Being a Government Minister can be a wild ride. Just take Nadhim Zahawi as an example. Having spent the last 10 months or so focusing day and night on all things vaccines, he’s been promoted to Secretary of State for Education and will now be doing a radically different job. While he and his successor, Maggie Throup, will have advisers and the civil service to help with the continuity, this sort of disruption would be a bad way to run a business and when you take a step back it’s a rather odd way to run a country.

As well as reshuffling people, governments sometimes reshuffle whole departments – normally after an election. For example, the Department for Business, Energy and Industrial Strategy (BEIS) came about after Theresa May merged the Department for Business, Innovation and Skills (BIS) and the Department of Energy and Climate Change (DECC). These departments had been created from the previous merger of the Department for Innovation, Universities and Skills (DIUS) and the Department for Business, Enterprise and Regulatory Reform (BERR), which took the place of the Department of Trade and Industry (DTI) which somehow managed to survive without a rebrand from 1970 to 2007. They probably should have just stuck with the name DTI all along, or just changed it once to the Department for Business – it would have at least saved money on new signs.

This isn’t to say all departments should remain ossified in the 1970s – particularly when changes in the world demand new things from the government. Tech is the most obvious example here, but its ever-growing importance is at odds with it sitting alongside culture, media and sport in the Department for Digital, Culture, Media & Sport (DCMS). Digital/tech used to sit across BIS too, which came with its own challenges, but when they decided to place it in one department they probably picked the wrong one.

Tech policy would fit better within BEIS (or whatever they decide to call it next). This isn’t about who is in charge. Whether you’re more a fan of new minister Nadine Dorries or her predecessor Oliver Dowden (or neither), they shouldn’t have to juggle digital policy with culture, media and sport.

To some extent, this will be mitigated by junior ministers. Chris Philp, as Parliamentary Under-Secretary of State for Digital Economy, will take the lead on a lot of tech policy. But you would be hard pressed to convince me that ultimately the responsibility is more at home with the person tasked with thinking about museums and galleries than the person whose job it is to "ensure the UK remains at the leading edge of science, research and innovation."

Exit Strategy
Our friends at Coadec have a report out on the potential impact of the Digital Markets Unit (DMU) from the perspective of tech startups and investors.

It’s a punchy report, built around a survey of investors and echoes some of the concerns touched on in our Conflicting Missions report about the significant risks that the DMU poses to competition, innovation, and entrepreneurship.

The report finds that there is concern among investors for tackling anti-competitive behaviour, with 80% of investors surveyed either concerned or very concerned about incumbent companies making it harder for new entrants to break into markets. But investors are particularly concerned with barriers to entering markets dominated by incumbent non-digital companies, rather than other tech companies.

With 90% of investors agreeing that the ability to be acquired was very important to the health of the startup ecosystem (not sure what the other 10% think, as exits are how they make their money), it should be hugely concerning that half of investors would significantly reduce the amount they invested in UK startups if the ability to exit was restricted, while 22.5% said they would stop investing in UK startups completely.

The report suggests a real lack of trust between UK investors, regulators and government, with 80% of investors feeling that the government has only a basic understanding of the startup market; 60% think that UK regulators only have a basic understanding of the startup market; and 70% of investors believe that UK regulators only think about large incumbent firms when designing competition rules, rather than startups or future innovation.

Part of the challenge for Government and regulators is that entrepreneurs rarely want to speak publicly about their concerns around regulation. For example, they understandably don’t want to alert the regulators to the fact that they might one day hope to exit their business (even though this is a completely reasonable thing to aspire to do). We had an event with the DMU not long ago and for the first time since starting the think tank, the majority of entrepreneurs on the call were more happy to listen than talk about their concerns despite being very vocal about them in private.

Investors can speak more openly, which is what makes Coadec’s report really important. While the interests of entrepreneurs and investors aren’t always aligned, those that have taken VC money will be eyeing up some sort of exit at some point, so the views of investors are a useful proxy for entrepreneurs' opinions on this matter. The evidence here confirms what is being said in private conversations – there are growing concerns from startups about competition policy.