Last week the National Venture Capital Association of the US issued an open letter to Donald Trump outlining nine key policy proposals intended to support the entrepreneurial ecosystem. This makes for fascinating reading, particularly when compared to the UK government's entrepreneurial agenda. The US letter covers such items as tax policy to encourage investment in early stage innovative businesses, implementation of a start-up visa, encouraging Federal funding of research, and partnering with startups to boost economically deprived areas.
There are some direct comparisons with the recent announcements in the Autumn Statement. The UK already has the highly successful SEIS and EIS to encourage risk investment and, in his Statement, the Chancellor announced an investment of £400m into Venture Capital to boost funding.
Innovation also featured with a £4.7bn programme for R&D funding and a review of the R&D tax credit regime. We have also seen the introduction of the Tech Nation Visa Scheme to support exceptional individuals working in the digital technology sector to work in the UK, and there has been a strong focus over the past couple of years of using tech to boost the economy across the UK with the Northern Powerhouse, City Deals and the role of the LEPs.
However the bit that I found most interesting is the assertion in the US letter that twenty years ago, US entrepreneurs received 90% of global venture capital investment, but in 2015 that had fallen to 54% and at least half of the top-ten largest VC investments each year are now outside the US. We often hear questions about how the UK compares with the USA in striving to build the tech giants of the future, but this is an indication that the world is shifting.
As more governments focus on innovation as a key to economic growth, we may see more competition between territories to attract the best and the brightest entrepreneurs and it will be interesting to see how the UK fares in this particular race.
Innovation and entrepreneurship is now a global competition. Of course, competition among nations to build innovative startups is not a bad thing. But we must recognize that this competition has already started and we are losing ground. If we fail to engage now, our leadership may soon be in jeopardy. We believe America needs to commit to a strong entrepreneurship agenda as a way to build strong economies in all areas of our country.