As Our World in Data informs us, extreme poverty around the world is plummeting. There are more than a billion fewer people living below the International Poverty Line of $2.15 per day today than in 1990. On average, the number declined by 47 million every year, or 130,000 people each day.
This isn’t to excuse the poverty that still blights our world – exactly the opposite. It’s proof that progress is possible, and a motivation to work all the harder to help the remaining 650 million people – roughly one in twelve – who still live under that line.
So how does this happen? To radically simplify, the world gets richer through productivity increases – in other words, doing more with less, with entrepreneurs the driving force behind this. This doesn’t just happen in isolation – an entrepreneurial society is a social phenomenon. As Alfred Marshall set out in 1890 in Principles of Economics, agglomeration economies benefit from being close to one another due to knowledge spillovers, shared suppliers, and a concentrated labour market.
In other words, an entrepreneurial society thrives when businesses, talent, and infrastructure reinforce one another. This is why the Oxford-Cambridge Arc has long been seen as a potential growth engine – and why we’ve been long-standing supporters of it. As some readers may remember, the original plan under Boris Johnson was to build a new rail link, new homes and a new expressway – but bit by bit, the project fell apart.
In a turn towards growth, Rachel Reeves has revived the Arc. And it’s worth quoting her at length – both for the all-too-rare pleasure of reading political statements that we can wholeheartedly endorse, but also to set it down as a marker to judge words against action.
The Chancellor said: “To grow, these world-class companies need world-class talent who should be able to get to work quickly and find somewhere to live in the local area. But to get from Oxford to Cambridge by train takes two and a half hours.”... “There is no way to commute directly from places like Bedford and Milton Keynes to Cambridge by rail. And there is a lack of affordable housing across the region.”... “Oxford and Cambridge are two of the least affordable cities in the UK. In other words, the demand is there but there are far too many supply side constraints on economic growth in the region.”
As Stian Westlake, Executive Chair of the Economic and Social Research Council (ESRC) and one of our Advisers, said back in 2022: “If you’ve got lots of smart people doing great research, if you make it easy to build housing and offices near those people, the magic of the free market will do its thing. People will set up businesses and economic growth will happen.”
“The tragedy in the UK,” he goes on to say, “is that we channel lots and lots of public money into two very beautiful towns – Oxford and Cambridge – where it is almost impossible to build anything. The arc is an attempt to solve this by allowing people to build things in between – Milton Keynes, Bedford – link it up with roads and rail, so it gets easier for entrepreneurs to set up the things they want to.”
As we wrote in Building Blocks: “Too few people subscribe to an agglomeration-led approach to growth. The political focus of late has shifted away from championing dynamic hotspots like the Golden Triangle, most obviously, but also even regions like Manchester, Leeds, Birmingham, Edinburgh and Bristol.”
I’ll end with the words of Reeves: “It has the potential to be Europe’s Silicon Valley. The home of British innovation.” (Though in the long run, actions speak louder than words.)
The Codemakers
Hot off the press, we’ve just released an interview with Herbie Bradley, AI governance and policy expert and former member of the technical staff at the AI Safety Institute (AISI).
The interview with Anastasia Bektimirova, our Head of Science and Technology, covers a lot of ground, which defies summarising. Instead, I will point to one lesson Bradley says he learned from his experience at AISI that could be applied to getting other existing and future projects off the ground and scaling them effectively within DSIT, or government more broadly (excuse the long quote, but I think the insight deserves it):
“When you’re trying to build state capacity or launch a new initiative that needs to be impactful and move fast, you basically need to start a new team. If it’s an existing team, it’s probably too enmeshed in bureaucracy.
Secondly, you need significant political backing. In our case, we were fortunate to have great support from Henry de Zoete, who was then the Prime Minister’s Adviser on AI, and others in No. 10 and DSIT, particularly the minister at the time, Michelle Donelan. This means you can get around normal bureaucracy when needed, like hiring someone in a way that hasn’t been done before within the department.
You also need an incentive to perform well. This could be internal motivation from team members believing in the ideal or mission, a tight deadline like a Summit organised on very short notice, or competitive pressure from overlapping mandates with existing teams.
And finally, try to hire from outside government – people who are used to moving fast from industry and the startup world. That’s also effective.
There is an inevitable effect where a new, fast-moving, high-entropy team gradually gets pressed down by bureaucratic systems like HR, contracting, and finance. The general systemic incentive is to reduce fast-moving teams to a low-entropy state and make them more similar to the rest of government.
To counteract this, you need political backing and might need to start a new team or initiative if the first one becomes too slow. This explains why politicians often like to start new teams. There is an analogy here to the fractal startup model in industry. OpenAI scaled their ChatGPT team by creating conditions mimicking a pre-seed stage startup – totally new Google Drive, getting the new product team together in person five days a week, creating a separate office space – and that works surprisingly well.”
I strongly recommend reading the interview in full.