Innovator of the Year
We’re used to looking to Silicon Valley as the place that breeds the innovative giants who shake up the way we shop or work or communicate. But in the US, the internet economy at 5.4% is actually lower than the developed nation average. The EU is higher at 5.7% and China higher still at 6.9%. But it’s the UK that is way out in front, at 12.4%. Even South Korea does not come close. In fact, with the exception of some regions in the US (San Jose to San Francisco) and conurbations (e.g. Singapore), the UK is embracing the Internet economy far more than anywhere else.
What’s more encouraging is that this adoption is going hand in hand with innovation and particularly so in some key areas. The original piece of Fintech (the ATM) is a British invention and now there is more investment in Fintech firms in the UK (over £5bn in the last few years) than in any other financial centre on the planet. Research suggests that the UK’s Fintech industry already contributes 44,000 jobs.
So the UK is good at adopting ideas and good at generating them, but what about developing those ideas in the first place? On the one hand, Britain is rated as one of the easiest countries in which to do business (World Bank Ranking: no.8). In each year, the UK sets up over 500,000 new businesses and the rate of survival is still increasing. In fact there are now 5.4million active companies in the UK, up from 4.3million 2 years ago.
Recently, the latest Global Innovation Index was published. The Index analyses factors such as human capital, R&D, infrastructure, business environment, creativity and market. Last year the UK was no.3. This year it’s no.2. Only Switzerland ranks higher. And this is isn’t simply one viewpoint – international business school Insead also ranks the UK as the second most innovative country globally.
It all looks quite rosy – the UK has the best combination of innovation, ease of business and internet adoption – and we’re the fifth largest economy in the world.
But there’s just one problem. We’re great a new ideas, excellent at seeing the future and the best at embracing the new. But we’re poor at making it all happen. We’re good at start-up but rubbish at scale-up. And the biggest problem is the conservative approach to risk capital. As some commentators put it: too many analysts, too many accountants and not enough entrepreneurs.
Perhaps it’s time that everyone focussed their creative minds on the “fin” part of fintech and built a really new funding framework. That would be a worthy New Year resolution for 2016.
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