Election 2015: Labour's retro economic policies would damage Britain's economic recovery
My heritage is labour. I grew up in Northern Pennsylvania in the heart of industrial America. My father worked in a precision metals factory when I was born. With five children under the age of seven, it was difficult to make ends meet and with the help of a loan from the US Small Business Administration, he started a business in the basement of our family home where he worked nights and weekends and began the journey of a family to a brighter future.
My father, like everyone else we knew at the time, was a member of a union. Unfortunately, Union and company rules forbade 'moonlighting' or making money plying your trade outside of business hours. And so, when one day it was discovered that my father had started a small business, he was fired and, for nearly a year, earned nothing. Without a generous social welfare system, such as the one we have in the UK, he had no option but to make his business work.
Losing his job was the proverbial entrepreneurial catalyst. A 'do or die' moment for our family. It was a long road to success for us, with many trying times. During the sixties and seventies the world wrestled with economic transformation and away from traditional industries much like the structural changes happening today. When I finished university, I knew the world I grew up in was disappearing and I had to find a profession for the future. I chose a nascent technology field that was turning analogue machines into digital, which was, fortunately for me, the beginning of the most important revolution in our lifetime.
I graduated with my first degree in 1984, in the midst of a deep recession. I took an unpaid internship to prove myself in the hope that something would open up. When I joined my first start-up company in 1986 and as a graduate business student, I arranged my classes to be in the evenings so I could work full-time. The company was quickly acquired and with a fresh MBA and a bit of money from my stock options, I made my way to Silicon Valley.
When I opened the first 'international office' for a Silicon Valley company in 1990, we chose the UK, not just because of a common language but because the country had the most friendly business environment in Europe. But what struck me then was that in some ways, Britain was still stuck in the old economy.
Since then I have had the great fortune to build many great products and companies and to participate in three acquisitions and four IPOs, which has given me great perspective. I believe that in times of great change, while it is instinctive to cling to the past, you must embrace the future wholeheartedly. What is as clear today as it was then is that there is no going back. The forces of change are again moving the economy to greater prosperity, but only for those who embrace it.
The world has been transformed over the last 15 years. Industries are being disrupted and societies are unsure how to cope as both organisations and individuals find themselves unprepared. Today, the global economy has completely changed and the UK is at its forefront. Entrepreneurs like my dad can set up and sell to customers around the world almost overnight. But attitudes rooted in the Labour movement traditions that were relevant in decades gone by, prevail even today.
The retro policies Labour is proposing are concerning, because they seek to turn back the economic steps forward Britain has made as a country.
The controversy over "zero hours" contracts is a great example. It should go without saying that the exploitation of workers is never acceptable, and the current government recognised how this new form of flexible contract could be misused and then legislated to prevent this.
No company in Britain can use such contracts to bind employees to work for them exclusively. For young parents who need flexibility to care for their children, older workers who need to care for elderly relatives or students who need to balance study and work, these new contracts are ideal. And a flexible work force is key to competitiveness in 2015.
A growing business might secure a contract with a new client and, to fulfil it, they might need to take on additional workers, without knowing whether this business will be repeatable or sustainable. If the contract and arrangement proves successful, the employee will be in a position to become employed full-time. This has to be a good thing. In America, government would never dream of telling business they can't hire short-term workers, whatever the terms and conditions. It would be unheard of.
In Britain today, small businesses are flourishing in numbers never seen before and business starts are the highest in history. More and more people in the UK are charting their own path in the belief that self-determination is the most liberating force. We are a nation of innovators, creators and business builders and we cannot turn back the clock.
The statistics are overwhelming: 50% of the UK's digital companies have been formed since 2008; the digital sector accounts for seven and a half per cent of jobs (source: Tech Nation report); according to Barclay's Fast Growth Tech survey, the UK tech sector is set to grow at four times the rate of GDP. This success is reflected in the macroeconomic picture, with the UK now the fastest growing economy in the G7 as well as being a founding member of the D5 network of leading digital governments.
We now lead in fintech, the sharing economy, the internet of things, big data, ecommerce, machine learning. You name it, we are top notch. That is enormous progress and something we can be proud of.
What's most important too is the tech and digital revolution is equally empowering across the country. Last month Tech City UK released the 'Tech Nation' report, which profiled 21 unique tech clusters across the country that have sprung up around our great universities and knowledge centres, each with its own strength and unique character, reflecting the people who live and work there and their heritage. Together they employ one and a half million people across the UK.
Government did not create this. Entrepreneurs did. But what this Government did was to recognise, embrace, nurture and support them, and remove the obstacles that were stopping them from succeeding.
Innovation-friendly R&D tax incentives and the Patent Box ensure that great technology is developed right here in Britain. Programmes like the high-growth segment on the London Stock Exchange and revamped capital requirements on AIM and making AIM shares eligible for ISAs. These things have helped the fast-growing companies known as 'gazelles' build their businesses in Britain for the long term.
Britain today is recognised again as an innovation economy, and the creation of Tech City and the movement it recognised have put the UK in the driving seat of the world's digital economies. This is where things happen, where people want to live, and where they want to invest, and that is exactly what we need to be in this global economy.
We have a once-in-a-generation moment to ensure this digital revolution continues our path to prosperity and success. We can't go back to an economy where leaders talk about simplistic solutions such as taxing people more or imposing more regulation on businesses. We owe it to ourselves to continue on the path this government has set us on.
With the creation of 1000 jobs on average every day since the last election, we are approaching structural full employment and that can be achieved if we stay the course in the next parliament. The Conservatives are the only party which can say that this is their plan and credibly maintain they know how to continue it.
While it wasn't easy and the memories of the dark days of the recession are still fresh in our minds, we can't take our eye off the road to continued recovery. There is no going back.
Success and prosperity are not our enemies. Retro policies rooted in an old economy must be consigned to the past. We have a new way forward.