I’ve always tried to keep my blog apolitical, criticising politicians from all parties equally. But, given the seriousness of the rise of UKIP, I’m suspending my impartiality for a week. Why? Put simply, I believe that Nigel Farage’s party is the biggest threat to face the UK (and in particular Cambridge) tech sector for many years.
First off, I don’t seriously believe that UKIP will garner enough MPs in the 2015 election to be part of a coalition. But what it has done is to shift the debate sharply to the right in two key areas (immigration and the EU), causing the Tories to talk about curbs on the free movement of workers and set a date for an in/out EU referendum. And given that the Tories are likely to be a central part of a future coalition that is potentially very damaging.
Aside from the general business problems that limiting immigration and leaving the EU would bring, it would hit Cambridge and the startup tech scene in four distinct ways:
Many of the highly skilled individuals currently working at or building tech companies originally came from overseas to study in Cambridge. It is already more difficult to get a student visa, and making it harder will simply put off the brightest and the best, who will head elsewhere. And every clever student who goes elsewhere diminishes the wider Cambridge academic population and impacts its reputation and attractiveness to new students.
Pretty much every Cambridge startup I’ve worked with has an incredibly diverse workforce, with employees from every corner of the world. They’ve chosen to come here, or have remained after study, and helped build amazing success stories with their skills. These are incredibly sought after and mobile people – limiting entry for them to the UK will mean they simply go elsewhere.
Charles Wang, the founder of US software company Computer Associates once had a policy of only employing first or second generation immigrants in management roles. Wang himself was born in Shanghai and moved to New York when he was 8 years old. His reasoning was that immigrants had drive, entrepreneurialism and a desire to make something of themselves. Given they often arrived with nothing, they had no safety net, unlike established citizens who had never faced the dangers of real failure. Wang’s view is limited – I know plenty of driven, successful entrepreneurs from stable British families, but he has a point. Limiting immigration removes these potential entrepreneurs and the benefits they bring to their adopted country when it comes to jobs, taxes and the wider economy.
A tech cluster like Cambridge isn’t about individuals, no matter how skilled they are. It is about how they interact together and share and develop ideas, based on their own knowledge and experience. Diversity is key – if you bring together a group of people with similar backgrounds and experience you’re unlikely to get the range of ideas that comes from a wider group. Ideas play off each other and grow – take away diversity and you severely weaken the idea gene pool.
In answering my points, critics may well make one of two arguments. Firstly, that we’ll still let in the best, most skilled people – it is the jobless benefit seekers that we want to turn away. That may be true but will they want to come to a country that appears so unfriendly to outsiders? And, how do you spot the entrepreneur or Nobel Prize winning physicist to be? They could be the yet-to-be-born child of immigrants that initially came over here to work in agriculture or to escape persecution in their home country.
Secondly, people will point to the US, which has restrictive immigration policies, yet the biggest tech/entrepreneur sector in the world. The difference is that the US is a country built on immigration, with a culture that rewards risk-taking and encourages people to try again after failure. We still don’t have that attitude in the UK, and we need free radicals to act as a catalyst to help change things.
The last 20 years have seen a huge expansion in the Cambridge tech scene, driven by the combination of ideas, skills and experience of people from many different backgrounds. Cutting off or limiting the flow of entrepreneurs, workers, students and researchers from outside the UK would completely change this energy and dynamism. It would still survive, but would be weaker, more insular and less exciting. That’s why it is important to tell politicians of all parties that we want to encourage responsible immigration and EU membership to build a successful Cambridge tech sector that benefits us all.
Commentators are full of predictions that software will eat the world, with jobs, industries and traditional means to doing things swept away by the rise of technology. From automated journalism to connected cars, the claim is that we’re undergoing a transformation in how we work, live and play.
Software is revolutionising the world around us, but I’d contend that there’s a much more disruptive factor impacting our lives – the smartphone. It essentially provides an always-on, easy to use, ubiquitous interface with all of the software around us. Without it we wouldn’t be able to access the power of technology. So, rather than software eating the world, I’d pinpoint 9 ways that smartphones are making a meal of it:
Smartphones have the ability to monitor our vital signs and transmit information to doctors and medical staff in real-time. Whether it is using in-built or external, Bluetooth equipped sensors, smartphones will disrupt the health industry. Apple’s new focus on building a health ecosystem is just part of this trend, which can either be seen as a force for good or as allowing intrusive snooping on our most private moments. On the plus side patients can be monitored remotely, allowing them to remain at home rather than going into hospital for certain conditions, but confidentiality of data remains a worry. What if your insurance company could access your health data and amend your premiums accordingly?
2. Taxis and transport
Companies such as Uber and Lyft are radically changing the taxi market by removing the overhead (justified or otherwise) of traditional operators. Anyone can become a taxi driver – all they need is a car and a smartphone (which can also serve as your GPS, so you don’t need the Knowledge to direct you to the right place). This does raise potential issues about safety, vetting and insurance, hence the bitter battles being fought between traditional cab drivers and the new upstarts.
At no point in human history has so much data been available about individuals. The combination of ‘free’ services such as Google and Facebook that hoover up our personal information and preferences, with the geolocation data from a smartphone mean that companies have the ability to understand more about their consumers than ever before. The challenge for marketers is twofold – they need to ensure that they have real, informed consent from consumers when handling their private data, but at the same time have to evolve the skills to sift through this big data to deliver personalised marketing that drives engagement. The traditional model of campaigns that take months to plan and implement is rapidly going out of the window – if marketers can’t adapt they risk being sidelined by ever cleverer algorithms.
There is something impressive about a pile of cash – even if it is just one pence pieces. But carrying it around is another story. Replacing pounds and pence with the ability to tap to pay even the smallest amount with your phone promises to turn us into a cashless society. And it also removes the need for a wallet full of credit, debit or loyalty cards. All you’ll need to do is select how you want to pay on your phone and the software will handle the transfer. Could we see traditional banks and financial services companies replaced by Apple Money – or even currencies swept aside by electronic dosh? It is certainly possible, hence Apple’s move into the sector with the iPhone 6.
It may be difficult to remember, but when they began, mobile phones were for making phone calls or sending text messages (and playing Snake if you had a Nokia). Now the number of calls made and received is a fraction of before, as people move to messaging, email and free voice over IP services such as Skype. Many of us already pay more for our smartphone data plans than for calls and texts – meaning that mobile phone (and landline) operators will need to evolve new services if they are to be part of the smartphone future.
Growing up in an analogue world, toys and games were very straightforward. Now traditional toys are evolving to embrace both full on mobile gaming (think Angry Birds) and half way houses where the physical meets the virtual. Software such as Skylanders combines playing pieces containing electronic chips with fully fledged games to give a radically new experience. And this is just the beginning. As immersive technologies such as Google Glass and Oculus Rift gain traction we’ll find it difficult to tell reality and gaming apart. How long before people embed chips in themselves to become part of the latest smartphone game?
Buying power is a necessary evil – and the battery life of smartphones does mean we’ll always need electricity to recharge them. Mobile devices, combined with sensors and the Internet of Things provide the ability to monitor and adjust how we use power. From turning smart thermostats up or down, to only switching on lights when the smartphone user is in the vicinity, they can change energy use. Taken a step further, consumers could cut out the energy company and use their smartphone to buy power directly from smaller producers, adding flexibility and potentially bringing down prices.
The problem with insurance premiums is that they are based on averages, rather than knowledge of your individual circumstances. The data within a smartphone, either directly monitoring your movements, or linked to a sensor in your car, provides a deeper context around your behaviour and habits. Used properly this can help better judge the risks of insuring individuals – but again used incorrectly it will cause a privacy backlash.
9. Pub quizzes
As a Trivial Pursuit expert (and part of the reigning village quiz team champions) there’s nothing I like better than the chance to show off my knowledge. But how can pub quizzes survive in an era when Wikipedia can be accessed from your smartphone in milliseconds? Short of holding quizzes in exam conditions, with no toilet breaks where people can sneak off to check answers on the internet, cheating is going to become rife, making my carefully assembled general knowledge useless.
Research shows that the majority of us access the internet more through mobile devices than traditional PCs. And 20 per cent of young American adults admit to using their smartphones during sex. We look at our phones constantly, panic if they are out of sight for a minute and feel bereaved if they are lost or stolen. If it is true that software is eating the world, the smartphone is the knife, fork and plate responsible for the repast.
The world of work has changed immeasurably over the last ten years, not just in the UK but across all developed countries. Repetitive, process driven jobs have been automated, with technology replacing paper-based workflows. In many cases this has led to a hollowing out of sectors and companies, with the remaining workforce split between menial roles and higher level management.
And these changes are accelerating. A report in The Economist points to new technological disruption in the workplace, driven by computers getting cleverer and becoming self-learning. Lightweight sensors, more powerful cameras, cloud computing, the Internet of Things, big data and advances in processing power are all contributing to helping computers do brain work. Innovations such as driverless cars and household robots don’t require human intervention to operate, and can do more than traditional machines.
Research from Oxford University suggests that 47% of today’s jobs could be automated within the next 20 years. Many of these roles are in previously ‘safe’ middle class professions such as accountancy, the law and even journalism.
So, this begs two questions. What skills do people need if they are going to thrive in this new world – and are we teaching them to children quickly enough?
The employees of the future will require skills that complement machine intelligence, rather than mirror it. Empathy, the ability to motivate, and being able to think outside the box will all be needed. Essentially soft skills, backed up by specialist knowledge that is based on experience that cannot be replicated by machines. Professions such as therapists, dentists, personal trainers and the clergy are all seen as being relatively safe from replacement by robots. Interestingly entrepreneurs often possess these talents, so expect them to thrive as they use technology such as the cloud to bring their innovations to market quickly.
As a knock on effect, the will be a change in the size of companies people work for. Before the Industrial Revolution most people worked either for themselves or in small organisations (the village carpenter and his apprentice for example). Industrialisation required scale, so vast mega companies grew up. These won’t disappear, but the number of people working for them will shrink dramatically as intelligent machines take over. We’ll move to a larger proportion of the population being self-employed, providing their services on a personal basis.
Looking at education, schools will also need to change. Pupils need to understand the world around them, so they have to be taught a certain number of facts and dates, but rote learning of what made the British Empire great is going to be useless for a large proportion of people’s careers. What is needed is to teach skills for learning and adapting, thinking for yourself and how to motivate and show empathy to others. Essentially, children starting school today will be going into careers that may not even exist yet – so lifelong learning and flexibility are critical.
The predictions of the havoc that technology will cause to the world of work may be overstated – just because something is technically possible, it doesn’t mean it will quickly become mass market. And governments, worried about massive social change, are likely to step in to mitigate the worst impact through legislation. But changes are coming, and we need to think more like entrepreneurs and less like machines if we’re going to thrive.
There can be a tendency in Cambridge to think that innovation ends at the city limits, and particularly that we’ve got the monopoly on tech startups in East Anglia.
Proof positive that this isn’t the case was on show last week at SyncNorwich, where more than 300 entrepreneurs, developers and members of the Norwich tech cluster talked about their diverse successes. This included market leaders such as FXhome, which produces special effects software for both Hollywood blockbusters and amateur filmmakers, Liftshare.com, the world’s most popular car sharing site and mobile interaction/payment firm Proxama. A whole host of newer startups, such as targeted mobile advertising company Kuoob, music community site SupaPass and educational software provider Wordwides (set up by a 16 year old) also talked about what they could offer.
There’s obviously been lots of activity in Norwich for quite a while (FXhome has been going for 10 years and Liftshare.com for 15), but what the evening did was give outside endorsement to the cluster. Mike Butcher from Tech Crunch came along and it gave everyone present belief that they were on the right road and that they should be shouting about it. In the days since, I’ve seen emails offering co-working spaces and there’s even a cluster name (Silicon Broads) being bandied about, along with a startup map.
Norwich isn’t the only cluster rising to prominence across Europe – the growth of cloud-based technologies, new agile development methodologies and a focus on entrepreneurship mean they are springing up everywhere. Some people see this as a bad thing – they point to the size of Silicon Valley and wonder how hundreds of disparate European cities can compete or scale. But as Butcher pointed out, the Valley has a 60 year head start and what is needed is to build bridges between the different hubs – after all takes 2 hours to drive from London to Norwich (or Cambridge), the same time to get from one end of Silicon Valley to the other.
What Europe needs to do is to use the nimbleness of having multiple centres to its advantage and turn disparateness into diversity. I’m reminded of the story of the ‘discovery’ of America. At the same time as Christopher Columbus was touting his plans around the courts of Europe, the Chinese Emperor was assembling a great fleet to explore the same area. Given the scale and backing put into the expedition it would have been likely that the first non-native settlers in the present day United States would have been Chinese, not European. However the Emperor died and his plans died with him – there was no alternative power that could take them on. In contrast Columbus, originally Genoese, travelled round Europe for years until he found a backer in the Spanish monarchy. The result? The world we know today.
So it is time that European startups (and political leaders) stopped dreaming of a single super hub that on its own can rival Silicon Valley. It’ll never happen and what we need to do is build bridges between the enormous variety of hubs across Europe. Making everyone aware of what is going on up the road (or further afield) is crucial to driving collaboration, unlocking opportunities and building a successful pan-European tech ecosystem that can break down barriers and silo working and deliver jobs and growth.
The current civil war and use of chemical weapons in Syria is destroying the lives of millions in that country. With deaths from the conflict estimated at over 100,000 and an estimated 7 million people in need of aid, it is a humanitarian disaster across the region.
But alongside the actual fighting there is an equally hard fought war going on for the hearts and minds of the rest of the world, including voters, MPs, senators and governments. Western citizens and legislators are worried about being dragged into the worsening situation in Syria through military action, despite widespread abhorrence of the use of chemical weapons on civilians and children, leading to indecision on next steps.
This has triggered a media offensive, with all sides using the power of public relations to jockey for position:
- Bashar Al Asad has appeared on CBS and PBS in the US, defending his actions and denying responsibility for the use of chemical weapons
- Barack Obama appealed to the American people through a series of TV interviews as well as a direct address calling on Congress to support his stance
- Francois Holland sought to elbow Britain from its position as the US’s most trusted ally, hawkishly supporting military action in Syria
- Vladimir Putin put his point of view to the US and world media through a comment piece published in the New York Times, setting out his plan for independent decommissioning of Syrian chemical weapons.
Whatever your views on culpability, the winners from this PR battle have been the Syrian regime and the Russian government. By coming up with an alternative proposal to military action (dismantling Syria’s chemical weapons), Vladimir Putin has moved the debate on and surprised the US government’s PR machine. Using the global media cleverly he’s been able to exploit widespread worries about the consequences of war and change the direction of discussions. A combination of message and media has essentially delivered the PR success that has met his objectives.
If diplomacy is a continuation of war by other means, then PR is demonstrating that it is a vital general in the ranks – whether you believe it is used for the right or wrong reasons.
Very few of us like paying tax, but there’s a fine line between legitimately reducing your tax bill and actively avoiding paying the tax that is due. And at a time of austerity where everyone is tightening their belts, there’s obviously a push by governments to close loopholes and maximise the revenues they receive.
Given their high profile and obvious success Starbucks and Amazon have both been the subject of widespread condemnation of their tax avoidance methods, and I’ve covered Starbucks inept PR response in a previous blog. Google was up before a House of Commons Select Committee last week (for the second time), backing up its claims that, despite revenue of £3 billion in the UK, all its advertising sales actually take place in the lower tax environment of Ireland. Google boss Eric Schmidt has countered that the company invests heavily in the UK with its profits, including spending £1 billion on a new HQ that he estimates will raise £80m per year in employment taxes and £50m in stamp duty.
Apple is the next company caught in the public spotlight, with CEO Tim Cook appearing before a US Senate committee that had accused it of ‘being among America’s largest tax avoiders’. Meanwhile, the loophole that sees Amazon and other big US ecommerce companies avoid paying local sales taxes is being challenged by a new law passing through Congress, with estimates of between $12 and $23 billion extra being collected.
Given the close links between Google and UK politicians (Ed Miliband is appearing at a Google event this week and Schmidt is expected to meet David Cameron on his current UK trip), the cynical view is that this is a lot of sound and fury, signifying nothing. But it does create an image problem for the companies involved, particularly at a time when we’re all meant to be in it together.
Obviously the most popular thing for companies to do would be to re-organise their tax affairs so that they meet the spirit as well as the letter of the law. But that’s not likely to happen given the enormous sums at stake. Instead expect increased calls for global tax reform (so that the organisations involved don’t have to operate the way they are currently ‘forced’ to) and a slew of feel good announcements that demonstrate the level of investment and support for the UK economy by the companies concerned. Being ultra cynical perhaps the whole tax situation explains the huge support by big tech companies for Tech City – it is simply an elaborate way of diverting attention from their financial affairs…………..
There’s a continual complaint that the UK simply doesn’t produce the numbers of heavyweight tech companies that the US spawns. And looking around, the pattern seems to be true – for every ARM, Sage or CSR in the UK, you could name a dozen similar size companies in the US.
While some of this is gap is obviously down to relative population sizes are there any other factors holding back UK entrepreneurs? This was one of the issues discussed at last week’s Enterprise Tuesday event in Cambridge by an entertaining group of speakers, including company founders and Cambridge Angels, Sherry Coutu, Andy Richards, Robert Sansom and David Gill, managing director of the St John’s Innovation Centre.
The key factor is the ability to scale – the UK creates exactly the same number of startups, per capita, as the US – but only half of them successfully scale up compared to their US rivals. There are plenty of reasons for this – from an inbuilt British fear of change to an inability to cross the chasm
and appeal to the mass market. It seems that for too many UK companies the choice between scaling themselves or selling out is weighted towards the exit option. While this releases investment capital back into the system and gives entrepreneurs the chance to begin again, it has created (in the words of a US VC quoted by Andy Richards) an industrial veal farm in Cambridge, with prized startups nurtured and pampered ready for the inevitable early death/exit.
The UK in general, and Cambridge in particular, has shown that it can grow dominant tech companies, so now is the time for the government and tech ecosystem to encourage entrepreneurs to take a step back, aim higher than an early exit and build businesses that can scale. Given the UK has the ideas we need to move from farming veal calves to growing some bulls……….
There’s currently a press frenzy about the death of the printed book, driven by the rise of the tablet/iPad and Amazon’s recent announcement that it is selling more e-books than paperbacks. Commentators are beginning to prophesise rampant e-book piracy and publishers going the way of the record industry in the brave new digital world.
But if you take a closer look you’ll see we’re nowhere near a digital tipping point, particularly in the UK. While Amazon is selling more e-books on the Kindle in the US than paperbacks, the margin is not that great (105 e-books vs 100 print books). However as pointed out in PaidContent, in the UK we’re nowhere near that yet. Amazon is selling more e-books than hardbacks (by a factor of 2 to 1), but not paperbacks.
Add in that the revenue for each e-book is much lower, and you’ll see that while e-books are having an impact, digital isn’t yet reaching market dominance. The PR behind this reminds me of Amazon’s claim that more people bought e-books last Christmas Day than hard copy books – eye catching as a headline, but hardly surprising as new Kindle owners added content to their toys. How many book lovers spend Christmas buying physical items that won’t be delivered for a week at least?
I’ll admit I’m biased but I think there’s a way to go before e-books take over. Screen technology needs to improve further and usability has to take into account the mass market, rather than early adopters that are happy to fiddle with technology. So don’t believe the hype – the physical book will be alive and well for years to come.
- Sales of Kindle books outstrip print books (i-programmer.info)
- Amazon UK selling twice as many e-books as hardbacks (telegraph.co.uk)
- Amazon and Waterstones report downloads eclipsing printed book sales (guardian.co.uk)