"Technology leadership must drive economic activity" - the other bit of Vince Cable's letter to the PM

bryang | 1 Comment
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There was plenty of national coverage of business secretary Vince Cable's leaked letter to the prime minister, in which he lamented the lack of a "compelling vision" for UK economic growth, and called for the break-up Royal Bank of Scotland.

Lost among those headline-friendly soundbites was one of the major points in Cable's letter - the first of his five suggestions for a "strategic vision" for the UK's industrial future, namely the urgent need for "more leadership in identifying and supporting key technologies" - the letter even underlined "key technologies" for emphasis.

Cable used a phrase that Computer Weekly readers may be familiar with - it's something we've called for many times through many governments: "...technology leadership must drive economic activity in the future."

Technology is the future of the UK's economy, and Cable is spot on to say this, and equally to say that the government of which he is a part continues to fail on this - "our actions are rather piecemeal", as Cable says.

He calls for greater focus and more resources to co-ordinate the government's technology priorities. He's absolutely right.

Cable goes on: "Despite fantastic SMEs, we have produced no Amazon, no Google and no Intel. Key issues are in finance and skills, including how our equity markets function that leave too few potential giants to expand organically rather than sell up."

There's a couple of obvious comments to be made on Cable's observations. First, that the technology shortfall was such a strong theme of his letter, yet it received zero coverage at a national level. Second, that Cable is of course responsible for our technology and IT skills base as the minister for business, innovation and skills, so he's not exactly without his share of the blame.

It is refreshing on one level to see this issue being raised in such a senior political environment, but depressing that it still has to be said. I know I'm biased as a technology writer, but surely it is patently obvious to anyone that technology innovation is the future for any major developed Western economy, and that the UK has a unique opportunity - and a very limited window for that opportunity - to put a strategic policy emphasis on all things digital to make us a real world leader.

We are sadly not privy to David Cameron's response, and we will have to wait for the Budget later this month to see any evidence of a policy shift or new funding available.

But it will prove to be a devastating legacy for this, and any other government, that fails to see the opportunity of technology innovation as a core economic cornerstone. Let's hope we are not to look back in 10 years' time and read another leaked ministerial letter lamenting how we missed our chance back in 2012.

 

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I raised exactly these points in a letter on 25th January to my local MP for The Minister at the Cabinet Office. The following is the edited "leaked" version and like Mr Cable I wait for a reply......?

"I believe he needs to re-think policy in the interests of UK plc to both save money and help create some new global technology companies.

The first absolutely fundamental point is that Small Technology Companies (STC) have quite different needs for “support”. For a start they should not be “bidding” for government contracts which are service and “locally” driven. However, more importantly by the time it gets to procurement ideas are formulated and a taking on new technology is not on their agenda and the “buyers” are unlikely to have the required skill set to handle.

STCs have by definition global potential and Government as the intelligent buyer using to good effect such innovative technologies opens huge potential for export (unlike a service SMEs). As we all know UK’s track record to exploit innovation is very poor and in particular in the business to business market. Yet we as a nation have great intuitive innovation skills? The Government emphasis on R&D is to be commended but until commercialisation it is an expensive cost and there are no quick wins?

I have accumulated evidence since the excellent Cabinet Office sponsored conference that there is no initiative to ensure the Government becomes the “intelligent buyer”. Chris Chant made it clear in an open meeting recently we have to become one. However no one has been made responsible to implement. So why is this important? The obvious benefit is it should save money but actually is much more profound such as:
1. Makes clear a statement that Government procurement is their show not that of the suppliers by having knowledge of the best supporting technologies for whatever the purpose and expressed as required capabilities long before procurement.
2. STCs with good ideas are encouraged to build working solutions knowing that there is a ready buyer in government when fully proven with early adopters. (this is the US model)
3. The exploitation gap is filled which may allow longer term ownership by founders to see through to global success from a UK base.
4. The shortening of the innovation exploitation cycle will encourage early stage investors to support.
5. With UK Government leading by example the private sector corporations will be encouraged to be more aware of supporting STCs?

There is another strategic and big issue that Governments now face but can do little to curb that is where large companies dominate markets on a global scale. Such organisations are almost more powerful than individual governments and it is well know such domination stifles innovation. It is called the innovators dilemma (see attached paper). The only way to tackle this is that Governments need to be more intelligent in buying to encourage home grown innovation.

The above is generic to all STCs of which Procession is one with a breakthrough technology described as the holy grail of software by likes of Bill Gates. As such it is very “disruptive” a term applied where innovation has potential to change a market! (see attached paper). In Government’s case Procession technology will change its ICT strategy in particular on “open source” and “agile” where both will be significantly enhanced. It is very disturbing that the Minister has been totally misled as to what we are indeed just highlights the urgent need to become the intelligent buyer.

Perhaps you could convey this to the Minister and I hope is received in the spirit is given to help our country tackle a serious issue. I have spent 35 years (20 with ICFC/3i) working with SMEs and many STCs and have that (expensive) experience to contribute to thinking. This will take many outside their comfort zone but it is too important to ignore. It deserves an airing with a view to work out how best to formulate a policy. As for Procession great if recognised but more importantly use its experiences as an example as to why change is needed?


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