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Comment by sambeau | Hacker News Reader

ARM is a brilliant (if not the poster-boy) example of why the UK government should be investing in new technology companies rather than car manufacturing and banking.

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I suppose you are too young to remember "picking winners", Harold Wilson, British Leyland, Red Robbo... Or more directly, Grundy and their NewBrain vs Acorn... Historically, government meddling in industry in the UK has been a disaster.

Serious question. Was it a disaster or did they just pick the losing team?

Sometimes the government picking a loser can still cause a market to expand.

Well, they picked one winner - Leyland - and force-merged them with all the losers, in the hope that Leyland's magic would somehow infuse them. Instead, it destroyed them all. Some of the brands, like Jaguar, Daimler, Land Rover, etc live on. But not as British companies.

> Was it a disaster or did they just pick the losing team.

The government always picks the losing team. The winning team doesn't want anything to do with the government.

The winning team is the one that pays the government, not the other way round.

^dogma

My karma ran over your dogma.

What went wrong with Leyland? It's a very respected trademark here in Uruguay, we still have some Leyland buses in operation here, including 1949 Leyland Olympics (!!!)

It's even on Wikipedia http://en.wikipedia.org/wiki/Leyland-MCW_Olympic

"The Olympic was popular in Montevideo, with 240 entering service in the 1950s and 1960s. 50 of these were new to the Montevideo local authority, most of which passed to major independent and the other customer CUTCSA on privatisation. Some of the 240 were still in use as late as 2001 including a 1951 EL40 in use as a driver trainer."

Edit: kind-of-answered simultaneously here http://news.ycombinator.com/item?id=3698064 while I was writing the question :)

"they picked one winner - Leyland - and force-merged them with all the losers"

BL was responsible for some of the most ghastly cars ever created, including:

http://en.wikipedia.org/wiki/Morris_Marina

http://en.wikipedia.org/wiki/Austin_Allegro

The US government picked winners like Intel, saving the US semiconductor industry through protectionist policies. (http://www.forbes.com/2003/10/10/1010grovepinnacor.html) In fact, the US technology industry was developed through enormous subsidy, from transistors to the internet.

Economist Ha-Joon Chang discusses that's how powerful nations develop. The entrepreneurial Japanese government's first forays into the auto industry were failures, but of course they kept at it, learning from failure. That's the nature of investment, as any HN reader should know.

Japan's record isn't that good - MITI tried to strangle both Japanese auto exports and the semiconductor industry in their cradle because they didn't conform to Japan's development plan.

Sony's initial plan was rice cookers.

My experience of government "investment" (both UK and EU) in the technology sector is that is has been the most frightful waste of money imaginable.

It's not down to lack of money - but the way it has been spent.

You have to remember how many failures it takes to have a big success. For every Intel there's a wasteland of shoulda-been companies that are dead and forgotten, with billions invested having gone up in smoke.

Of course, when it's private venture capital that's behind this, people don't seem to complain as much.

Honestly, I've been in a couple of startups (including one that got a lot of funding from VCs and going public) and I've never seen anything like the inefficiency that was normal in the public sector projects that I worked on.

Not that I'm against public funding of research - I'm absolutely not. But my experiences of public sector research funding on "large" projects completely put me off working in that sector (so much so that I left academia to co-found a start-up).

Publicly funded projects are such an inefficient mess, in part, because of all the shit that is done to make sure that tax dollars aren't "wasted."

True that.

I've worked on publicly funded projects and in the private sector. The publicly funded projects were the worst for pointless reporting, accounting, and paperwork.

In the private sector, the boss pops his head in and asks what I've done to day and what I'll finish by the end of the week, and we adjust goals. It takes about 5 minutes a week to do this.

When I was working on a publicly funded project, there was a report to be filed every day that took an hour of my time to do, a report to be filed every week that took about three hours over the course of the week, meeting with management to make sure that the first two reports were complete, accurate, and not fudged which took an additional two hours a week, and an end of the month assessment for both spending and time clocked in that took about twelve hours over the course of a month.

So guess where I'm more productive.

That was probably the single biggest issue, although there were others, there was a huge administrative overhead on all of the projects that it made it difficult to spot where any actual research was being done.

I would speculate that you're probably more selective about the kinds of companies you work for than a VC is in funding them.

There have been some legendary turkeys over the last ten years, but for every pets.com or hairdryersbyemail.com there's dozens of others so misguided you never heard a thing, they just went nowhere fast.

> Of course, when it's private venture capital that's behind this, people don't seem to complain as much.

That's because private venture capital is people spending their own money, rather than other people's money.

No it isn't. It's usually a fund manager spending other people's money; if s/he strikes out too many times, the money leaves and the fund closes down.

"Taxpayers money" versus "Taxpayers retirement money" is a subtle distinction here, isn't it?

I'm not quite sure why the government's choices back then would have any bearing on their choices 30 years later? It's not the same people. It's not even the same generation.

The poor state of car manufacturing and banking would seem to argue against inflicting "government investing" on new technology companies.

The banking industry managed to wreak itself without serious government investment. The trouble was an absence of effective deterrents to bankers seeking dangerously high levels of leverage.

I think many people are assuming this means direct investment but maintaining a high quality, accessible education system is arguably more important.

Especially as ARM originated from Acorn, whose success came from manufacturing the BBC Micro, for a publicly funded organisation (the BBC).

Ahem, Acorn paid the BBC a fee for every Beeb sold, as a licensing fee on use of the logo.

Acorn were also almost overlooked in favour of a company called Grundy, which had government backing, but inferior technology.

http://en.wikipedia.org/wiki/Grundy_NewBrain

On the other hand, the BBC Micro would almost certainly not have been the success it was without the Beeb and the lift it gave to Acorn in the educational market.

Look at it as very well-priced advertising, after all the BBC effectively promoted their product. They nearly lost out to Sinclair Research as well, but that's a well known story...

The BBC were careful never to say "Acorn" on-screen (same as they never said Sellotape, it was always "sticky-backed plastic", to the amusement of the entire population).

I actually had a NewBrain, think it's still around in my parents' attic somewhere.

I did quite a bit of real paying work on BBC Micros back in the day, and think they were great - but reading the way people tell the story today, one would be given the impression that the NewBrain was some kind of grim socialist piece of junk. It was actually a pretty decent bit of kit, quite a bit better quality than many of the other micros on the UK market at the time.

In an ironic turn, the company I worked for doing the BBC stuff later moved into Grundy's old premises in Teddington after they went bust.

ARM employs about 2 000 people [1]. They're definitely a huge boon for the British tech community and competitiveness, but justifying government support for such a small employee base would be untenable.

[1] http://www.arm.com/about/company-profile/index.php?setcookie...

Northern Rock employed 5000.

Bank bail-outs aren't about employment, they are about protecting people and other business from losses in assets in the banks.

Most of the 2000 may be highly skilled or at least a large proportion to that of a bank, increasing funding in such a company may increase the number of people taking up science and engineering disciplines in education.

How many of those 2000 are in the UK?

Most of them.

There's also all the other small companies that benefit from being near ARM, for instance the chip design team in Britain my company picked up.

Yes. There's a temptation, because they both "make CPUs" to view ARM as the "next Intel", but it's not like that at all. Intel is an industrial manufacturing company. They happen to manufacture CPUs that they've designed, but "what they do" (or at least, where their money comes from and where the bulk of it goes to) is manufacturing. In the ARM world, all that cash flow goes through TSMC, Samsung, TI, Global Foundries, Fujitsu, etc... Basically none of it goes through the UK.

ARM's model, of course, is absolutely the future of semiconductor design. But it's not going to bring an Intel-sized industry to the UK.

To be fair, via TSB, the UK is investing in new technology companies... not sure how that compares to their investment in car manufacturing, though. However, afaik the main "investment" in banking was to save the banks that were going bust.

Disclaimer: I might be completely wrong about the above!

And yet, according to: http://www.raspberrypi.org/archives/509

"If a British company imports components, it has to pay tax on those (and most components are not made in the UK). If, however, a completed device is made abroad and imported into the UK – with all of those components soldered onto it – it does not attract any import duty at all. This means that it’s really, really tax inefficient for an electronics company to do its manufacturing in Britain"

Meh..

ARM only employs ~2000 people, not all of whom are in the UK. That's hardly a mass employer like the manufacturing sector is.

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