Starmer’s ‘tax-take’ Britain will see us take a back seat in the looming tech revolution
Starmer’s tax hikes and half-baked policy aims are squeezing the last drop of entrepreneurial zeal Britain has, just as the world embarks on the greatest technological revolution for two centuries, warns billionaire tech VC and philanthropist Tej Kohli.
The Prime Minister’s refusal to rule out further tax hikes on top of those he’s already imposed is killing off investor confidence and making his ambition for the fastest growth in the G7 little more than a pipe dream.
This waning confidence comes at a time when the globe is on the cusp of the single greatest transformation in a generation. A technological revolution that will transform every aspect of our lives.
Artificial intelligence is one example. The AI industry will soon be worth $15 trillion and will grow exponentially. Script-based AI solutions, such as ChatGPT, offer a mere glimpse of the technology’s true potential.
The next major milestone is interpreting and acting upon visual data, known as spatial intelligence. AI can now understand emotions, actions and intentions and respond accordingly. This ‘sight-to-action’ technology is crucial for autonomous vehicles and the use of robots to take on everyday human activities.
The key question is what role Britain will play in this revolution. The answer hinges upon a rediscovery of the values that have brought it prosperity.
For two centuries, this country’s economic fortunes have rested upon a hunger to innovate, take risks, encourage free enterprise, embrace technology and reward success. It was these qualities that drove its industrial revolution. Indeed, it was these values that convinced me to move here in 2006 and to invest over £100m in artificial intelligence, e-sports, genomics, robotics, and biotech.
But, when I look at Britain today, I don’t see the same hunger, the same drive I once did. Many workers have become too complacent, too apathetic. They see work as merely a means to survive rather than an opportunity to thrive. Wealth creation is no longer celebrated as a mark of success, but instead viewed with suspicion.
Encourage Investment in Emerging Tech Industries
The Chancellor’s recent Budget is just one example. Scrapping the non-dom status deters wealth creators, investors, and innovators from moving to the UK, while making it harder for those already here to remain. These are the very individuals Britain needs to attract to invest in the UK’s tech sector and to enable it to leap-frog the US and China.
Instead, the Government appears transfixed on the continued expansion of the public sector.
The UK is in desperate need of investment. In 24 of the last 30 years, Britain has ranked bottom in investment among G7 countries. Without investment, businesses cannot innovate and the economy cannot grow.
In emerging tech industries, everyday I see the constraints this brings. Simple measures, however, can help the UK get ahead.
First, it’s far too difficult to get investors and top talent into the UK. The government should streamline visa processes by simplifying visa requirements for investors and skilled professionals to enable them to move to the UK and bolster industries led by technology.
Offering targeted tax breaks for companies investing in emerging technologies would also help. Enhanced research and development tax credits can encourage innovation, while capital gains tax relief for investors can attract funding into these sectors.
Too many of the best minds at Britain’s universities remain stuck in academia rather than translating their knowledge and understanding into practical ideas and innovations that will change our world and drive our economy. Creating incentives for businesses to partner with universities, offering funding for research tied directly to commercial applications, while establishing paid internships, co-op programs and startup incubators to funnel top graduates into industry roles will make a big difference.
When I look at Britain today, I don’t see the same hunger, the same drive I once did. Many workers have become too complacent, too apathetic
We should also expand digital and entrepreneurial skills development in schools and universities. Creating pathways for students to transition directly into industry with government-backed tech apprenticeships and training programs is one avenue.
Also essential for a successful tech industry is infrastructure that invites novelty and progress. The government should provide more funding for training facilities, events, and hubs across the UK. It should also support grassroots initiatives to develop homegrown talent and position the UK as a global tech innovation hub. We must emulate Station F in Paris, a unique campus and incubator community with 1,000 startups, and programs to teach and train entrepreneurs and their teams.
The government must also expand its existing enterprise zones that offer reduced regulatory burdens and financial incentives for tech startups.
Lastly, funding is crucial. Establishing public-private investment funds to support high-potential tech companies and simplifying access to financing for startups through grants, venture capital partnerships, and loan schemes would go a long way to realising the investment that emerging industries and the British economy urgently needs.
These measures would go some way to attract foreign capital, retain top domestic talent, and accelerate the UK’s position as a leader in emerging technologies and go some way to achieving the lofty ambition of the fastest growth in the G7.
Britain can still play a key part in the massive tech revolution that is sweeping the globe and that will shape at least the next two centuries, but to do so it needs to create an environment that welcomes investment and doesn’t drive it away. Taxing our way to prosperity has never worked. Instead, we need a bold approach that signals to the world that Britain is open for business.
Tej Kohli is an investor and philanthropist