Government should insure first customers of tech start-ups

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Being a customer of a tech start-up is risky business, and the Government should do more to protect such customers, according to a new report by IPPR.

The think tank believes the Government should ensure first customers, as such a move would make it less risky to do business with tech start-ups. That way, getting innovative ideas of the ground wouldn’t be as big of a challenge as it is today.

But what’s in it for the Government? An equity stake would be a solid option, IPPR thinks, to be held in a Citizen’s Wealth Fund. In case a start-up really does succeed, the funds would be used to train people who are at risk of losing their jobs to automation.

Tom Kibasi, IPPR director, said: “The UK is a leader in tech innovation — but if we are to go from start up to scale up, we need an entrepreneurial state that helps business to flourish. Our novel first customer plan would help innovative businesses and give the public a stake in their success.”

According to the report, strengthening the start-up sector means building public confidence in tech, as well as creating Devolution Deals that build on established regional strength in tech.

Liam Byrne MP and Shadow Digital Minister said: "If Britain is to go from superpower of the steam age to a leader of the cyber age, we need to embrace lots of the ideas in this great report. Crucially we need to be reinventing our universities and colleges to become engines once more for diffusing innovation throughout every corner of business. This sort of progressive supply side strategy is the key raising productivity in a way that makes it easier to give Britain a pay rise."

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