Comment: Supporting innovation? We need to be innovative

Wednesday 14 March 2018

The story of the Jersey Innovation Fund was one of the most controversial episodes in the administration of the current Council of Ministers, leading to high profile resignations, a police investigation and a clamp down on States support for innovation.

Meanwhile Guernsey has learnt from Jersey's experience, and launched a similar - but also critically different - Fund to support its own economy. Today, Express columnist, The Insider, takes a look at what Jersey needs to do to get back in the game.

"I recently argued that the finance industry needs to work harder in communicating the benefits it brings and do a better job in convincing those who feel marginalised that it is, on balance, a force for good.  For example, we could all do more in the area of innovation - which doesn’t need to be led by government. 

We are all bored of the debacle surrounding the Innovation Fund.  To be clear, this was a good idea, badly executed; choked by the dead hand of government.  Guernsey seems to have learnt from our mistake, because no politicians or civil servants will be involved in the recently launched Guernsey Innovation Fund.  We need to get over the blame game, and move on, as the cause is right.

Hats off to Bailiwick Express for its Business Academy, and for those sponsors and private individuals who have been actively supporting innovation.  More could be done in a holistic way to help them.  To achieve the best outcomes, we are going to need a grown-up conversation which recognises that either government money, or a tax break for private money, is necessary to have the desired effect of stimulating the non-finance sector, and delivering life opportunity for young entrepreneurs. 

Taxpayers’ money is largely off the table.  For a variety of reasons, I believe that this is better achieved with private risk capital anyway, and thankfully, there is a lot of private capital in Jersey. We have also benefited from an influx of very successful entrepreneurs who are willing to give back in terms of mentoring.  We have all of the ingredients.  We just need to make it easier for the ingredients to come together.  All we need the government for is to provide a ‘holistic framework’ within which the private sector can operate; the government should not take the lead, but it is a necessary participant.   

I am old enough to remember a number of local companies listed on the stock market with a large number of local shareholders who traded in them, for example Ann Street Brewery, Le Riches, De Gruchy and Channel TV.  We also have a local stock exchange which has suffered from an excess of ‘financial instruments,’ and a deficit of local trading companies, which would add the credibility of making it a ‘real’ stock exchange serving a real economy. 

As part of a holistic strategy the embers of local capital markets could be racked over to make a significant impact on the local economy.  Central to this should be the idea of a local Venture Capital Trust, run by professional managers, funded with private money and supported by a tax break (a model successfully used in the UK for many years). 

This idea has been promoted locally for many years, by various people, none of whom has got traction.  It would be one element around which others could be added if only the new government would commit itself to the launch of a holistic strategy for innovation and entrepreneurship.

After the election I would like whoever is sitting in the Chief Minister’s chair to make a government sponsored framework for innovation and entrepreneurship, driven by the private sector with private sector capital, a top priority - the ingredients are almost all there, and so the Island can have them at very little cost, if only we could join up the dots."