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Thursday, 6 December 2012

Want a knowledge economy in the UK? It's time for the UK government to freeze-out the dominant voices of the big guns

From Wikipedia:
Regulatory capture occurs when a regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups that dominate the industry or sector it is charged with regulating. 
In a similar vein, I am increasingly worried about the UK government's reliance on advice from global (US) tech firms in drafting public policy and initiatives for the UK.

It's a difficult relationship. On one hand we cash-in on the funding and expertise of tech giants to help our own tech economy.

On the other hand we have a proud history of innovation in technology, science and engineering that was pretty much drowned out by the US giants of the 80's and 90's (IBM, Microsoft).

Reliance on advisers linked to Google and the like is in danger of creating a culture of subservience in technology.  Building an engineering resource tailored to the demands of today's tech giants.

Moreover, initiatives like Google's Campus London are nothing more than a government-sponsored business development tool for Google.

In exchange for housing Britain's innovative tech companies, Google gets to forge links allowing it to cherry-pick the best investment opportunities.

And investment from a giant like Google isn't necessarily about growing strong, independent companies. It's about growing Google through acquisition to bolster its own portfolio and, on occasions, quell competition.

Subservience also comes in other forms. For example, a business mainly reliant on Twitter's data feed can suddenly find itself on the wrong side of Twitter's Terms and Conditions and the whole business fails, losing investors - UK tech investors included - substantial sums.

If your tech business is reliant on a parent organism then there are only three realistic outcomes: become moderately successful, be bought out, or fail.

For if the venture becomes too successful then the parent organism will pull the plug one way or another in order to retain its dominance in the space.

One reason tech giants bend over to allow third party integration with their products is that it provides low cost, risk free innovation.  Private capital funds the 3rd-party application.  If the application proves successful then the company is bought out by the lager company, if it fails the company is forgotten.

I'm sure there are benefits to the approach, but I'm also sure it leaves many innovators and investors chasing dreams.

I'm not knocking the approach in itself. But everyone, governments included, need to see through the gloss when turning to US tech giants to grow Britain's tech sector.

@JamesFirth

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