Over the last 30 years innovation and entrepreneurship have become increasingly prominent concerns for successive UK governments. And yet our record is mixed, to say the least. The economist David Storey has calculated that we spend about £8bn a year supporting small firms in the UK. Having spent this money we should be asking: where are our Googles?
Innovation is often seen as originating from university research, which then migrates into start-ups incubated in science parks, before moving out into the wider world. There is also financial support to create geographically concentrated ‘clusters’ of networked, innovative small firms. But how many new global firms has the UK produced in recent years? A handful perhaps, ARM, Imagination Technologies, CSR, and the recently acquired DeepMind and Natural Motion are all excellent firms, but not yet at the level of Google, Apple or Cisco.
This is not just a British problem. In Europe and the US it is probably fair to say that there is not a single example of a successful cluster that has been created by government intervention.