Three Big Ideas #54
Institutional bloat, the nature of national security, and work from home truths
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.
🧑💻 Eamonn Ives, Research Director
Nigel Farage has built his political career on making blunt, plain-spoken interventions. His latest — a promise to end Britain’s “work from home culture” if he becomes Prime Minister — certainly fits the mould. Speaking in Birmingham on Monday, Farage argued that people are more productive when labouring alongside one another. As someone who enjoys the routine of working among colleagues in my office, I have a vested interest in wanting to agree with him. But what do the hard data say?
Unfortunately, it’s a question that’s remarkably hard to answer conclusively. Much of the existing research suffers from weak methodologies (such as relying on self-reporting), small sample sizes, or findings applicable to only very specific industries. Even so, the balance of evidence suggests that the productivity impact of remote working is probably positive, or, at the very least, not meaningfully negative.
That should not come as a shock. As any student of Adam Smith will recall, the division of labour — a central driver of productivity growth — is limited by the extent of the market. By embracing remote working, firms effectively expand their potential labour pool from the local to the national (or even international). That gives employers access to a much wider range of talent, and a better chance of matching the right worker to the right task.
Other evidence suggests the declining importance of people working physically close to one another for economic growth. Writing for us in 2020, Matt Clancy pointed out how there has been a steady increase in the percentage of scientific articles published that are co-authored by academics from different institutions. In a similar vein, he also presented evidence of the growing geographic distance between inventors listed on the same patent. Insights like these suggest that physical proximity is becoming less central to collaboration than it once was — and that the ties which bind productive teams are increasingly intellectual rather than geographical.
Farage is right that Britain’s labour productivity is lower than it should be. The more our political elite focus on it as an economic indicator in need of improvement the better. But his diagnosis — and less so his prescription — misses the mark. Nostalgia for a pre-pandemic office culture may well win a few votes, but it won’t necessarily usher in a wave of productivity growth.
🏛️ Mann Virdee, Senior Researcher
There’s a simplicity to the principle ‘less is more’. Many organisations, however, gravitate towards the opposite.
Take, for example, the UK’s Office for Investment — a one-stop shop or ‘concierge service’ for dealing with Foreign Direct Investment. There’s a simplicity to that. It says to foreign investors: “if you want to engage with the UK on inward investment, just go to the Office for Investment.”
Well it might not surprise you to learn that the Government decided to put another layer on top of that with the creation of the Office for Investment: Financial Services. That seems like a good idea in principle — we obviously want to be attracting investment in Financial Services. But what about the life sciences, or quantum, or other frontier technologies? Why don’t they get their own entities in the Office for Investment? Perhaps in time they will — although then an investor looking to engage with the UK on, say, the life sciences will have to go through the trouble of figuring out whether they should be dealing with the Office for Life Sciences or the Office for Investment: Life Sciences, or one of many other bodies.
This chimes with a piece I read recently by Martha Dacombe. Government often lacks the imagination and politicians often lack the incentives to think beyond reorganisation. It’s as if the government is a carpenter with a single tool in their toolbox, and believes all problems can be solved with the same approach: the creation of a new entity, the publication of a new strategy, or a reshuffling of priorities. It confuses the means with the ends.
Incentives are a tricky problem to overcome. Which politician wants to spend time tackling tangled ecosystems when it’s far easier and politically beneficial to announce Another New Thing?
It’s time we re-evaluate how and why we set up new organisations, and work clearly with the outcome in mind. Organisations benefit from well-defined and focused missions. They should be frequently revisited to prevent unintended mission creep. Other organisations may benefit from sunset clauses requiring them to disband once they have achieved a clearly defined objective. Politicians should not underestimate the political rewards they could reap (and trust they could gain) by closing down entities that have achieved their goals instead of announcing the creation of new, poorly defined ones.
⚡ Jessie May Green, Events and APPG for Entrepreneurship Coordinator
Last month, the Government finally released its national security assessment on global biodiversity loss and ecosystem collapse, to a relatively hushed response from the national press. Indeed, how do you break the news that every critical ecosystem globally is on a pathway to collapse, posing a high risk to our national security and prosperity?
The assessment revealed that the UK could be left unable to feed itself if we don’t see major intervention to reverse current trends. Ecosystem degradation risks geopolitical competition for food, and with the UK reliant on imports for both food and fertiliser, that puts us in a precarious position.
To draw attention to this, some are calling on the Government to stage a prime-time televised emergency briefing across all the main channels à la the recent National Emergency Briefing, during which Lieutenant General Richard Edward Nugee said:
“If we do treat this [the climate and nature crisis] as the security challenge it is, the solutions make us stronger. We end up with more secure energy, more resilient infrastructure and a safer, more stable society. And important to me and, I hope, to you, a stronger democracy.”
This is a lesson in giving due weight to the challenge without being fatalistic. Humankind has shown its ability to invent its way out of problems before, and it can again. Now more than ever, we have the knowledge and tools available to restore our ecosystems and optimise our food systems. The assessment names some potential technological solutions — regenerative agriculture, lab-grown protein, insect protein, AI — but only time and experimentation will tell if these can be scaled to effect.