Three Big Ideas #37
Our accomplished commissioner, demographics and dynamism, and rising to the challenge
Welcome to our fortnightly 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
With news that Emma Jones CBE has been appointed as the new Small Business Commissioner, it’s time to return to one of my favourite questions: how can we get more expertise into the government? And, more importantly, how can we ensure they are able to deliver?
Over the years, Emma, who is a Patron of The Entrepreneurs Network, has always made the case for getting more entrepreneurs and innovators into government and public service more broadly, so it’s great to see her follow her own advice. Critically, Emma has already been involved in government, so knows how it works (and, more critically, how it doesn’t).
As Anastasia has written here before:
“Having innovative thinkers embedded in government as a norm also increases the chance of something exceptional emerging from within. When Pat McFadden outlined the idea of experts from tech companies doing “Tours of Duty”, it might have been interpreted as if no innovator had set foot in Whitehall before. This is not the case. For example, such individuals were critical to the creation of the Vaccine Taskforce, ARIA and AI [Security] Institute – all remarkable examples of startups inside the government.”
But we can go back even further – to the much-emulated Government Digital Service (GDS), which delivered the ground-breaking (at the time) single government website GOV.UK. In the case of GDS, success was driven by a mix of technologists and entrepreneurs: Mike Bracken – a seasoned digital transformation expert; Martha Lane Fox, co-founder of Lastminute.com; and Ian Watmore, an experienced civil servant with a technology and management background.
Alongside the positives, there are also lessons to be learned in the stalling of progress at GDS. The reasons for this are up for debate, but listening to those who built it is probably the best place to start.
🎲 Eamonn Ives, Research Director
Yesterday I attended a research symposium hosted by King’s College, London’s Centre for the Study of Governance and Society and the University of Texas at Austin’s Civitas Institute. Our watchword of the day was dynamism, and specifically how we can get more of it. As well as the usual (yet always critical) discussions about specific regulations that restrict businesses from innovating or high marginal tax rates that disincentivise risk-taking, attendees were also keen to probe some of the more ‘societal’ explanations for why dynamism may have stalled in the United Kingdom.
Executive Director of the Institute of Economic Affairs Tom Clougherty raised the point that our society is slowly but steadily getting older on average, and asked whether this translates into a politics that places more emphasis on stability than dynamism. I am minded to believe it does – one only has to think about recent debates over whether institutional investors like pension funds should be able to skew their allocations towards riskier but potentially higher reward asset classes such as venture capital to see this in action. Moreover, as Britain gets older, the state mechanically has to call upon a relatively smaller labour force to pay for more retirees, for a longer period of time – which necessitates higher taxes. And last but not least, I’d happily wager that age strongly correlates with plenty of forms of NIMBYism, perhaps the most pernicious enemy to a dynamic economy.
From increasing immigration to making it easier for families to form and have more children, there is no shortage of levers the government could pull on to try to make the country more youthful. While results won’t be instant, an interesting consequence may be that we become more comfortable with dynamism. Though that may trade-off some stability in the short term, if it means our economy is better equipped to adapt to a rapidly changing world, we may just find that dynamism and security are not as mutually exclusive as many might assume.
🥇 Anastasia Bektimirova, Head of Science and Technology
While most R&D flows through traditional grants, there are other funding mechanisms that work very differently. One of them is challenge prizes. For example, the Vesuvius Challenge offered $700,000 to anyone who could use AI to read ancient scrolls carbonised by Mount Vesuvius, and within months, a team of students had cracked 2,000-year-old texts that had been unreadable for centuries.
The efficacy of challenge prizes was a subject of discussion with two former DARPA directors during last week’s as ever insightful House of Lords Science and Technology Committee session. When asked about DARPA’s famous challenges, Dr Stefanie Tompkins highlighted the multiplication effect: “you have put down a $50,000 prize and you have a whole mass of other people each putting in $500,000 to win it. The multiplication is quite powerful.” DARPA’s 2004 autonomous vehicle challenge appeared to be a failure when no team finished more than 5% of the desert course, yet Stanford alone spent over $3 million chasing a $2 million prize, and the ripple effects include companies from Waymo to the countless startups.
A takeaway from the session is that challenges work as accelerators, not substitutes. As Dr Arati Prabhakar said: “challenges are, in my view, a terrible way to fund the underlying research.” She used the autonomous vehicle example to illustrate: “The self-driving car challenge was not how the AI for image recognition was developed, but that was key to that success. That research had to be funded.” Challenges excel as accelerators when the underlying science exists but application remains elusive, and when there are clear success criteria but multiple solution pathways. For example, DARPA’s AI Cyber Challenge asks whether humans partnered with AI can better defend against cyber threats, with Google, Microsoft, OpenAI, and Anthropic donating access to their latest models because they share the problem and want the solutions.
The multiplication effect runs deeper than just private investment. Challenges compress innovation timelines from decades to years through focused urgency. This urgency creates breakthrough thinking and lasting networks of innovators. Challenge alumni can go on to found companies, launch university programmes, and recruit from their competition networks. The result is an ecosystem effect where a relatively small initial investment can create compounding value for years.
But timing matters enormously. Both Dr Tomkins and Dr Parbhakar stressed that challenges fail when problems need sustained basic research or patient infrastructure investment, or tolerance for highly uncertain outcomes. They succeed when speed takes priority and when demonstration creates a validated proof-of-concept that reduces risk for follow-on funding. As Dr Prabhakar said, a key question is: “if you did it, would it lead to something that had outsized impact?”