Quangos have a limited shelf life: Tech Nation collapses after UK government pulls funding

Tech Nation a quango launched by David Cameron to champion the Uk’s tech sector will be shut down after the Government pulled crucial funding and will be wound down at the end of March after losing a key contract to Barclays.

Tech Nation said that as a “direct result” of the Government awarding a £12m contract to the bank it would be “ceasing all existing operations”. Many tech founders and investors had urged the government to review the decision, whilst many other tech founders and investors (who aren’t as vocal as many of the usual suspect self appointed ecosystem spokespeople) that are loudly urging the government to review the decision) the more low key founders and investors aren’t surprised at all as they felt that Tech Nation has limited, if any tangible impact these days.

Meh. ?

Quangos don’t do much anyway.

They start well, but each year spend 20% less time doing meaningful shit and 20% more time trying to justify their existence/maintain funding.

– Slow, consensus made decisions
– Too many civil servants/consultants.
– Tied up in red tape pic.twitter.com/COEa7FMhdw

— Henry Joseph-Grant (@speirin) January 31, 2023

Personally, I would sit in the latter. I have had various interactions with Tech Nation over the years, most very positive in their earlier days, when they did great work e.g tech visa’s etc. I’ve also met man great people who have been involved or worked for them, many of whom told me they felt their soul was being destroyed by Tech Nations slow decision making, politics and red tape.

In 2018 I also got to look under the hood at how Tech Nation works, when a head hunter wanted me to interview with them to head up operations outside of London. I was very reluctant as I build startups, so I’m incentivised by ownership and obviously that wouldn’t have been part of the equation with the role, speaking with VC’s, CEO’s and Journalists who had directly worked with Tech Nation and even people who had been board members, all warned me against even considering the role, because they felt that Tech Nation wasn’t fit for purpose and didn’t have anywhere near the level of impact which it had potential to, because of political ducking and diving and not taking any risks.

However the head hunter was very good and she convinced me to interview with them and whilst they were nice people, the hiring process highlighted everything I’d been pre warned against, no ownership, multiple decision makers who only made decisions, painfully slow and by consensus. After literally around 8 hours of interviews with multiple people and by the time I was invited back to interview with Tech Nation’s CEO Gerard Grech, I was totally unimpressed and exhausted by them and their broken hiring process, I met with Gerard anyway and he’s a super interesting and nice guy, but you could tell blatantly that he had an almost impossible job to lead an organisation which has immense importance, but is handcuffed by red tape.

It was also very clear that the organisation had far too many civil servants and consultants to ever really be fit for purpose. Which for an organisation which really should be a driving force for innovation, is the equivalent of Man City or Arsenal having an ex Dodgeball people as their manager and coaches. It makes no sense to have those who have never innovated to be strategising how to help or champion those who are innovating.

In my opinion most government funded Quangos start out very well, achieving great things, Tech Nation is a great example of this with the work they did with Tech Visas early on, but every year Quangos spend 20% less time doing meaningful and impactful work and 20% more time frantically trying to justify their existence and maintain funding.

So they become more about maintaining their teams jobs, than really fulfilling their potential, Quangos simply have a shelf life and should be shut down every 5 years maximum, otherwise they go stale and the money which funds them could be better spent by DCMS and Department for Trade and Industry on other things, such as directly funding more early stage startups and by that I mean not through tier 3 VC funds or failing regional Quangos.

Tech Nation’s staff will undergo a redundancy process, although there is a hope some roles directly involved in the contract, the Digital Growth Grant, could be transferred to Barclays.

The group employs 70 people, who have been put at risk of redundancy. Tech Nation said 48 were involved in the Government contract and it had entered talks with Barclays about transferring some of the jobs. I empathise with all those who are losing their job, but I’m far from surprised.

Tech Nation ran a network and events, which were largely free, aimed at connecting founders to talent and investors. The group said that with the loss of the Government’s grant funding its “remaining activities are not viable on a standalone basis”.

Last year, it was reported that the Government was planning to provide funding to Barclays’ Eagle Labs programme, rather than to Tech Nation. Transferring government funding to a private multibillion dollar bank isn’t exactly a good idea, because what is their tangible goal of success, revenue and fluffy PR for their brand or doing meaningful things? I mean that doesn’t take a genius to work out, we’ve seen it before with Entrepreneurial Spark and Natwest which was fluffy PR for the bank and used as a nauseous inducing personal branding platform for select MBE hunters.

Tech Nation also runs a visa programme for the Home Office, which tries to link up high value international talent to UK tech businesses and fast tracks their approval. The non-profit said it had informed the Home Office it would be ceasing all operations and wind down its role in the programme by the end of March.

While some in the tech sector have questioned the impact of its programmes, the failure of Tech Nation is expected to prompt fresh questions over the Government’s strategy and approach to tech businesses. I’m no fan of the UK government, but clearly at a time of global economic uncertainty and huge disruption to jobs by AI etc, the UK needs to have it’s shit in order, pronto.

I’m currently building a startup in Belfast, Northern Ireland and I have directly experienced the failures of other Quangos such as Invest NI, who are funded by DT&I to focus on both FDI and Indigenous startups, which are obviously totally conflicting goals and reminiscent to Tech Nation there are all the same issues, slow, consensus driven decision making and very narrow, if any tangible impact.

I think Northern Ireland and the UK should take a look at Ireland and it’s quangos, whilst the IDA and Enterprise Ireland have many critics and are in no way perfect, at least they have very clear remits, IDA focusses on FDI, EI focusses on indigenous startups and in my experience have so much more impact and create more value to Irish founders than anything in the North or across the water. My startup is based in Belfast and I’ve never spoke to anyone or had any help from Invest NI, not even as much as had the national press we’ve already had shared by anyone working for them. That’s something that most founders I meet have told me they experience, yet these quangos will always pop up when there is a photo opportunity with FDI companies announcing jobs (many of which are low skilled or never actually happen) which could get them some political brownie points, Quangos are essentially self serving goal hangers.

Jeremy Hunt, the Chancellor, has pledged to build a new Silicon Valley in the UK, but Tech Nation lashed out at those ambitions in a statement. The Government “hopes to take on Silicon Valley, and to become the most innovative country in the world,” Tech Nation said, “but for the first time in decades, macroeconomic trends threaten Britain’s tech momentum.”

In November, Mr Hunt announced the Treasury would reduce the amount start-ups can claim in R&D tax relief, a key incentive used by many early stage businesses.

To be honest, the UK brain drain is already well under way, it’s inevitable unless the UK governments and their devolved puppets really pull their socks up, the UK will fall behind and fast.

My advice get more entrepreneurs involved in policy and not the usual ass kissing MBE hunters and groupies, get some real entrepreneurs who don’t have financial, fraternal or political agendas. Stop being lazy and just outsourcing to NGO’s staffed with Management consultants and civil servants, or worse offloading work to private banks and VC funds.

These organisations should be a political and shouldn’t be staffed by people who don’t know what they’re doing or unable to take any risk and innovate, that is exactly what they should be doing, calculated risk is a prerequisite of innovation, so if key stakeholders of an ecosystem can’t innovate, how the hell do you expect those who are building companies in it to do so?

Northern Ireland, England, Scotland and Wales have some of the worlds best universities, millions of talented people and London being a global centre of finance sitting on it’s doorstep, only a fool could mess that up…..

To follow Henry on Twitter click below.

Not sure if my piece below is sweet chilli or Jalepeno.

But here’s my two cents for @Irish_TechNewshttps://t.co/voyZQ0VRLv

— Henry Joseph-Grant (@speirin) January 31, 2023