Friday, 14 January 2011

Coadec Panel - Government and the Digital Economy



On Wednesday night Techhub hosted a panel discussion organised by Coadec on government and the digital economy. No doubt the video will be up somewhere soon enough, but in the meantime here's a quick summary with some thoughts.

Big Apple, Big Smoke, Big Taxes
Several perennial issues came up such as taxation and shortages of skilled labour. More interestingly, the debate moved from the endlessly rehashed Europe vs The Valley to London vs New York, which is a much more useful comparison.  Looking at the east coast of the US we can probably pick up a few tips on how startups and tech firms can compete for labour with the finance sector. On the subject of New York, Sean Senton-Rogers of PROfounders Capital noted that once you take into account all the relevant taxes, startups actually pay more tax in New York than London. Similarly it was mentioned that Dublin's low corporate tax doesn't really make much difference to startups (and presumably is done to favour larger companies who are considering expanding to Europe).

Too busy to care about government
On the topic of the hastily enacted digital economy bill, Wendy Tan of Moonfruit highlighted that most startups are so focussed on minding the shop (quite sensibly) that they don't have time to consider government policy making. This is a particular problem when their interests may not be aligned with those with more lobbying firepower. Tory MP David Davis suggested that this doesn't mean that startups should get together to hire expensive lobbyists, but rather that they need to become more effective communicators. I'd be curious to see how this is handled in the US - can early stage startups abdicate this responsibility to VCs and grown-up startups like Google? Sean suggested that individual VC firms could do more, rather than relying on the BVCA, although one would assume government lobbying is one of the main reasons for the BVCA's existence.

The opposite of Dr Beeching
Regarding the thorny topic of net neutrality, David Davis made the observation that were we to have huge oversupply of broadband, we could make it a moot point. A few tweeters wondered how this could be reconciled with small government, but I'm not sure this is a huge issue. There's a big difference between governmental nudges to push infrastructure in the right direction and wholesale nationalisation as suggested by someone in the audience. If the marginal cost of increased bandwidth is relatively low, then this doesn't seem like a bad idea, although it carries the risk of the overcapacity being rendered obsolete by new innovations.

Politics 101
It was good to see two MPs that seemed to have a decent handle on tech affairs, and they made the point that if you want politicians to educate themselves on an issue, then the best way to do that is to make it an election issue. This presumably is the House of Commons equivalent of the classic schoolboy "Sir, will this be on the exam?"

Focus, Daniel-San
Overall a worthwhile way to spend a few hours, with a good turnout. The panel was probably a little too large to allow for proper discussion, but I'd be hard pushed to say who should have been dropped. Perhaps an event more focussed on a single issue might be an option for any future sessions.

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