Three Big Ideas #21
Neidle the point, biotech's DeepSeek moment, and eco's razor
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.
💷 Eamonn Ives, Research Director
Though the upstart political party Reform can count the number of MPs they have on one hand, it’s fair to say that they punch above their weight – and that Westminster should take seriously the things they have to say. On Monday, Rupert Lowe MP tore into Britain’s VAT threshold. He declared that it needs to be doubled, at a minimum, to £180,000 – to stop it “suffocating British small business” and “strangling growth.”
While I’m heartened to hear any MP stand up for the private sector, I’m not sure the diagnosis is completely accurate, nor the medicine quite right either.
It is true that the VAT threshold causes some businesses to curtail economic activity. Tax guru Dan Neidle recently estimated that perhaps 26,000 companies in the UK are stalling their growth so as not to hit the threshold. In tangible terms, this might be contractors not taking on jobs or tradespeople not hiring more labour. Altogether, it adds up to a major squandering of economic potential, missed tax receipts for the Treasury, and higher unemployment than the case might be otherwise.
That being said, a VAT threshold ultimately has to be set somewhere – whether that’s £90,000, £180,000, £1 million, or even £0. Currently, the UK has the highest VAT threshold in the world, more than twice as high as the EU and OECD average. Wherever it is set, a cliff-edge will be created, and economic activity will inevitably bunch just below it. We should come to terms with this reality, reduce the threshold and then use the extra revenues to reduce even more damaging taxes. (VATs are a pretty good – or, if you prefer, at least less bad – way of raising money to fund public services.)
Raising the threshold might sound like you’re doing small business a favour, but really you’d just be increasing the number of firms you coddle. Given that an estimated 3.2 million businesses currently sit under the threshold, the political logic far outweighs the economic logic of hiking it higher – but for the sake of sound finances and strong growth, don’t blame me for hoping the latter wins out.
💊 Anastasia Bektimirova, Head of Science and Technology
The pharmaceutical world just experienced its own “DeepSeek moment.” Much like DeepSeek’s emergence as an AI competitor built on leaner resources, a Chinese-developed cancer therapy recently outperformed a drug that generates $30 billion annually, sending shockwaves through the industry and demonstrating that we’re likely to see many more “DeepSeek moments” across various sectors in the coming years.
What’s noteworthy is how AI and biotech are converging. ByteDance, TikTok's parent company, has been actively recruiting computational biologists and establishing AI for Drug Design and AI for Science teams in the US. This expansion beyond social media into life sciences signals the company’s ambition to leverage its AI capabilities and vast data resources for biology, chemistry and drug discovery.
This raises important questions about national security and competitive advantage in science and technology. TikTok has confirmed that staff in China can access European user data, including from UK users. The former chief scientist at the US Food and Drug administration has warned that “they could be doing large-scale hypothesis generation with all this data, and then they could be feeding that data into Chinese pharmaceutical companies or Chinese weapons manufacturers.”
The UK has taken preliminary steps by banning TikTok from government devices following security reviews, joining many other countries amid similar concerns. But the scale of data being collected from the wider user base – data with high value for both AI and biotech development – is likely to see growing calls for more comprehensive measures.
To maintain its competitive edge in AI, biotech, and the synergy of both, the UK needs to acknowledge these parallel developments and respond accordingly. If we want to excel in critical domains, we need to significantly ramp up our game. A new report from the Tony Blair Institute A New National Purpose: Accelerating UK Science in the Age of AI provides timely analysis of how the UK can become a global leader in AI-powered scientific discovery. Its recommendations on investing in AI-ready scientific datasets, software tools, and reimagining the institutional landscape are the kind of forward-thinking proposals the government should take seriously as competition intensifies.
🌳 Jessie May Green, Researcher
An essay by Dr. Jonathan Foley from 2021 did the rounds again recently. The piece, titled ‘Occam’s Razor for the Planet’ argues that simple climate solutions are often the best, so why waste time and money on complex ones? In the age of ChatGPT, NFTs and SMRs, some may consider this quite radical.
For those not familiar, Occam’s razor is a philosophical principle stating that the explanation requiring the fewest assumptions is usually correct. Here, Foley applies it to climate solutions, arguing: why pump money and resources into nuclear fusion and direct air capture, when that money and those resources could be channeled into solutions that are ready now, like wind and solar?
Yes, if R&D is successful, nuclear fusion would provide virtually limitless, clean, and safe energy with minimal waste. However, if unsuccessful, we risk losing the most precious of all things – time. As Foley writes, “Every year we wait for a promised technology is a year we pour additional billions of tons of pollution into the atmosphere, raising greenhouse gas levels even more and locking in further warming.”
The key here is don’t wait. Research into nuclear fusion and direct air capture will undoubtedly continue. While that is happening, don’t forget to be excited about the ready-to-go solutions, too. It may not be far-reaching, but addressing food waste in your local community is impactful work. It may not be sexy, but composting is just as worthy of start-ups as carbon capture and storage. For a treasure trove of inspiration, see Project Drawdown.
This is not to shun tech innovation. After all, electric vehicles and solar panels seemed nebulous at one stage. Foley merely lays down an interesting challenge to the pro-tech community, and to governments responsible for allocating resources. At what point do we give up on a technology because it is so obviously not the future? At what point do we divert resources to solutions requiring fewer assumptions?
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