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Disruption shouldn’t be a dirty word

Startups are in an enviable position compared to many sectors of the economy in at least one way: politicians and policymakers really want to help them.

There are legitimate policy reasons for this (startups have a disproportionate impact on productivity growth and innovation), but also political ones –  they want to be seen to be encouraging the innovative and exciting new thing.

Bans and raids

This is broadly a good thing, especially compared to other places in Europe. In the last fortnight we have seen the mayor’s office in Paris begin raiding apartments suspected of being rented out on Airbnb, while Berlin has banned Uber.

But what we have yet to see from British political leaders is a clear statement of the role of the state when it comes to disruptive innovation.

Reality bites

It’s all well and good to welcome the positive impact of startups and encourage policies to support them, but the whole point of disruptive innovation is that it’s disruptive, ie has some negative consequences for some people.

I would argue that this is a great thing overall, and I’m sure most of the readers of Tech City News would agree. It leads to more consumer choice, and to cheaper, better services and products. It’s how progress happens.

Disrupt and distrust

But there is no getting away from those negative impacts too – as travel agents, bookshops, video rental shops all found out. This leads people to worry about tech destroying jobs, the impact on society, and risks a public backlash.

On the day of the Uber protests in June, European Commissioner Neelie Kroes wrote a brilliant article looking at this issue:

The disruptive force of technology is a good thing overall. It eliminates some jobs and it changes others. But it improves most jobs and it creates new ones as well… the job of the law is not to lie to you and tell you that everything will always be comfortable or that tomorrow will be the same as today.  It won’t… it’s time for people at local and national levels to sit around a table and come up with reasonable accommodations of innovation

Political stances

Often those on the right in politics have focussed on encouraging the positive, those on the left on mitigating the negative. I would like to see the UK’s political leaders set out more comprehensive positions on disruptive innovation.

In my ideal world, this would mean wholeheartedly backing disruption. To say that the role of the state is unequivocally to encourage innovation and competition with the minimum red tape needed.

But also to say that it will support those who lose out, including through better learning opportunity for adults to retrain.

Talking about how they would deal with the negative consequences, as well as encouraging the positive ones, can only be a good thing for startups.