Our tech sector could be the best in Europe, but this timid budget won’t help

Will Hutton

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A Banksy mural shows a workman chiselling an EU flag on to the side of a building in Dover.

(Luke McGregor/Bloomberg via Getty)

conomic growth in the 21st century will be driven by the adoption and commercialisation at scale of a phenomenal range of new technologies. Mastery of these is already cementing US economic growth; similar mastery of green technologies is behind China’s economic boom.

This is “creative destruction” — the evisceration of the old and the creation of the new. The challenge for Britain is to find its way to a parallel growth alchemy. It’s a challenge to which last Wednesday's budget did not rise.

The US and China have two advantages denied Britain. First, they have been able to drive through destabilising change careless of the social consequences. In China, this is because it is a totalitarian autocracy. In the US, it is the belief that the state should accept only minimal responsibility to compensate for individual hardship. Second, they have continental economies that allow fledgling enterprises to scale up into organisations of size within one economic regulatory jurisdiction. The UK has neither.

Importantly, both countries have a third arrow in their growth quiver — a sophisticated ecosystem for supplying risk capital to young innovative scale-ups and then fostering competition between them to develop innovative winners.