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ALEX BRUMMER: The government needs to get its industrial policy in order

Boris Johnson’s government is all over the place on industrial policy. The capacity for indecision, obscuration and zigzag seen in the pandemic is just as pronounced when it comes to energy and technology.

Hitachi’s withdrawal from a new nuclear power plant at Wylfa, Anglesey, and the continuing threat from EDF’s plans for a super reactor at Sizewell, Suffolk, are a nightmare for Britain’s supply chain and energy security.

It is not the first time that the government has also been caught unprepared for the future of the country’s most valuable tech company: Arm Holdings, based in Cambridge.

It is not the first time that the government has also been caught unprepared for the future of the country's most valuable technology company - Arm Holdings, based in Cambridge.

It is not the first time that the government has also been caught unprepared for the future of the country’s most valuable technology company – Arm Holdings, based in Cambridge.

After only selling it five years ago when it embraced an acquisition by Masayoshi Son’s Softbank, the smart chip company is playing again with a bid from US gaming chip supplier Nvidia.

Rather than a robust response, Downing Street says it wants Arm to “continue to make a significant contribution to the UK economy.”

The idea that such dastardly language would have an impact in any way on tech billionaires like Nvidia’s Son of Jensen Huang is cloud-cuckoo land.

It’s worth remembering that when Softbank bought Arm for $ 32 billion (£ 25 billion), predicting it would become a global champion for the internet of things, the company was bigger than Nvidia.

Five years later, Arm’s stalker Nvidia is worth $ 309 billion (£ 237 billion) and Arm just $ 40 billion (£ 31 billion).

It should come as no surprise that Huang wants to get hold of Arm, which is licensing its smart chip to Apple, Qualcomm and Samsung, among others.

With more ambitious and focused ownership and management, it can be several times larger.

But the idea that the Santa Clara company has a real interest in having a headquarters in Cambridge and jobs in Britain, whatever guarantees it offers to sign up, is a fantasy.

The Silicon Valley proprietary will act like a Dyson vacuum cleaner, suctioning key personnel, intellectual property, R&D, and patents to California.

A bold government determined to make the UK a tech hub would block the deal and invoke powers under the Enterprise Act 2002.

Alternatively, it could impose strict provisions on Nvidia, set employment targets, R&D spending and limits for a brain drain that gaming pundit Huang would look back to.

If the UK doesn’t block the deal, it could well run into trouble between Washington and Beijing. Softbank would then have no choice but to let Arm float, preferably in London.

The UK has a terrible recent history of nurturing good British technology, allowing companies such as chipmaker Imagination, space company Cobham and satellite pioneer Inmarsat to slip into overseas hands.

As part of the pandemic response, the government must claim the high ground. New nuclear investments and the rescue of Arm would show determination.

It also needs a incremental increase in R&D funding and tax cuts, so the meager expenditures of 1.7 percent of output in the UK equates to at least America’s 2.7 percent.

Britain’s commercial future after Brexit depends on it.

Bird feeder

Disneyland is alive and well with online education leaders Pearson.

Chairman Sidney Taurel and the board appear to live in a parallel universe where they believe a 32.78 percent vote against the £ 7.4 million pay package for new CEO Andy Bird is an endorsement of an ‘outstanding candidate’ .

Undoubtedly, former Hollywood director Pearson will be shocked after his outrageous record of six profit warnings in seven years.

Bird is arguably the person driving Pearson’s digital future as the company is experiencing the boom in online college and school education accelerated by the pandemic.

The new boss hits the road with the anvil of shareholders anger and an unresolved bonus dispute around his neck.

Holiday wishes

The ‘rule of six’ and the prospect of further lockdowns are causing unrest across Britain about family celebrations being abandoned for Christmas and struggling retailers left with unsold stocks.

There is a more immediate concern for the humble but economically important and creative Jewish community in the UK, which is switching back to family and social gatherings for the start of the two-day Rosh Hashanah – New Year – festival that kicked off last night at dusk.

May all of our readers enjoy a healthy, safe and fulfilled year ahead of us.

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