BARRY COLLINS
…we should worry that we don’t have more of them in the first place, and that means we need to plan for serious growth
Instead of mourning, we should worry that we don’t have more companies like Arm in the first place, and that means we need to plan for serious growth.
Gone are the days when companies slapped “British” at the front of their name as a badge of honour. British Airways, British Leyland, British Telecom: even though two of those three companies still survive, their names feel like relics from a Pathé newsreel.
If the “British” brand had still been in vogue in the 1990s, Arm Holdings might have been known as British Semiconductor. Born in Cambridge as a brilliant byproduct of the Acorn Archimedes, Arm has been that rarest of things: a British tech success story. Hence the period of national mourning that’s followed the news that it’s to be sold to US graphics company Nvidia.
“I think it’s an absolute disaster for Cambridge, the UK and Europe,” Hermann Hauser, one of Arm’s co-founders, told BBC Radio 4 when the sale was announced. Hauser’s obituary arguably comes four years too late, though. Arm hasn’t been a British company for quite some time, not since it was sold off to Japanese investment group SoftBank in 2016. Hauser’s fears about the new owners dismantling the UK headquarters and eroding Arm’s vendor neutrality might prove well founded, but Arm stopped being a British-owned entity years ago.
Should Arm’s sale be a cause for anguish? Not really. Companies change hands all the time, and it feels like people complaining of sales to the Japanese/Americans fall into the same sector of the Venn diagram as those moaning when Rule, Britannia! wasn’t going to be sung at the Proms.
The reason this one stings, though, is because Arm is by far the biggest computing company we have. Or had. Its processor designs are in almost every gadget we touch: in phones, tablets, in laptops and in embedded devices. ARM chips are everywhere, but Arm isn’t “ours” any more.
How much will it hurt? In financial terms, not greatly. Arm makes good money, but it’s not in the same league as Apple, Google or Facebook. The company made a £1 billion profit in the year ending 2019 – hardly corner shop territory, but not about to fund the NHS with its tax returns, either. Arm’s 2018 tax strategy noted that “a large proportion of Arm’s products are developed in the UK, where the UK government offers credits to companies with R&D commitments” and mentioned other UK tax benefits, so let’s assume the blow to HMRC isn’t monstrous. And Nvidia has made commitments to retain the 2,000 or so Arm staff based in the UK.
In short, the sale of Arm represents a greater knock to British pride than to the balance sheet of UK PLC. If we want to foster the trillion-dollar tech company that Dominic Cummings dreamt up after a heavy night on the Downing Street Stilton, we need to start making the UK more amenable to tech startups.
Right now it’s positively hostile. When David Richards decided to bring his Big Data startup, WANdisco, from Silicon Valley to Sheffield, “most of my friends in London thought it was some kind of staged joke,” he told the BBC. When I spoke to him six years ago for PC Pro, he complained that the biggest problems he faced were a government determined to locate every tech startup in Shoreditch and British universities churning out graduates with outdated skills. WANdisco continues to thrive in Sheffield, but you feel that’s despite the prevailing conditions in the UK, not because of them.
Instead of bellyaching about the loss of a single company, we should be pouring our energy into working out why the world’s sixth biggest economy is so bad at nurturing global tech companies. I don’t much care for Dominic Cummings or the current government, to put it mildly, but even if its tech drive is nothing more than a soundbite right now, at least someone seems motivated to grow super-scale tech firms here. Now they’ve got to do the hard bit: provide the conditions in which such startups can thrive.
That doesn’t mean Tech City 2 or blatting away data protections so that we’re more closely aligned with the US. It means a proper review of the UK’s infrastructure, education and entrepreneurial support so startups aren’t disadvantaged before they’ve even registered the business’s name.
None of this is simple. None of it will be achieved overnight, probably not in the lifetime of this parliament. And that’s what makes me fearful: the desire for short-term results for which the current government can take credit at the polling station will outweigh any of the genuinely useful long-term measures.
Don’t mourn the loss of Arm. Mourn the fact that there aren’t a dozen like it – and that there likely won’t be for the foreseeable future.
The reason this one stings, though, is because Arm is by far the biggest computing company we have. Or had
It means a proper review of the UK’s infrastructure, education and entrepreneurial support so startups aren’t disadvantaged