technological solutions over behavioural adaptations, Anastasia Bektimirova weighs in on a debate about entreprenerial scholars, and Philip Salter explains why the path of liberalism is the one he’d prefer to take.
😷 Eamonn Ives, Research Director
This coming Sunday will mark half a decade since then Prime Minister Boris Johnson took to our television screens to announce the first nationwide lockdown in response to the escalating Covid-19 pandemic. To slow the spread of the disease, we were instructed to remain indoors and strictly minimise contact with other people. A number of other rules cropped up shortly thereafter – you might remember having to keep two meters apart, abiding by one-way systems and queuing for an eternity outside supermarkets.
Ask an economist and they might tell you that all of these interventions were essentially attempts to correct harmful externalities via ‘social coordination’. We were trying to control Covid-19 by deliberately altering our behaviour, and thus making it harder for it to pass from person to person. And while that might have at least partially worked to lower the rate of new infections, it could only ever be a temporary solution. What we required to truly defeat the virus was not social coordination but rather a technological breakthrough – in the form of a vaccine.
All of this is a long-winded introduction to say that I agree with Max Tabbarok when he asserts in his latest Substack that: “Economics should emphasize the importance of technology as a solution to externality problems and focus less on social coordination.”
He invokes many other areas where humanity has solved pressing and sometimes seemingly intractable social issues, not through individuals coming together and working out how to best manage the situation, but by inventing our way out of the situation in the first place. While social coordination can certainly be a stop-gap to urgent challenges, we should be reminded that genuine long-run progress typically comes from innovators devising technologies that allow us to break free from our current confines and live in a world controlled by us, not the other way around.
👨🏫 Anastasia Bektimirova, Head of Science and Technology
Times Higher Education (THE) published an article by Ilana Horwitz on her new book The Entrepreneurial Scholar, arguing that:
“Institutions are changing, and the definition of scholarly success is evolving. It is no longer enough to make minor contributions to arcane fields of knowledge. Scholars must make meaningful contributions to real challenges. They must make connections across disciplines and sectors. They must adapt and contribute to the uncertain world beyond the ivory tower. In short, they need to think entrepreneurially.”
I wholeheartedly endorse this spirit. Yet, looking at the comments under THE’s Chief Global Affairs Officer’s LinkedIn post about the article, I was struck by how quickly the concept of the entrepreneurial scholar can be misconstrued – conflated with commercialisation or abandonment of academic rigour.
It doesn’t mean to “forget about basic research,” as one commentator puts it. Nor does “seeing knowledge as a business,” as another one argues, imply “serving finance or business” at the expense of pursuing knowledge that drives advances. If anything, being an entrepreneurial scholar is about proactively building bridges between disciplines, seeking out more avenues to pursue research and make it actionable – whether for further scientific progress, to inform policy, or drive societal benefit through innovative products and services. The goal is to amplify the potential reach and impact of scholarly work, not make it less scientifically rigorous.
My gentle disagreement with the article, however, is with the point that “institutions are changing.” In reality, institutional conservatism within universities and research funders persists. For example, as I wrote earlier, even though the funding landscape is becoming more diverse, academic institutions continue to train scientists almost exclusively to succeed within the same conventional funding paths. This narrow approach reinforces the very system that alternative funders are trying to complement, creating a self-perpetuating cycle of institutional resistance to progress. The rhetoric of change often outpaces actual structural transformation.
🗽 Philip Salter, Founder
Richard Hanania draws a useful distinction between populism and elites in an article explaining why Donald Trump and Joe Rogan aren’t elites.
According to Hanania, elites are those who derive status from established cultural, political, or social institutions – cultivating esteem primarily among their peers rather than broad audiences. In contrast, populists place blame for societal problems on these elites, championing values that resonate with the masses but are disfavoured by institutional insiders (such as anti-wokeness, mysticism, and traditionalism), and gain status by appealing directly to large audiences rather than seeking elite validation.
Over time, the philosophy of classical liberalism has curbed many of the worst excesses of both, by emphasising pluralism, procedural fairness, meritocracy and individual rights. But as our current era demonstrates, this effort is never conclusively won.
This is why it’s great to see Eamonn (of this house) join forces with fellow liberal Callum Price, standing athwart recent history, yelling ‘Stop’. Their new venture, the Liberal Digest will bring together liberal voices who refuse to accept mediocrity, and to push back against the rising tide of populism.
Back in 2016, Matthew Parris’s defence of Britain’s Liberal Metropolitan Elite was more humorous than urgent. Nearly a decade on, his defence of the liberal elite was more sincere: “Liberals should stop beating ourselves up, stop whimpering about how we failed to address populist concerns, and face millions of good but deluded men and women with honest argument. They are wrong. We are right. We shall be proved right. Chins up.”
Ultimately, liberals – broadly defined – can be validated either by demonstrating that elite institutions effectively serve the public or by allowing populists to govern, thereby showing that they are the lesser of two evils. I know which path I would prefer.
Phew! What a week in the world of policy. Even without Trump’s tariffs, there is more than enough fodder to write about – from welfare reforms, to growing concerns over the Employment Rights Bill, to the Planning and Infrastructure Bill being revealed, and half a dozen other things besides.
We’ll get into each of these at some point. But today, I want to write about One Login. Well, more precisely, I want to encourage you to read James O’Malley’s excellent article on why the new GOV.UK login system is the first step in a radical transformation of the British state.
Inspired by the successful Government Digital Service (GDS), established in 2011, the UK has now launched a new Digital Centre of Government, bringing various digital initiatives under one coherent strategy. O’Malley contrasts this careful evolution with Elon Musk’s “bull in a china shop approach” to DOGE (Department of Government Efficiency).
One Login aims to consolidate hundreds of government logins into a single credential. Currently accessible for services like veteran ID cards and DBS checks, major services such as Universal Credit and HMRC remain separate for cautionary reasons.
For businesses, this means a lot less bureaucracy. For example, as I’ve been writing for years now, in Estonia it is estimated that these sorts of reforms save business owners around 12 million hours every year. (Given there are around 36 British companies for every Estonian one, an – admittedly very crude – estimate for time that could be saved here would be approximately 430 million hours per year!)
A key ambition is the ‘once-only’ principle, meaning you’ll only have to submit your information once, leaving government responsible for updating records across departments automatically – similar to the existing ‘Tell Us Once’ service used for death notifications. This is, as I wrote in our essay collection endorsed by Tony Blair and Stripe’s Patrick Collison, “the way of the future.”
Do read O’Malley’s piece to get the full breadth of the potential. But ambition is one thing, and reality is another. The first hurdle will be ensuring these aspirations aren’t dented by the upcoming Spending Review.
n+1 = innovation
Following the announcement that former Science Minister Lord Willetts has been appointed as Chair of the Regulatory Innovation Office (RIO), this week was perfect timing to publish my interview with John Fingleton CBE to get his perspectives on how Britain should go about regulating markets in a way that encourages more innovation and economic growth.
I first heard John speak when he was head of the Office of Fair Trading (the precursor to the Competition and Markets Authority) and have followed his insights on all things regulation for years.
Our conversation covered what it would take for RIO to hit the ground running – how it should work with other bodies, how regulators can embrace risk in a risk-averse society, and how regulators should approach the AI sector.
Sense on Security
We’re delighted to welcome Julia O’Toole, Co-CEO of MyCena, as an Adviser. Combining mathematics and neuroscience, she spent over 20 years researching cybersecurity gaps, creating a pioneering mathematical model that eliminates human-managed credentials and prevents credential-based attacks. Her expertise combines advanced encryption, cybersecurity practices, and practical business solutions for digital safety.
Julia thinks: “If the UK government aligned their policies with innovative companies’ needs, improved connections between entrepreneurs and resources, and optimised procurement and grant processes, it could enable more technological advancement, driving growth, jobs, and competitiveness.”
We couldn’t agree more. Drop me a message if you’re keen to join as an Adviser.
One More Week
Our migration of this newsletter to Substack will be delayed by a week, as it turns out too many of you receive our newsletter to do this without Substack first doing a human review. You should get a friendly welcome email confirming this. If you want to get ahead of the game though, simply subscribe here.
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 implores smart entrepreneurs to work on reducing the cost of far-UVC, Anastasia Bektimirova unpacks a new report that criticises Whitehall’s siloed approach to Industrial Strategy, and Jessie May Green asks whether President Trump’s DEI pushback will ripple across to the UK.
🦠 Eamonn Ives, Research Director
Scale insensitivity is one of the biggest failure modes in politics today. All too often, policymakers will inadequately assess the scale of an issue, and then craft a response that is either utterly underwhelming or extremely excessive. A paradigmatic example is the fixation of lawmakers to ban just about every form of disposable plastic to prevent ocean pollution, despite the fact that Europe – let alone the UK – contributes just 0.6% of total plastic waste that ends up in our seas.
One genuinely life-or-death problem that we have so far mustered a very much underwhelming response to is pathogens that spread through the air. As I learnt from Blueprint Biosecurity’s Richard Williamson’s piece for Works in Progress:
“Airborne infectious diseases remain one of humanity's biggest challenges: The COVID-19 pandemic has claimed an estimated 27 million lives. Tuberculosis kills 1.6 million people annually. One billion people are infected by influenza every year, leading to millions of serious illnesses and hundreds of thousands of deaths.”
Aside from the human tragedies behind these statistics, airborne diseases also pose enormous economic costs. Finding solutions to mitigating them would represent perhaps one of the highest impact things an individual could possibly be working on right now. Fortunately, Williamson points to an intervention that could be just that – far-UVC, a form of ultraviolet light which appears to be a powerful germicide while still being safe for humans. A watershed study of far-UVC showed that it can slash concentrations of airborne bacteria by 98.4%, equivalent to totally refreshing the air in a room 184 times every hour compared to standard ventilation.
One obstacle to the wider deployment of far-UVC systems is their cost, which can render them prohibitively expensive outside of specialist applications such as in hospitals. Just as I wrote before about the need to crack cheap air conditioning, bringing down the price of far-UVC also seems like a challenge where a brainy entrepreneur could do an inordinate amount of good in the world.
⛓️💥 Anastasia Bektimirova, Head of Science and Technology
In a report released today, the National Audit Office (NAO) finds that Britain’s Industrial Strategy is being held back by poor Whitehall coordination. It warns that the Department for Business and Trade (DBT), which is leading on the development and delivery of the Industrial Strategy, is finding it difficult to coordinate with the ten other relevant departments, citing immature relationships and limited evaluation capabilities. As the NAO puts it: “DBT faces challenges in its relationships with departments who view growth as integral to their own work and therefore have a different approach to growth and prioritisation in those sectors.”
This disconnect is causing “frustration” among businesses that are trying to navigate government support. This was illustrated at last week’s Business and Trade Committee evidence session by Steve Brierley, Founder and CEO of Riverlane, a Cambridge-based quantum computing company:
“DSIT [the Department for Science, Innovation and Technology] is doing a great job in bringing together the Quantum Strategy. The challenge with quantum though is that it impacts so many different departments – it’s impacting defence, life sciences, advanced manufacturing, clean energy – it cuts across a lot of these pillars. The challenge then is: does everyone think it’s someone else’s job to figure this out?”
These concerns are not new. Focusing specifically on meeting national science and technology objectives, a report I co-authored back in 2023 argued that the creation of DSIT was a positive step but insufficient without addressing broader coordination challenges. The report identified this as a critical factor in becoming a science superpower, recommending several solutions, including appointing a Permanent Secretary-level official to lead the National Science and Technology Council, giving the DSIT Secretary power to approve R&D spending across departments, moving universities from the Department for Education to DSIT, and establishing formal mechanisms to align regulatory bodies.
Today’s findings from the NAO are yet another warning sign that even well-designed strategies for specific technologies or sectors risk falling short of their potential to drive economic growth and meaningful innovation if there isn’t effective cross-government coordination. We need the government to not just create ambitious policies, but to rethink how it organises itself to deliver them effectively.
🌊 Jessie May Green, Researcher
Despite being a UK-based company, the pharmaceutical firm GSK has paused various activities relating to diversity, equity and inclusion (DEI) following Executive Orders from US President Donald Trump. Onlookers may reasonably wonder, will this set a precedent for other British businesses, even if they’re separated from America by thousands of miles of Atlantic Ocean?
Though not legally obligated, many British companies may be eager to please the new President due to the importance of the US market. Indeed, Emma Walmsley, GSK’s CEO, said they were obliged to make the changes given that the USA is their largest market and the US Government is their top customer.
Commenting to The Guardian, employment lawyer Sarah Tahamtani said: “I can’t imagine a situation where a UK employer would be bound by an executive order in the US.” However, Tahamtani notes that Trump’s orders could shift ‘the general mood’, potentially creating ripple effects that impact the way UK businesses approach DEI.
Thankfully, these decisions do ultimately lie with individual companies, not heads of state. I’m sure the founders reading this can attest to the benefits of a diverse workforce. Broadly speaking, CEOs tend to know what’s best for their staff – and it’s with them where responsibility should rest.
In our latest interview, Philip Salter spoke to John Fingleton CBE, Chair of Fingleton and former CEO of the Office for Fair Trading (the precursor to the Competition and Markets Authority). They discussed how to make a success of the new Regulatory Innovation Office, how to reform competition policy to support growth, and much more.
I’m delighted to share that today we’ve launched our Young Entrepreneurs Forum. It aims to connect and empower young people building incredible things across the world, and influence governments to create better enabling environments for young entrepreneurs.
For the Forum’s inaugural year, we will focus primarily on identifying solutions to barriers preventing a greater culture of entrepreneurship among young people here in the UK. We will do this by hosting meetup events for young entrepreneurs to gather their thoughts and insights, which will ultimately feed into a policy report and be launched later this year in the Houses of Parliament.
Needless to say, this won’t be headed by an old-timer like myself. We’re grateful to Sean Kohli for chairing and supporting us on this project. Sean is an undergraduate student studying at UCLA and also a General Partner of an early-stage fund spun out of the Why You Should Join newsletter, which highlights early-stage startups on track to becoming generational companies. He also manages a growth and opportunity fund in Luxembourg, backing transformative later-stage startups, and serves on the board of Team Vitality, Europe’s leading esports organisation.
Sean’s involvement stems from a deep-rooted commitment to elevating the UK’s startup ecosystem, shaped by his experiences as an entrepreneur and venture capitalist in the US. In the wake of a new AI-driven epoch, he believes that the UK must accelerate its pace of innovation and entrepreneurial spirit by empowering our brightest and most ambitious minds to build this country’s future. We wholeheartedly agree.
Young people can join the Forum here. By joining you’ll be invited to our meetups, be invited to share your views to shape the final report and be invited to the launch in the Houses of Parliament.
To be clear, this isn’t just for those who have registered a business. We also want young people from the UK and around the world who have built tech, started charities or run campaigns. This is all about ambition.
If you take nothing else from today’s newsletter, forward this onto the most ambitious young people know.
Our country needs them!
Down to Business
Our country also needs more companies exporting and more innovators procuring. We know both these areas of business are replete with hurdles.
That’s why we’re hosting two online meetings with the Department for Business and Trade on Overcoming Barriers to Procurement and Overcoming Barriers to Exporting. If you have experience of either, request a place today.
Data with Destiny
Last week, our joint paper with the Tony Blair Institute set out a delivery roadmap for the National Data Library (NDL).
Now it’s your turn to tell us how to make the NDL as useful as it can possibly be. Are there existing but inaccessible government data, or new datasets that should be created that would advance your work? What supporting services would help you work effectively with these datasets? What bottlenecks most limit your progress?
We want to understand the real barriers you face. If you work with data in academia or the private sector, and think that the NDL could help your work, tell us.
No More Monkeying
As many of you will have spotted, we’re doing a lot more on Substack. As of next week, this newsletter will come to you via Substack (currently it’s delivered via MailChimp).
Apart from a couple of design changes, you won’t notice the difference. Nevertheless, it’s good manners to let you know, so if you would like to be taken off the list or have any questions or concerns please let me know.
Community Pillars
With a healthy dose of trepidation, we’ve created our first open group on our WhatsApp community. It’s to discuss “how to make the UK the best place in the world to start and grow a business”. You can join here. Just to note, your phone number will be visible to others in the community.
Separately, Advisers and Patrons should join this private group, and Supporters should join this private group. Find out more about becoming an Adviser, Patron or Supporter here. If you’re unsure if you’re one, drop me an email.
If this is all too confusing, you can just join the Community here. Within the community, nobody else can see your number unless you are already in their contacts.
ChatEMA
Finally, our good friends at Enterprise Nation have recently launched Ask EMA – an AI-powered personal business assistant, designed to provide instant, personalised business support whenever you need it. Play with it here.
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 whether culture really can explain the economic gap between Britain and the US, Philip Salter weighs up the case for and against banning non-competes and Anastasia Bektimirova makes a plea for greater diversity in funding innovation.
🎭 Eamonn Ives, Research Director
On Monday, together with the Jobs Foundation, we hosted a discussion on what can be done to get Britain more excited about business. Unsurprisingly, the question of culture swiftly arose. Some in the room expressed the belief that Brits have developed an almost innate aversion to risk-taking, and that this can explain why countries like America have pulled ahead economically in recent decades.
I’m sympathetic to the line of reasoning. You hardly have to spend long in the US to know that it certainly feels right. But we should hold ourselves to a higher standard than mere gut instinct. A recent blog from Alex Chalmers takes a cooler look at the data, and convincingly argues that while cultural differences exist between our nations, they’re scarcely large enough to plausibly explain the gulf in economic outcomes.
Pleasingly, for someone in the business of influencing policy change, it turns out – surprise, surprise – that legislative choices really do matter. How we regulate employment, how we manage trade with our neighbours, how we govern innovative technologies and how we (dis)incentivise investment will all have more of a bearing on the long-run economic trajectory of a country than any minor population-level differences in attitudes that may exist towards to wealth creation.
On the same day that Alex published his piece, Patrick and John Collison issued their annual Stripe letter. It’s a characteristically insightful read but one part in particular leapt out at me: “The IMF recently measured a 2.5 percentage point annual gap between US and European productivity stemming from differences in allocative efficiency. [...] A 2.5 gap is huge: the difference between 1% and 3.5% GDP growth, for example, amounts to 22% versus 100% growth over just 20 years.” As they then note, disruption caused by new technologies like AI will pose challenges for labour markets all around the world – and those which can’t adapt to it will invariably lose out.
All of this is to say – culture’s important, but, at the margin, policy matters more. I think that should be encouraging, for if we can just tweak a few things here and there, large gains stand to be made.
🤝 Anastasia Bektimirova, Head of Science and Technology
In an interview published last week, Jacob Trefethen, who oversees Open Philanthropy’s science and science policy programmes, explained an overarching criterion behind much of the organisation’s grant-making: funding work in neglected fields to support scientists who would not otherwise receive funding from other sources.
The UK’s Advanced Research and Invention Agency (ARIA) operates with a similar philosophy of funding the work that is unlikely to be backed through other mechanisms – focusing on high-risk, potentially transformative research that traditional funding mechanisms shy away from. This includes, as ARIA’s Precision Neurotechnologies Programme Director Jacques Carolan recently noted, collaborations requiring such diverse expertise that traditional funding mechanisms struggle to support them.
These alternative funding cultures represent an amazing evolution in how we pursue scientific enterprise. Yet, their impact depends on a strong pipeline of ideas in a genre that challenges mainstream thinking – a pipeline our current academic system may not be adequately nurturing. Our academic institutions prioritise training scientists to succeed within conventional funding paradigms. PhD researchers learn to craft proposals that appeal to traditional grant committees, reinforcing the very system these alternative funders seek to complement. How often do early-career scientists receive guidance on pitching to unconventional funders? And perhaps most critically, how might research questions themselves evolve if scientists were trained to consider these alternative pathways from the outset?
Michael Nielsen and Kanjun Qiu captured this dilemma well in their 2022 essay A Vision of Metascience: “Scientists often apply for grants on the basis of what they believe is fundable, rather than with their best ideas. We’ve spoken with scientists who tell us ‘I know I can get funding for many fashionable-but-unimportant projects, but I can’t get funding for the work I think is most important’.” As with many ecosystems, diversity breeds resilience and innovation, while homogeneity and concentration make it difficult for best practices to spread. Our academic training should nurture researchers who can thrive within this increasingly diverse funding landscape.
🚫 Philip Salter, Founder
Over on X, Nando de Freitas has a post arguing for European countries to copy California by banning non-competes. Given the subject matter at hand, it’s clearly an idea worthy of consideration at the highest levels – something Nando evidently agrees with, given he tagged in Presidents and Prime Ministers alike.
As Evan Starr of the Economic Innovation Group reported last year, empirical evidence on the prevalence and harms of non-competes and their enforceability has grown.
The latest evidence suggests that non-compete agreements harm workers, small businesses, and consumers alike. Non-competes seem to suppress wages, reduce job opportunities, and limit competition in the labour market. Startups suffer, as non-compete enforcement reduces new firm entry, stifles innovation, and reinforces the dominance of large, established businesses.
Starr argues that the misallocation of talent, reduced knowledge spillovers, and lower levels of entrepreneurship outweigh any potential benefits. Companies face fewer incentives to innovate or improve efficiency, leading to stagnation in industries that could otherwise thrive.
In 2023, the UK Government consulted on this. Ultimately, the Government decided against mandatory compensation and a complete ban. Instead, they opted for a statutory limit of three months on non-compete clause durations (though this hasn’t really gone anywhere).
This may be a case of the Middle Ground Fallacy. As we argue on university spinouts, sometimes the radical idea is the right one.
Public services in the UK are drowning in data but starved of actionable insight. Our data infrastructure is fragmented and unfit for purpose, which means valuable public sector data go underutilised. Labour’s manifesto commitment to build a National Data Library (NDL) could change that, however, making public data faster and easier to access and use. But for it to actually work, it needs more than just good intentions – it needs a clear vision and a solid plan.
This week, in a joint paper – Governing in the Age of AI: Building Britain’s National Data Library – our Head of Science and Technology Anastasia Bektimirova together with co-authors from the Tony Blair Institute for Global Change delivered that detailed plan.
They leave nothing to chance, setting out in detail what needs to be done in the short, medium and long term. Getting this right would represent a transformative upgrade in the relationship between government and its citizens, while unlocking innovation opportunities for academia and businesses.
In academia, the NDL could revolutionise medical research by enabling scientists to assess treatment effectiveness more rapidly through NHS and social care records. Environmental researchers, meanwhile, could integrate air-pollution and health data to develop more effective public health interventions. By providing seamless and secure access to vital information, the NDL would empower researchers to tackle pressing societal challenges with greater precision and speed.
In the private sector, the NDL could fuel R&D. Startups and established firms alike could benefit from streamlined access to high-quality data sets, reducing the time and resources currently wasted navigating complex bureaucratic processes. This could, for example, help edtech companies build more effective personalised learning platforms.
In government, the NDL could improve policy design by enabling better data-sharing between Whitehall – for instance facilitating closer collaboration between HMRC, the NHS, and the Department for Work and Pensions to identify health-related barriers to employment and shape more effective welfare policies. Local councils, too, could use the NDL to deliver better public services, proactively identifying at-risk families and intervening before crises escalate. By streamlining data access while maintaining security and privacy, the NDL would enable smarter decision-making across the public and private sectors.
The paper offers over 40 detailed recommendations to make the NDL a reality. Among my favourites is to have dedicated National Data Librarians within government departments. Collectively, they would act as cross-government advisers who ensure data is accessible and aligned with real-world needs. Another great recommendation is that the UK should introduce a unique personal identifier to enable accurate data linkages across public services, following successful models from Estonia and Finland where such identifiers have transformed digital government while strengthening citizens’ control over their data.
The paper paints the NDL not as a giant data lake centralising all government data in one place. Instead, it should enable secure, federated access while ensuring departments retain control over their own data. It won’t function as a commercial marketplace selling government data, but rather as a facilitator of responsible and ethical use of public-sector information. The NDL’s true value lies in transforming data access by making it easier, faster, and more secure to link and use government data while standardising and simplifying data-sharing processes.
Entrepreneurs’ ingenuity will be critical to ensuring that the NDL’s full potential is realised – but first the Government needs to get on with delivering on the promise in (and of) its manifesto.
Food for Thoughts
Yesterday we hosted Parmy Olson for a dinner with Fora about her bestselling book Supremacy. It tells the behind-the-scenes story of the battle between OpenAI and DeepMind, and won the Financial Times and Schroders Business Book of the Year Award. You can find out more and get a copy of Supremacy here.
We’re busy planning our next Fora dinner. If you’re an Adviser, drop me an email with the names of who you’re keen to hear from.
As you’ll see below, we’ve got a lot of events planned and have just brought on a new team member to help us keep up with the demand. This is a roundabout way of suggesting: now’s the time to join us as a Supporter or Adviser to ensure you can come to as many of these as you want, while supporting our efforts to make the UK the best place in the world to start and grow a business. It only takes a few clicks.
Tiny Experiments
On the theme of books, Adviser to the network Anne-Laure Le Cunff, has one out: Tiny Experiments: How to Live Freely in a Goal-Obsessed World. In this transformative book, neuroscientist and entrepreneur Anne-Laure reveals the easier, proven method to achieve our ambitions: an experimental mindset.
You can find out more and get Tiny Experiments here. Anne-Laure’s also hosting an experimental supper club on the evening of the 18 March, which you can buy tickets for here.
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 advocates for zonal electricity pricing, Philip Salter discusses IQ and entrepreneurship, and Jessie May Green writes about the health of the UK’s net zero economy.
⚡️ 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.
