WEBVTT - Bloomberg Talks: Oxford Science Enterprises CEO Ed Bussey

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Now, let's talk a

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<v Speaker 1>bit more than about the Prime Minister Kirstarmer. He used

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<v Speaker 1>a galitzy London investment summit to proclaim growth and wealth

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<v Speaker 1>creation the cornerstones of his government. He pledged to rip

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<v Speaker 1>out the bureaucracy that blocks investment and make the country's

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<v Speaker 1>regulatory regime fit for the modern age. He also rejected

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<v Speaker 1>suggestions that he could raise capital gains taxes high as

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<v Speaker 1>thirty nine percent when he was speaking to Bloomberg yesterday. Now,

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<v Speaker 1>I'm pleased to say that joining us for a discussion

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<v Speaker 1>around this is Ed Bussey, who is CEO of Oxford

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<v Speaker 1>Science Enterprises, which is an independent investment company but focused

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<v Speaker 1>on building out companies that emerge from Oxford University. Ed,

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<v Speaker 1>welcome to the program. Thank you for being with us.

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<v Speaker 2>Good Morning's a pleasure to be here.

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<v Speaker 1>Yeah, you're also meeting with the Chancellor. You're involved in

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<v Speaker 1>in the startup and build up a program here in

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<v Speaker 1>the UK for business is How successful do you think

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<v Speaker 1>the investment summit was yesterday? What do you think of

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<v Speaker 1>the event overall?

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<v Speaker 2>Well, it sends a very important signal out to the

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<v Speaker 2>to the global market. That the UK is open for business,

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<v Speaker 2>so I think that has to be applauded. And clearly

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<v Speaker 2>we had some sort of big, big name investors attending,

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<v Speaker 2>and you know, I think it signaling is important. We

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<v Speaker 2>know we do need to reset the narrative. We we

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<v Speaker 2>need some more positivity and we and I know I

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<v Speaker 2>wasn't at the summit personally, but looking at the coverage,

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<v Speaker 2>including the great coverage from Bloomberg, I should say I think,

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<v Speaker 2>you know, it feels like that the government is genuinely

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<v Speaker 2>intending to really drive the growth agenda. I think there's

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<v Speaker 2>some sincerity behind that and is trying to be more

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<v Speaker 2>ambitious around that era, which you know is very welcome.

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<v Speaker 1>Okay, that's good, but surely action and delivery are the

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<v Speaker 1>thing that is required. I mean, the diagnosis of the

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<v Speaker 1>issue in terms of trying to improve the business environment,

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<v Speaker 1>and that's well understood. They have to deliver, don't they.

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<v Speaker 2>Absolutely what really matters now and yesterday is great, but

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<v Speaker 2>what really matters is what we all do now off

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<v Speaker 2>the back of it, because this needs action and it's fantastic.

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<v Speaker 2>We had some amazing headlines yesterday, some really big investment

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<v Speaker 2>numbers which are sort of great which is great news,

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<v Speaker 2>but this needs to flow through into tangible action that

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<v Speaker 2>makes a real difference for those of us who are

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<v Speaker 2>trying to build companies from the ground up in the UK.

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<v Speaker 2>And there are some significant challenges and I'm not suggesting

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<v Speaker 2>the government isn't aware of the challenges, but what really

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<v Speaker 2>matters is the resolution of some of the significant problems

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<v Speaker 2>that the sector faces.

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<v Speaker 3>And you know, I've just noted that there has been,

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<v Speaker 3>I guess a challenge to retain talent here in the UK.

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<v Speaker 3>Is there something tangible that the government can do to

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<v Speaker 3>help retain this talent? A lot of you know, recent graduates,

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<v Speaker 3>even these Nobel Prize winners ers, they were all born

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<v Speaker 3>and educated here in the UK. But since left is

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<v Speaker 3>there something tangible you're looking for for the government to

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<v Speaker 3>address that?

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<v Speaker 2>Well, yeah, there's a few really important dimensions to your question.

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<v Speaker 2>I think, first of all, if you look at the

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<v Speaker 2>founding entrepreneur ecosystem that we have here in the UK,

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<v Speaker 2>it's global. I think the latest numbers of forty to

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<v Speaker 2>fifty percent of the founders of our fast growth companies

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<v Speaker 2>come from outside the UK. So it's not just academics

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<v Speaker 2>and universities, it's the founders of our business, but also

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<v Speaker 2>the early stage investment community. It's entirely global, it's international,

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<v Speaker 2>it's from all over the world, and we do have

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<v Speaker 2>a problem attracting that talent across all those areas into

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<v Speaker 2>the UK. And I noted yesterday there was some comments

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<v Speaker 2>around well there hadn't been that many references to the

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<v Speaker 2>word tax. Now, if you're a large corporate based outside

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<v Speaker 2>the UK, that sort of one scenario and you might

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<v Speaker 2>hear that message. But if you're a founder or an

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<v Speaker 2>academic looking to set up a business, or an investor

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<v Speaker 2>and or a family office, the really critical layer of

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<v Speaker 2>the ecosystem which we need, that of which we need thousands,

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<v Speaker 2>those people do really care about taxes, their personal taxes,

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<v Speaker 2>capital gains taxes, inherit taxes. So for those people who

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<v Speaker 2>would be directly affected. Now, when we talk about working people,

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<v Speaker 2>this includes that group, the hard working entrepreneurs that are

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<v Speaker 2>trying to build companies and we need to bring them

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<v Speaker 2>from outside the UK because the are not enough here

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<v Speaker 2>in the UK to build the sort of scale of

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<v Speaker 2>growth that we're talking about.

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<v Speaker 1>Okay, so you really sure then that Stephanie Flanders whence

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<v Speaker 1>she was speaking to Kirstamy yesterday managed to get you

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<v Speaker 1>an avowal that actually thirty nine percent was a bit

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<v Speaker 1>off the mark in terms of capital gains tax increases.

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<v Speaker 1>Do you think that all the people that you are

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<v Speaker 1>speaking to are leaving because of the concerns around higher

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<v Speaker 1>taxation personal and business?

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<v Speaker 2>I mean, look, I can't talk about this quantitatively. I

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<v Speaker 2>do know anecdotally a number of investors and entrepreneurs who

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<v Speaker 2>have already decided to build their business outside the UK

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<v Speaker 2>just because they're concerned around the direction of travel that

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<v Speaker 2>has been signaled from a taxation perspective. Because we're again

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<v Speaker 2>we're this group is entirely mobile. Yeah, it's global, it's mobile.

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<v Speaker 2>They can set their business up in Zurich, or in

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<v Speaker 2>Barcelona or elsewhere. And we need to remember that there

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<v Speaker 2>are absolutely there are some financial challenges for the UK

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<v Speaker 2>which will it sounds like it's going to need some

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<v Speaker 2>sort of tax increase, but we're competing in a global

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<v Speaker 2>marketplace for talent and tax is an important part. Is

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<v Speaker 2>not the only part, but it's an important consideration for

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<v Speaker 2>people where they think about locating themselves.

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<v Speaker 1>So is kiss our Kissam and Rachel V's pro entrepreneur.

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<v Speaker 2>I think so that's what I'm That's what I'm hearing.

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<v Speaker 2>But it comes back to your earlier question. This needs

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<v Speaker 2>to translate into action. What are we actually going to do?

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<v Speaker 2>Because if on one hand, we have you know, sixty

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<v Speaker 2>eight billion of investment sort of booked as of yesterday,

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<v Speaker 2>but we then tax this layer of the economy to

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<v Speaker 2>the point where basically they don't know the opportunity cost

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<v Speaker 2>of people not coming here but also the existing people

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<v Speaker 2>here thinking of relocating, then we've just shot ourselves in

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<v Speaker 2>the foot. So that's it's going to come back to

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<v Speaker 2>what do we actually do off the back of this?

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<v Speaker 2>And so all I is focused on the thirtieth of

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<v Speaker 2>October in this respect, but there are are there other

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<v Speaker 2>parts of this. You know, the government has an important

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<v Speaker 2>role to raise money and help raise money with us

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<v Speaker 2>across the whole ecosystem. Procurement is another area where we

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<v Speaker 2>need real attention government procurement that is, talent is another,

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<v Speaker 2>and then we need joined up strategies around these high

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<v Speaker 2>value areas. It was great to see the announcements around

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<v Speaker 2>AI and and climate yesterday, but we need to be

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<v Speaker 2>focusing on quantum and the other sort of critical areas

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<v Speaker 2>where the UK has got a global edge.

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<v Speaker 3>Yeah, so I guess attracting investment money and having the

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<v Speaker 3>startups here, Yes, that's all well and good, but what

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<v Speaker 3>about the IPO landscape when it comes to here in London.

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<v Speaker 3>It's been you know, dire for the London market in

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<v Speaker 3>terms of IPO's barely four billion just in the last

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<v Speaker 3>three years. Is that were you and do you see

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<v Speaker 3>any action that the new government could take to help

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<v Speaker 3>foster that environment?

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<v Speaker 2>Well, I know talking to the likes of Julia Hoggett

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<v Speaker 2>that there is a real there is a real concern

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<v Speaker 2>and a real push to try to address that. It's

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<v Speaker 2>going to take time, a lot of these things, mansion house,

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<v Speaker 2>it's going to take time. So I think there's a

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<v Speaker 2>lot of good intention and goodwill and a lot of

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<v Speaker 2>good work going to try to resolve it. But you're

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<v Speaker 2>absolutely right, this is a problem. If we look at

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<v Speaker 2>our portfolio, we have one hundred and twenty companies in

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<v Speaker 2>the portfolio. We're building ten new spin outs a year.

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<v Speaker 2>We have a number of unicorns in the making. And

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<v Speaker 2>the sad fact is, if you look at it from

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<v Speaker 2>a uk PLC point of view, those companies that are

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<v Speaker 2>thinking about an IPO or or talking about and not

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<v Speaker 2>one of them is looking at the UK. Now with

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<v Speaker 2>my UK hat on, that's a bit of a travesty,

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<v Speaker 2>isn't it, Because we then get accused of building great

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<v Speaker 2>cat companies and then catapulting them out of the country. Now,

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<v Speaker 2>our shareholders who from around the world might say, well,

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<v Speaker 2>actually Nasdak's the right place maybe to list and so

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<v Speaker 2>you know, that's a logical economic argument, and I mean

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<v Speaker 2>you can't dispute that. But I think we'd say, with

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<v Speaker 2>my UK hat on, we have got a problem there

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<v Speaker 2>we need to fix because ideally we'd keep these companies here.

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<v Speaker 2>If the UK is going to build its first trillion

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<v Speaker 2>pound company, in my view, it's going to come out

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<v Speaker 2>of the deep tech ecosystem of one of our universities. Yeah,

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<v Speaker 2>that's where it's going to happen. And for the value

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<v Speaker 2>of that company to then trickle down to cascade down

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<v Speaker 2>in the UK and create the next generation of entrepreneurs

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<v Speaker 2>and capital flow. We need those, We need these listings

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<v Speaker 2>and exits to be happening here.

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<v Speaker 1>Yeah, And everybody, the government downwards talk about the importance

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<v Speaker 1>of the capital and the kind of the brain stoffs

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<v Speaker 1>that we have in our top universities, including at Oxford,

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<v Speaker 1>which is so important, and yet only earlier this year

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<v Speaker 1>I was doing special reporting and long podcast about the

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<v Speaker 1>dire need to fund universities a little bit better and

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<v Speaker 1>the fact that the nine thousand and something cap on

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<v Speaker 1>university fees is going to have to go up. That

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<v Speaker 1>would seem to be the drive funding university so that

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<v Speaker 1>people come here, and the visa requirements so that you

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<v Speaker 1>can come here and build that business. Is the government

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<v Speaker 1>doing anything on that, never mind skills and so on.

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<v Speaker 2>Well, so you've hit on a really I mean, this

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<v Speaker 2>is why I'm so energized about what I'm doing is

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<v Speaker 2>and it can equally be frustrating because one of the

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<v Speaker 2>areas where the UK has a massive competitive edge is

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<v Speaker 2>around our universities. Four of the top ten universities in

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<v Speaker 2>the world are UK universities, twenty eight of the top

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<v Speaker 2>hundred are UK universities. I mean, we are where punching

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<v Speaker 2>way above our weight and so funding our universities properly

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<v Speaker 2>and then supporting the commercialization of the world class research

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<v Speaker 2>that comes out of them is absolutely critical to the

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<v Speaker 2>government's agenda on growth, productivity and creating a superpower.

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<v Speaker 1>One last thought then are you disappointed that the amount

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<v Speaker 1>of money being invested into the National Wealth Fund has

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<v Speaker 1>been cut by what about a fifth? Twenty seven point

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<v Speaker 1>eight billion pounds will be allowed to be deployed for

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<v Speaker 1>the National Wealth Fund, which is one of the sources

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<v Speaker 1>of crowding in public private money together.

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<v Speaker 2>I think it's still a large amount of money. What

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<v Speaker 2>I'm focused on is where is that money going to

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<v Speaker 2>be allocated? And also that's why the Mansion House Compact

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<v Speaker 2>is so important. You know, that's the forty to fifty

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<v Speaker 2>billion that if we can drive that through on an

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<v Speaker 2>accelerated basis, we haven't got time a lot of time here,

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<v Speaker 2>then I think that's what's going to make a real difference.