The government could be overlooking the potential for UK regions to host hi-tech clusters in its excitement about East London’s Tech City, a report from the British Private Equity and Venture Capital Association says.
‘Tech Country’, published 19 March, is “an attempt to shift greater attention to technology clusters beyond the M25”. Using case studies from Aberdeen, Bristol, Cambridge, Manchester and the Midlands, the report makes a series of recommendations.
These include ensuring that over-regulation and red tape do not “snuff out dynamic innovative environments” and that the government thinks about the effects of policy changes on a broad scale.
Technology clusters need decades of “patient, sensible macroeconomic and industrial policymaking” if they are to emulate the successes of Silicon Valley, says the report.
“Unfortunately these timeframes do not coincide easily with short election cycles and even shorter media cycles,” it says. “As a result governments often cannot resist the temptation to tinker at a microeconomic level, or attempt to “create” clusters with grand infrastructure schemes.”
Policies developed for one industry can have unintended effects on others, and the report urges the Department for Business, Innovation and Skills to make understanding tech clusters a priority. The government must also use policy changes to “tune” existing centres, “without submitting to the temptation of grabbing headlines with grand follies in cluster creation”.
A further warning from the BVCA is against flooding the market with capital—a steady supply of private capital would be preferable. It adds that the “impasse” on essential transport links such as the HS2 rail system and the indecision over the expansion of Heathrow airport could jeopardise the country’s growth.
Finally, the report says that the importance of highly skilled workers “cannot be understated”. In order to secure their numbers, government must make changes to its immigration policy and communicate it overseas. In addition, science and technology training in UK universities needs to be expanded.