Group Chief Executive
The Sunday Telegraph
5 Feb 2018
For every failure, there are a thousand new companies ready to thrive
In The Sunday Telegraph, Nigel Wilson, Group Chief Executive points out how US and China-led global growth is showing the positive impact of the digital revolution as entrepreneurs exponentially grow their businesses.
The largely US digital pioneers were students - Steve Jobs, Bill Gates and friends who used the internet to solve student problems: listening to music; buying books and second-hand furniture; gossiping with friends and dating. They included Apple, Microsoft, Amazon, Google, eBay, Twitter and Facebook - from start-ups to titans in just a few years. No UK firm has come close, and this has to change.
As they grew older, the digital generation turned to grown-up issues: global payment systems, driverless cars, digital healthcare, buying a house or getting a mortgage. However we are just scratching the surface. Fintech, Medtech, Edtech, Agritech, Caretech and Govtech are just beginning. The smartphone is only ten years old. There will be even more amazing progress in the next ten years.
There is no shortage of entrepreneurs or money. UK company formation continues to run at a record rate. Legal & General's urban regeneration programmes in cities like Salford, Newcastle and Birmingham often include space for start-ups.
Last week I was in Cardiff, at the new Eagle Lab where we proudly partner with Barclays. This is already home to brilliant young Welsh entrepreneurs investing in Internet of Things applications and advanced manufacturing: driving Wales' economy forward. Next week I am in Newcastle and Leeds where similarly outstanding initiatives are under way.
It is easy to focus on business failures and infer that there is some kind of "crisis of capitalism". There isn't - not while smart people with smart ideas are setting up businesses every day. For every Carillion, there are a thousand new companies launching into new, exciting markets.
This brave new world is not a perfect world. Companies, like plants, need the right conditions to mature. Mainly, they need skilled people, money, and infrastructure.
The UK's universities are worldleaders at research, with great ideas and smart people. We need to foster that through initiatives like the government's UKRI. To close our productivity gap.
We also need to do better at translating pure research into commercial technology, using university spin-out funds, enlarging and consolidating them where necessary. These funds - at Oxford, Cambridge, Imperial, Newcastle, Bristol, Edinburgh and others are a fraction of their US counterparts. Our goal should be to double them in the next five years.
We know we need better technical skills in the workplace, too. Jaguar Land Rover really started motoring under Tata's ownership when it doubled its R&D budget. Growing businesses need money, but the UK has a large gap at the scale-up stage. The Treasury's Patient Capital Review was fully supported by experts including Sir Damon Buffini, Neil Woodford and Mike Lynch, and it can be implemented in full. Deploying just 0.3pc of the UK's pension savings would revolutionise growth businesses. Investment would also cement an intergenerational bond, with older people's savings enabling younger people to succeed. Legal & General, 180 years old and with £1,000 billion of funds under management, may seem light-years away from the tech start-up in Cardiff, with a smart idea. Most of our history is "dull but worthy". But we were once a coffeeshop start-up, but in the last two years have made investments in over 100 smaller UK ventures.
Odd couples can enjoy huge synergies; getting established firms to work alongside dynamic new businesses, with government encouragement, will provide us all with greater economic success and a fairer society.
It is easy to focus on business failures and infer that there is some kind of "crisis of capitalism". There isn't - not while smart people with smart ideas are setting up businesses every day.