Ocado should remain British: It would be technical vandalism if it were sold to Amazon or another predator abroad, says ALEX BRUMMER
- Ocado is a pioneer and brings inventiveness to retail chains around the world
- Short sellers have decided that the ambition of a robotic retail platform is overhyped
- We must not forget that Ocado is a fantastic technical success story
British politicians, of all parties, are great at coming up with memorable phrases referencing our technological and manufacturing greatness.
The late great Harold Wilson invented the ‘white heat of technology’ way back in 1963.
Since then we’ve had all kinds of slogans, from Tony Blair’s ‘Cool Britannia’ to George Osborne’s ‘march of the makers’. Current Chancellor Jeremy Hunt has pledged to ‘make Britain the world’s next Silicon Valley’ and Labor leader Keir Starmer has been endlessly promoting his ‘green new deal’.
But despite the fact that Britain is home to at least four of the world’s top research universities and has the largest pull for high-tech, AI and biotech investment in Europe, poor productivity and wasteful use of the creative capacity of the land we slowly slide down. global ranking of output per capita – the wealth created by each citizen.
One of the many reasons for this happening is the extreme financing that drives our economy. It may have given us the resounding success of the City of London – British financial and professional services lead the world – but it has seriously damaged our industrial, innovative and technological capacity.
Dinky-toy colorful vans: Ocado is a pioneer of technology, software and robots, bringing its inventiveness to retail chains around the world
None of the aspirations laid out in politicians’ slick expressions have been fully realized and, if history is any guide, Starmer’s green revolution, at an expected cost of £28bn a year, will head in the same direction.
The stop-start of the UK’s largest infrastructure project, the visionary HS2 high-speed rail line linking Euston to Birmingham and the North, is a case in point.
In recent days we have seen another piece of British technology put to the sword. Short sellers of shares decided some time ago that the much-vaunted ambition of the robotic retail platform Ocado has been overhyped, causing the stock to fall into the doldrums. Yes, the company suffered a loss of £500m last year and its UK retail partnership with Marks & Spencer has so far been unsuccessful.
But we must not forget that Ocado is a fantastic technical success story.
The Customer Fulfillment Centers are sold all over the world, from darkest Peru to North America.
The revenue for Tim Steiner’s creation will come, but as with all technology platforms – Amazon being the most glaring example – it won’t just happen. It takes time.
That is why our politicians, asset managers and those who sincerely believe that the UK could be its own Silicon Valley should be very concerned about the volatile rally in Ocado stocks. It doesn’t really matter if the suitor turns out to be Amazon or someone else.
This is not a deal that should happen. Ocado’s second largest investor, fund manager Baillie Gifford, who manages the popular Scottish Mortgage Investment Trust (SMIT) and has a sizeable 12 percent stake, is already expressing concern. It argues that Ocado is ‘tapping a very large market opportunity’ and suggests that it would be a ‘terrible shame’ if one of our leading publicly traded technology companies fell into unsuitable hands given its enormous potential.
We’ve been here many times before. Sadly, despite the stilted rhetoric and recent security protections afforded by the National Security & Investment Act, our leaders have refused to acknowledge how they are marching Britain down the tech hill.
Readers of these pages will be more than familiar with the sad fate of Cambridge-based pioneer Arm Holdings, which could have been the foundation for turning the UK into a semiconductor and AI superpower.
Theresa May’s weak government presided over the marriage, making it a global orphan, while a rival, US-based Nvidia, achieved a $1 trillion valuation.
The FTSE 100 is in danger of becoming a technical wasteland following the desertions of companies such as industrial software leader Aveva, aerospace pioneer Cobham and satellite champion Inmarsat, which was sold this year to US rival Viasat.
Middle-income households in the UK might think of Ocado as the online grocer with the dinky-toy colorful vans patrolling the streets of suburbia. The truth is that it is a pioneer of technology, software and robots, bringing its inventiveness to retail chains around the world, from Kroger in the US to Casino in France and Sobeys in Canada.
It would technically be vandalism if it were sold to Amazon or some other foreign predator.