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Homemade silicon

Written by Scott Reid, chief of staff
Edited by Harriet Moll, creative director
25 September 2020

Good morning,

Scotland’s Silicon Glen, London’s Silicon Roundabout and any other European locale with a tech hub that you care to stick ‘silicon’ in front of; they all represent dreams for flourishing tech centres to compete with California’s hallowed Silicon Valley for its global clout in revenues, jobs and creativity.
 
So, how are they getting on? Well it’s no surprise that US giants such as Amazon and Google still continue to dominate the tech space in Europe.
 
But the race is definitely on for more homegrown super-companies to emerge.
 
See yesterday’s commitment by Spotify’s chief executive Daniel Ek to invest €1 billion in European tech start-ups working in key growth areas of machine learning, biotech, material sciences and energy. Speaking at the technology conference Slush, the Swedish entrepreneur said that Europe was underfunding start-ups “by an order of two or three” when compared to the US. “We need more super-companies that raise the bar and can act as an inspiration”, he said.
 
Ek joins other large European VCs such as Atomico, Balderton Capital, Accel, Index Ventures and Northzone, but collectively Europe needs to up its game. In the second quarter, CB Insights estimates that European start-ups raised $7.3 billion in 843 deals, while Asia companies raised double that, and US nearly quadruple.
 
Positive sign number two: here in Scotland, a landmark report into the Scottish technology ecosystem by the former COO of Skyscanner, Mark Logan, was released in August and was curious for the fact that it instantly won critical claim from politicians and business leaders alike, despite not getting too much coverage elsewhere in the UK.
 
To create a self-sustaining ‘tech Scotland’, Logan wants to see a well-funded network of incubation centres, a cross-sector collaborative approach to technical education which “treats Computing Science like Maths or Physics” and for government to underwrite the salary of senior tech leaders relocating to Scotland for up to 12 months. In September, Logan’s 34 recommendations were accepted to be implemented in full by the Scottish government.
 
Sure, you might say that interventions from two entrepreneurs are a drop in the ocean. But I’d counter that without Gates, Jobs or Zuckerberg, Silicon Valley would be a very different place today. Here’s hoping that more of Europe’s best and brightest speak up so that governments and investors listen.

News

Chancellor Rishi Sunak yesterday announced a £10 billion winter economic plan that is intended to replace the UK’s furlough scheme over the next six months. Among the measures were an extension of the cut in VAT and a new job support scheme which, from November, will allow government to subsidise jobs where employees work reduced hours. SME-focused ‘bounce-back loans’ will also be extended from six years to 10 and self-assessed income taxpayers can extend outstanding tax bills over 12 months from January.
 
Senior Republicans have guaranteed a peaceful transfer of powers should Donald Trump lose November’s US presidential election. The move, which included comments by Senate majority leader Mitch McConnell, Florida senator Marco Rubio and Utah senator Mitt Romney, was a rare repudiation of President Trump from his party peers. President Trump has so far failed to commit to an orderly transition should he lose in November.
 
University communities across Scotland have disputed lockdown measures on campuses after more than 1000 students in halls were placed in isolation following several outbreaks of Covid-19. Principals have banned all students from visiting bars and hospitality venues this weekend whilst reinforcing the message that a return home while in isolation would be illegal. Students at Edinburgh Napier, Glasgow, Abertay, St Andrews and Aberdeen universities are among those affected.

Business and economy

The Financial Conduct Authority has urged Google to do more to tackle fraudulent advertising on its platforms. Sellers of unregulated minibonds, including London Capital & Finance which collapsed last year, are thought to be particularly risky for consumers despite regularly appearing in searches for phrases like “high return investments” when using Google’s search engine. FCA chairman Charles Randall said that; “What Google are doing, so far it’s not working.”
 
A US judge has ruled against a proposed ban on TikTok by the Trump administration from midnight on Sunday. US district judge Carl Nichols agreed that a rapid ban posed additional risks to national security and has now given the US government until 2.30pm Friday to either agree to delay its proposed ban or file against an injunction request by TikTok’s owner, ByteDance Ltd.
 
The world’s first flight of a commercial-grade aircraft powered by a hydrogen fuel cell took place in the UK yesterday. ZeroAvia test drove a six-seater Piper Malibu plane from Cranfield University’s airport that lasted eight minutes in flight. The flight was the culmination of a two-and-half year, £5.5 million programme jointly funded between ZeroAvia and the British government.

Columns of note

Chris Deerin writes in the New Statesman that Scottish home rule is an idea whose time has come and gone. The director of the Reform Scotland think tank suggests that the “third way” approach between the status quo constitutional position and independence would not have prevented Scotland’s involvement in either the Iraq War or Brexit despite political opposition and so would not have proved sustainable.
 
And in The Atlantic long read, Barton Gellman suggests that a close-run US presidential election could push the nation’s constitution to its limits. Surveying a hypothetical scenario in which there remains no clear winner by inauguration day on January 20, Gellman suggests that the Senate, House of Representatives and Supreme Court could all be called to intervene.

Cartoon source: The New Yorker

Markets

What happened yesterday?

Gains for sterling following chancellor Rishi Sunak’s announcement of new measures to replace the furlough scheme yesterday made for overall losses on the stock market, with the FTSE 100 down 1.3% at 5822.78 points. The pound stood 0.3% higher against the dollar at $1.28 and was up by 0.2% on the euro at €1.09.
 
In company news

  • Rolls-Royce lost 7.57% after posting a drop in annual profit at the same time as reinstating its dividend and commenting that business was “stabilising”.
  • Travel operators IAG (-5.33%), InterContinental Hotels (-0.82%) and easyJet (-3.34%) were all trading lower on diminishing prospects of a quick return to mass air travel in the short-term.
  • And Pets at Home surged 27.79% on the FTSE 250 after reporting that its full-year underlying pre-tax profit was set to exceed market expectations at £73 million in sales.

What’s happening today?

Finals
Camellia

AGMs
Catenae In Plc
En+ Group S
Fusion Antibody
Icg-longbow
India Cap
Lekoil
Marble Point
Okyo Pharma Li.
Otaq.
Schroder Real  
Solo Oil
Subex S

Trading announcements 
Pennon

UK economic announcements
(00.01) GFK Consumer Confidence
(07.00) Public Sector Net Borrowing

Int. economic announcements
(09.00) M3 Money Supply (EU)
(13.30) Durable Goods Orders (US)

Source: Financial Times

did you know

The first recorded use of the word ‘pizza’ is from 997CE, in a list of annual demands from an archbishop to his tenants.
 
Source: @qikipedia

Parliamentary highlights

House of Commons

Private Members’ Bills
Various
 

House of Lords 

Statement
UK Government’s response to presidential elections in Belarus – Baroness Sugg
 
Government’s response to the Gender Recognition Act 2004 outlined in the Government Equalities Office Update of September 22 – Baroness Berridge
 
Orders and regulations
Various

Scottish Parliament 

No business scheduled.

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