Opinion piece in today's Times - by Martha Lane Fox

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Created on Monday, 28 March 2011

If Britain is to create new jobs and have an “enterprise-led” recovery we must capitalise on the incredible digital base that we have created in the past 15 years.

We are already the No1 e-commerce country in the world with about 10 per cent of retail business done online — higher than in any other country — and in telecoms and broadband years of competition have opened up the market to give us very competitive pricing. We have very good broadband penetration, with about 66 per cent of homes now having good connections. We have an extraordinary public service broadcaster focused on technical innovation. The BBC iPlayer is world-class and I read recently that there were six billion views on it last year alone. Research by Google shows that technology industries contribute about £100 billion to the UK economy. That’s about 7 per cent of our GDP — nearly as much as financial services. So we have a great opportunity to build on these successes. By embedding digital thinking in more of business, more of government and more of the charitable sector, we can create a truly remarkable digital UK.

The task is how to create more digital entrepreneurs. I am often asked what we can do to ensure that we are encouraging the next wave of companies like lastminute.com that Brent Hoberman and I co- founded in 1998. I believe that three things would encourage more digital entrepreneurs and businesses.

The first is a challenge to funders: it is still hard to raise start-up finance. Not so hard if you have a proven track record or if people can see that you might be a success, but we don’t have enough angel networks. We don’t have enough individuals investing in the really early stages of ideas . Some young entrepreneurs told me recently that my own experience of raising money — two out of three investors immediately turned us down — pretty much fitted with their own experience. And that was 15 years ago.

Brent has tried to help to rectify this, by starting an angel-investing network and a venture capital fund, Profounders, but more people need to take more interest and more risks in our digital future.

The second thing is academic and commercial partnerships, something that the US does a lot better than us, with academic institutions often sitting alongside business campuses. MIT and other universities all over the US all have excellent relationships with business, whether it is Microsoft, Google or IBM. Here in the UK, we are very good at inventing but we are not so good at exploiting technology commercially. So my second challenge would be about academia and commerciality. The University of Cambridge is beginning to do this and Hermann Hauser, one of our great uncongratulated UK entrepreneurs, has put a lot of money into academic research from his microchip company, ARM. There is much to be gained from investing early in invention and therefore in interesting ideas.

The third thing is apprenticeships and encouraging young people — particularly women, of whom there are still far too few in the technology sector. I am talking about apprenticeships and internships in start-up companies and about thinking that beginning a digital business, even if it fails, is a great grounding for a career. Don’t go into a bank , don’t go into accountancy, go into a start-up. You will learn a lot more and will gain more experience. But we don’t encourage that in our young people: in education or when they leave education.

Now, as we face a million young people with the prospect of unemployment, more than ever let’s encourage them into start-ups. Let’s give the start-ups incentives to take them and let’s make sure that we create an army of young people who are inspired by start-up businesses.