Politicians should drop their obsession with Silicon Valley
Successive British politicians have reached for Silicon Valley – or the idea of Silicon Valley – every time they’ve wanted to project a vision of the future.
In 2010 David Cameron set out plans to turn East London into “a world-leading tech city to rival Silicon Valley.” Seven years later, Theresa May’s government was still flogging “plans for the UK’s Silicon Valley” and she was followed by Boris Johnson and his vision to “shake up the Treasury with a Silicon Valley approach.” Even Liz Truss found time to declare in 2022 that “we can create the British version of Silicon Valley” and Rishi Sunak – who actually knew a thing or two about the Californian tech scene – insisted various parts of the UK were “set to become the UK’s Silicon Valley.”
Now it’s the turn of Rachel Reeves to make the case with an extra shot of ambition as she unveiled plans for “Europe’s Silicon Valley” in the Oxford-Cambridge corridor.
Expanding the cities of Oxford and Cambridge is a great idea, long overdue, and the scheme will bring many benefits. However, a rival to Silicon Valley is unlikely to be among them.
The UK has many advantages (the Chancellor is right about that) including great universities, world-leading research and innovation, smart (for the most part) regulation and a gold-standard legal system but trying to play catch up with the Californian tech/investor ecosystem is a fool’s errand.
Serendipity Capital, a VC firm that has backed several advanced tech start-ups in the UK, said yesterday that while the idea of an Oxford-Cambridge growth corridor is welcome, “infrastructure is not enough.” They added: “Meaningful progress demands reducing regulatory barriers, providing coordinated government support, and building confidence among investors, founders, and top talent.”
Other investors I spoke to yesterday were more emphatic, with several pointing out that the UK will never have access to anything like sufficient capital (private or state) to scale-up and take on the dominant hubs in the US and China, with some noting that India will likely get there before us.
Several pointed out that the UK also lacks the risk culture that drives growth in America.
But this doesn’t leave the UK out in the cold, far from it, we just need to play to our existing strengths in areas such as life sciences, advanced manufacturing and yes – financial services, particularly fintech.
The lure of our own Silicon Valley has beguiled politicians for decades, but we should be aiming to create rather than emulate.