It’s a provocative question, but one I thought worth asking to David Cameron’s parliamentary private secretary, Desmond Swayne MP last week.
The MP was visiting Ilkley as a guest of our local MP, Kris Hopkins, with the aim of getting feedback from local businesses about what could be done to get the economy moving. It’s not a bad idea, as the usual way of looking at the economy is to convene a bunch of economists, then fiddle with spreadsheets and economic models until the outcome is inline with what you want. After that you just wait for a couple of years, and then engage in a bout of cursing and flinging mobile phones at the poor statistician that informs you about the real state of the economy.
But the trouble with meeting the public is that everyone has an axe to grind. “Why can’t you reduce taxes?” “Why is money being sent on oversees aid when we have unemployment at home?” “Why should I pay taxes when big companies can avoid them?” All good points, but hardly ones that Mr Swayne can present to the Prime Minister as an economic panacea!
It’s no secret that the real engine of the economy is small and medium sized businesses, ones that can exploit technological changes and grow rapidly. But as I pointed out back in 2009 in the article ‘Let a Million Flowers Bloom‘ the chasm that exists between a great idea in academia and a decent business is wide and growing wider by the day.
Governments are by nature, cautious. The initial reaction to the idea that 90% of businesses funded through any government intervention will fail produces a ration of horror – “but we can’t waste public funds” which is symptomatic of the short term reactive thinking which is endemic. It’s a Hobson’s choice for politicians, sit tight and do nothing, in which case no one can accuse you of wasting funds, and the result is a long slow economic decline. Put cash into something and have it fail, and you’ll be hung out to dry, which is why a proliferation of arm length ‘agencies’ and ‘boards’ have proliferated to take responsibility for the screw ups.
So my question to the PM via his ‘eyes & ears’ was quite simple. The UK has world class universities performing world class research, but the mechanism for commercialising this is increasingly broken, and as a result most of the economic benefit is lost to the country. So what’s the point of them?