You know who deserves more help from Startup investors, say policy wonks

It's almost like nobody's heard of Innovate UK

A Google-backed think tank report has called on to, erm, help the local tech startup scene flourish in a post-Brexit Britain by agreeing to underwrite a newbie business' first customer contract.

"Too little attention has been paid to the delivery risk taken on by the first customer of a startup," wrote policy wonks at the Institute of Public Policy Research (IPPR). "That's why to substantially accelerate the uptake of tech, there is a role for government to de-risk the decision to become the first customer, especially for B2B startups."

This was a recommendation by the "UK's leading progressive think tank" as drawn from its 12-point plan to help "London's Startup Scene Survive and Thrive in the Age of Brexit". This largely translates into insuring "up to the full contract value for the first customer in return for receiving an equity stake in the startup. If the startup failed to deliver, the scheme would pay the first customer the contract value."

As a sop to people who may question why the government should do this, they hastily tacked on: "Government would, of course, need to undertake due diligence to determine which companies should be accepted into the scheme."

Photo by Denis Makarenko / Shutterstock

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Sam Dumitriu, head of research at the Adam Smith Institute, a free market think tank very much on the opposite side of the political spectrum to the IPPR, told The Register: "This proposal boils down to: civil servants are a better judge of startups than venture capitalists."

He asserted: "Only firms with overly risky and less attractive propositions will take part in the scheme, while surer bets will avoid the scheme altogether. On the off-chance that there is a successful startup under the scheme, politicians will claim the credit, but when most fail it's taxpayers that will take up the bill. The likelihood is we will all be taking on large liabilities while getting next-to-worthless equity in return."

The most notable of the other dozen points proposed by the IPPR included: a proposal to put the Cabinet Office in charge of the government's Digital Charter; devolving government funding allocation decisions for tech startups to regional bodies; and extending the exceptional talent visa scheme.

The scheme was proposed in the IPPR's report titled Charting a course for the future, in which the wonks interviewed digital London types, government special advisers (unelected folk appointed by MPs) and a couple of MPs too, Google, and the usual talking-shop types from places such as Tech UK – and oddly named DIY gadgetry edtech shop "Tech will save us".

The IPPR report did speak some sense about the overinflated egos of some in the tech industry:

Tech is sometimes described – by both insiders and outsiders – as if it's inherently different from other kinds of work ("tech is different", or "tech people are different"). This "exceptionalism" has some basis in fact but is also highly problematic. In reality tech experiences many of the same issues as other fields of enterprise, although it may experience them rather differently (e.g. its timescales are often swifter)... "Tech exceptionalism" may make it harder to get key tech messages across; for example, it may inhibit open dialogue on issues such as the ethics of tech, applications of AI, and the proper role of government.

The IPPR also thanked Google UK "for their support of this project".

The latest report is a variation of a theme: IPPR wrote a separate paper in 2012 about how the country needed a British Investment Bank. Clearly, it thinks that problem hasn't gone away - and with Brexit, the EU Investment Bank's pots of gold will probably no longer be available within the UK.

Who in the vulture capitalist of the start-up communities wouldn't want profits to be privatised and debts nationalised? ®

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