Three Big Ideas #17
Estonian e-fficiency, division of labels, and the real cost of congestion
Welcome to our weekly Three Big Ideas roundup, in which we serve up a curated selection of ideas (and our takes on them) in entrepreneurship, innovation, science and technology, handpicked by the team.
💾 Philip Salter, Founder
According to the Government’s State of Digital Government Review, the public sector spends £26 billion annually on digital technology, yet nearly half of central government and NHS services still rely on paper forms and manual processes.
In the past decade, satisfaction with public services in the UK has dropped from 79% to 68% – well below private sector benchmarks. The report states: “Many UK public services still rely on phone calls, emails, letters, and in-person visits. HMRC, for example, handles 100,000 daily calls, the DVLA processes 45,000 letters every day, and Defra manages over 500 services accessed via paper-based forms.” Someone moving home must contact ten separate organisations, while managing a long-term condition or disability requires interactions with more than 40 services across nine different organisations.
Critical public services still rely on decades-old technology, with 28% of central government IT systems classified as legacy. Some police forces and NHS trusts operate with up to 70% legacy technology, posing significant cybersecurity risks and potential outages.
It doesn’t need to be like this. The report mentions Estonia in passing, which offers an online option for 99% of its services. As I wrote alongside Kirsty Innes in our essay on building a digital state for our Way of the Future collection, the future of government services shouldn’t be only about moving forms online; we need to copy the likes of Estonia and Singapore which automatically provide services to citizens instead of requiring them to apply.
🦾 Anastasia Bektimirova, Head of Science and Technology
Last week, I was at Phoenix Court to listen to their Co-Founder and Managing Partner Saul Klein and Bloomberg columnist Parmy Olson discuss her award-winning new book – Supremacy: AI, ChatGPT and the race that will change the world.
“We laud science but pretend industry is dirty,” Saul observed, drawing a contrast between British and American cultures. He then compared Demis Hassabis, CEO and Co-Founder of DeepMind, who recently won a Nobel Prize in Chemistry for AI-driven protein structure prediction, to Sam Altman, CEO and Co-Founder of OpenAI. While Demis is celebrated as a scientist, Saul explained, Sam is viewed as an industrialist. Where the UK is fidgeting with a degree of discomfort around the cult of the entrepreneur, the US doesn’t seem to raise an eyebrow.
I find the division between a scientist and an industrialist somewhat artificial. It’s possible to embody both – untapped innovation potential lies at this intersection. What often makes an outstanding scientist is the ability to navigate science with an entrepreneurial mindset – not necessarily driven by profit-making, but rather by an ambitious vision for impact. It just so happens that great ambitions can often lead to great rewards. As an industrialist, you strive for impact and lay the practical steps to get there. As a scientist, you make impossible things possible – bending reality to the will of ambition for impact.
When it comes to bridging the scientific and entrepreneurial worlds, I’m following ARIA’s updates with keen interest. As part of its experiment to diversify institutional models by teaming up with ‘activation partners’, it recently announced a collaboration with Fifty Years, which will launch its company creation programme in the UK to help translate breakthrough science into deep tech startups. There are more similar partnerships to come. Mechanisms like these that are breaking down the barrier between science and industry could drive the cultural shift we need.
🚦 Eamonn Ives, Research Director
Whether it’s finance or fashion or theatre, New York City leads the world in many ways. In other respects, it’s still playing catch up. One of those is road pricing for traffic – with the Big Apple only adopting it this month. In comparison, London has been charging vehicles to drive into its city centre since 2003, Stockholm likewise since 2007, and road pricing poster child Singapore has done so for nearly half a century.
Since 5 January, drivers entering a zone below 60th Street into downtown Manhattan between 5am and 9pm are now liable for a $9 fee, with higher charges for bigger vehicles like vans and trucks. Data released by the Metropolitan Transportation Authority suggests the scheme is working – with traffic already down by 8%, and increased speeds recorded across all tunnels and bridges in the affected area.
None of this should come as a surprise. Allocating resources – in this case road space, or perhaps thought of more accurately as a better guarantee of quicker, more predictable journeys – via prices is generally a far superior option to allocating them with time or other mechanisms. (For a whole list of other reasons to support road pricing in particular, read this.)
Yet while a step in the right direction, NYC’s congestion charge is far from perfect. It is not especially dynamic, in the sense that it doesn’t continually adjust to when demand – or traffic – is high or low. As Ethereum Co-Founder Vitalik Buterin explains: “Price uncertainty is better than time uncertainty (paying $10 more today is fine if you pay $10 less tomorrow, but you can’t compensate being 30 min late for a flight or meeting by being 30 min early to the next one).”
As a Londoner, my main takeaway from Manhattan’s belated embrace of road pricing is that we should think about how to improve our capital’s own scheme. Stagnating average road speeds suggest that the daily fee is currently set too low, at least during the morning and evening rush hours. New bands that apply a surge price between 7-9am and 5-7pm should be trialled. Furthermore, we should apply the spirit of congestion pricing to other aspects of London’s transport network. Adding an additional charge, for example, for tapping in and out at certain busy Underground stops which suffer from dangerously overcrowded platforms would smooth out numbers by incentivising people to use other stations.
Agglomeration is essential for successful entrepreneurship, and to maximise the amount we get in our cities, people need to be able to get around quickly. Short of building more infrastructure, the simple logic of prices may be our best tool for keeping places moving.