The government thinks that targeted subsidies, tax credits and policy will take our economy to the next level. But picking winners – this includes industries – misses the point behind why we have fewer start-ups than we should have for a country supposedly with a No-8 wire mentality.
The biggest obstacle to starting a business is not having any money. Working backwards from that, an economy that delivers consistent increases in the cost of living alongside negligible increases in real incomes is the root cause of a lack of entrepreneurial drive leading us out of the biggest setback to our economy since the Great Depression.
It would be awesome if all business ideas could be bootstrapped from an untapped credit card balance, but the sort of technology ideas that is possible with won’t lead to massive net job creation.
Technology start-ups will deliver a lot of high skill jobs and some lower skill support roles. But nowhere near enough to create dozens of new cottage industries that will employ the 175,000 unemployed marginal workers.
When the government focuses on spending money directly on financing R&D they’re admitting failure. If the economy functioned properly – rising incomes, falling costs and an ability for the average household to experiment with entrepreneurship without signing over their entire asset base – there’d be no need for technology grants and the like.