I was recently asked to give evidence to the House of Lords Select Committee on the European Union – EU Internal Market Sub-Committee enquiry into UK-EU trade in a post-Brexit world. I was joined by Anthony Walker from TechUK, and Russ Shaw from Tech London Advocates.
For a dry topic, the questions asked by the Committee were wide ranging and comprehensive: the need to solve the digital skills crisis if UK business is to compete on a level playing field with its European and global counterparts; the critical need for clarity on what the Brexit deal, and the consequent transition period will look like; the impact of a no deal scenario on the industry; future data flows between the UK and the EU and, above all, the potential impact that all of this could have on investment decisions and UK businesses ability to scale and grow.
These are big issues for our industry, with no easy or immediate answers. But I was surprised by Lord Whitty’s final question: “I am however going to abuse the position of Chair and ask you a question that has been worrying me throughout…. I am wondering whether much of the supply of talent is being hoovered up by the big companies and whether much of the innovation in smaller companies is being swallowed up by takeovers or buy-outs of innovative companies. Is there a problem with the structure of the technology industry, dominated as it is by the big five, Google, Facebook, Apple and so on?”
This is a huge, multi-faceted question: individual privacy rights; national security; state aid and state promotion, aggressive tax avoidance and competition all come into play. These companies also have complex allegiances that span many borders (Apple’s market value was recently estimated to exceed the GDP of 183 out of the 199 countries for which the World Bank has GDP data).
In response Anthony Walker pointed out that “competition is fundamental to the sector. It is vital that competition authorities pay close attention to what is happening across the sector and understand the way it works. If they are identifying problems, it is absolutely right that they should address them”.
Anything that reduces competitiveness is, by its nature, anti-competitive. The internet giants have huge resources and they “walk the floor” of Westminster in a way that most other companies cannot. Politicians and civil servants alike are in thrall to their Silicon Valley allure. There is a very real risk that the playing field will skew, if it hasn’t already.
The US federal government has a long-standing preference for awarding contracts to US companies, and our own Government’s recent Industrial Strategy White Paper is very clear on the power of procurement: “Our investments in infrastructure, and our decisions on procurement, are among the government’s most significant interventions in the economy”.
Russ Shaw couldn’t have put it better when he said “the tech sector is united behind maintaining London’s and the UK’s position as a globally significant tech hub and tech nation. We have a critical mass of entrepreneurs, investors and leaders at the ready to get behind negotiations that support this vital industry. It is the fastest-growing industry in the economy and we want to ensure its future success”.
I completely agree with Anthony and Russ. We need clarity, competition and growth. The UK needs its digital industry to flourish and be a global leader. We now need Government to end its love affair with the US giants, get behind its digital industry, and use its purchasing power to support and nurture UK digital businesses.
This means following the US’s lead, and for Government to put the UK first: investing in UK businesses; in turn developing the deep digital skills that the nation needs (rather than “digital skills” based training that is solely focussed on proprietary technology); creating jobs and wealth, and generating revenue for the exchequer.
It’s time for change, and for Government to make its technology procurement a force for economic good, if we want a strong technology Industry after Brexit.
Written by Simon Hansford, CEO
Credit for footage: Parliament TV