President Obama’s JOBS Act was a welcome move toward streamlining the regulatory burdens placed on high-growth American companies listing on the public markets. But the British Government’s heavy breathing will have little effect in a market that has no appetite for or money to support tech IPOs.
The somewhat torturous set of supportive quotes in today’s press release from London internet bigwigs whose venture funds have been bolstered by public money, or who have accepted subsidised office space from the Government’s pals at Google, fails to address a structural failing in the plan.
Although smoothing the route to IPO is a real and difficult problem for mid-sized, high-growth businesses, and there’s no doubt that the Government is taking steps in the right direction with this new initiative, public marketplaces are called that for a reason: one needs both supply and demand.
European businesses go public in America because Europe doesn’t have the investors or general liquidity to support IPOs. What’s more, there are murmurings emerging from the US that even the JOBS Act, which the UK Government will have been following closely, hasn’t really made any impact.
So we should probably interpret this new policy move as merely the latest kiss blown to east London in the Government’s efforts to suck up to the one bit of the technology industry the UK is no good at, and which, politically speaking, is almost universally hostile to this Conservative-led administration.
There’s no indication that the Government’s ailing £2 million quango Tech City had input into these developments. But then, it’s expecting a bit much for an organisation that can barely tie its own shoelaces together to make meaningful contributions into regulatory or macro-economic debates.
That said, central Government is not exactly displaying world-class economic smarts either, having fallen for the old canard about IPOs and job creation. Everyone knows technology businesses don’t create the sort of jobs that Government would like: they do destroy them, of course, by introducing new efficiencies into verticals that previously required manual input, replacing people with platforms.
Even Facebook has only created around 3,500 jobs, all of them highly paid and doled out to college grads. Meanwhile, the west’s globalised information economies are leaving the unskilled working classes without purposeful employment, condemned to benefits or non-jobs in an engorged state sector – and, most importantly, voting Labour.
It’s of course heartening that the Government is paying attention. But you have to wonder when they’re going to stop politicking (against their own interests, ironically enough) and start focusing on some metrics that matter.