Briefing

City leaders from across Europe gathered in London earlier this month in a bid to accelerate delivery of innovative smart city technologies. The Royal Borough of Greenwich played host to a meeting of leaders arranged by European smart cities and communities programme Sharing Cities. The event attracted senior figures from more than 30 organisations from the worlds of business, academia, and local government. The meeting coincided with the launch of a Zero Emissions Delivery Scheme in Greenwich which aims to reduce congestion and poor air quality caused by delivery vehicles. Improving the way cities approach transport logistics is a core aspect of the Sharing Cities programme.

Ireland

As Britain enters its new economic chapter, there is much deliberation over what form the financial services sector will take. Many reports have centred on the dominance of London within the financial services industry, but they neglect to highlight important regional locations such as Edinburgh which is seen as a major financial centre for fund management employing approximately 52,800 people. In a European context, Ireland is seen as a pre-eminent location for fund services with its international financial services sector employing 25,000 people. As such, this represents an excellent opportunity, in light of changing regulatory and policy environments, for UK regions and European partners to drive job growth and improve asset management servicing.

Enterprise Ireland, the government organisation which supports Irish firms in the export of internationally traded services, recently co-hosted with the Consular General of Ireland an event looking at enhancing the links between Ireland and Scotland’s vibrant Financial Services industries. The event organised by the Scottish Irish Finance Initiative provided a strong platform to advocate a harmonised approach to financial services.

Since the industrial revolution, technology has been seen as a threat to workers, especially those in manual labour replaceable by machine, robot or computerised device. The process of robots replacing labour is not new, and as robot skills and productivity ratios increase and expand, humans will keep being replaced on labour markets. However, does this mean that automation is reconstructing modern economies into a productive system where human labour is obsolete?

The automation of work and introduction of new technologies have raised several questions for modern societies regarding the future of jobs, the accumulation of capital and the role of the government in the protection of labour. The latest report of the National Bureau of Economic Research (NBER) by Daron Acemoglu and Pascual Restrepo has brought back the discussion, proposing that new technologies are reducing employment and wages in industrial markets and that as automation increases there is “a very limited set of offsetting employment increases in other industries and occupations”.

According to Acemoglu and Restrepo, the use of industrial robots in the US from 1993 to 2007 caused significant job losses in major industries like manufacturing, food processing, pharmaceutics and autos, where “each robot reduces employment by 6.5 jobs” and “one robot per thousand workers reduces wages by 1.2%”. The authors make a call to explore different policy responses and prepare for the inevitable change whereby instead of complementing labour – as was thought after the first industrial revolution – technology is replacing it.

Donald Trump’s unexpected victory in the US presidential election has prompted much debate on the future path of US economic policy. According to American economist Joseph Stiglitz, the rules of America’s economic system have been rewritten over the past third of a century in ways that serve a few at the top, while harming the economy as a whole, especially the bottom 80%. Stiglitz says that if Trump is serious about tackling inequality, he must rewrite the rules, in a way that serves all of society, not just people like him. Stiglitz makes the following recommendations:

Investment: The item on the agenda should be to bolster investment, thereby restoring robust long-term growth. Trump should emphasise spending on infrastructure and research. Improved infrastructure would enhance the returns from private investment, which has been lagging. Ensuring greater financial access for small and medium-size enterprises would also stimulate private investment. A carbon tax would provide (i) higher growth as firms retrofit to reflect the increased costs of carbon dioxide emissions, (ii) a cleaner environment and (iii) revenue that could be used to finance infrastructure and direct efforts to narrow America’s economic divide. However, given Trump’s stance on climate change, this is unlikely to happen.

The split was predominantly un-welcomed, with 9 out of 10 tech companies opposing Brexit. Concerns over policy, trade, regulation and funding provoked fear and apprehension, while anxieties over the impact on foreign direct investment were rife. So, how is the UK faring almost 6 months on? As a tech powerhouse, the UK has always been a leader and key player in terms of IT opportunity and success, but does the country have the economic clout, innovation and culture to see it through the rocky road ahead? London’s tech businesses are led by some of the UK’s most entrepreneurial influences, hoping to rise to the post-Brexit challenge, and advocate the capital as a global technology hub with unparalleled investment potential.

Prior to June 23rd 2016, London was undoubtedly the tech start-up capital of Europe. However, since the country’s shock exit, the capital’s power and prestige has been called into question. The UK’s decision to leave the EU left investors in Europe’s leading start-up hub shell-shocked, culminating in real fears that international companies may think twice before investing in the country. Now that the initial shock of the decision to leave is beginning to fade, the focus is directed on managing the fallout and identifying opportunities. And there is an abundance of possibilities; with just under half (40%) of Europe’s tech unicorns – young companies valued at a billion dollars – based in Britain.