Going for Growth: Can We Make Britain Wealthy Again? (Matt Clifford)

Hello radical listeners, it's Eliza Philby here. I'm an author and historian who specialises in generational change. But as some of you may remember, I was a previous guest on Radical.

Now I'm delighted to say that you'll be hearing from me again very soon on Radical, but this time I'll be in the presenter's chair. Amil's going away for a few weeks, and while I sit in for him, we'll be talking about young women, Gen Z. Recent polling shows that their views on politics, economics, the world of work, and of course sex, dating and relationships are radically different from their male counterparts.

It's happened concurrently with a new phenomenon that's being called the femosphere, which, like the manosphere, is an online movement which is highly cynical of the opposite sex and of heterosexual relationships. Luckily, I've got the perfect person joining me to go through it all, Dr. Jilly Kay, who coined the term thermosphere in the first place. But I need your Help. As always, we'll be putting your radical questions to our guests.

So please send us a message or a voice note on WhatsApp to 0330-123-9480 or email radical at bbc.co.uk. Now, on with the episode.

Hello, it's Amole here. Welcome to Radical. These are conversations about the deep global trends changing our world and offering you some radical ideas for the future. You know, one of the reasons we set up this podcast is because I just had this little suspicion, this little nagging sense that.

that perhaps sometimes in the news industry, my industry, my trade, we don't always talk about the really powerful, important forces that are actually shaping human history. And I'm Thrilled and humbled to say that our guest today is someone who shares something of

That sentiment. So we talk on this podcast all the time about decline, about stagnation, about lack of progress, about the problems facing Britain and the world. We've had some incredible people on who have identified the radical changes that are happening for better and for worse, the trends that got us to where we are.

we are today and what will happen if we continue on the same path. And the problem of course is that these problems are very hard to fix. And that stagnation, that sense of decline, that worry about where Britain is in the world.

Is happening at the same time as we're living through the most astonishing revolution, particularly in technology and artificial intelligence. And our guest today is someone who's been on both sides of that divide, and he's tried to collapse the divide. He's worked in technology. As an investor and as an entrepreneur, and he's worked for British governments, both Rishi Sunak and Keir Starmer. He is Matt Clifford, co founder of Entrepreneurs First, AI advisor to

Yeah, Rishi Sunak and Kirstama, author of the AI Opportunities Plan, which has been enacted in full, and he believes the necessary solution to the problems we face is in one sense pretty simple. It's economic growth and And he's got some pretty radical ideas to make Britain wealthy again by embracing innovation, science, technology, and particularly something he knows rather a lot about, AI.

Here we are in a radical studio, two mugs with my face on them, and drinking out of one of them is what can we call him, the most influential man in British AI, the most influential entrepreneur of his generation, Bradford's Matt Clifford. How are you? I'm very well thanks. Thanks for having me.

It's so nice to see you. I've been so excited about this for so long for so many reasons. And one of them and don't worry, you are gonna get to say something over the next hour and a half or however long we're talking, one of them is that I think that you and I might share a certain disposition to the world. Which is to do with the concern that we're not talking enough about the things that really matter.

And if I could just invite you to agree with the thesis of this podcast, Matt, before um you can leave after that. Uh I set out this podcast because I felt that quite a lot of the news agenda is sort of noise. Daily events, arguments about process, scandals that aren't scandals. And we should really be talking about the deep underlying forces that are transforming what it is to be human in a crazy era in human history.

And the top of those is demography, there's climate, there's all these sorts of things. Top of those is technology. I would like to invite you to agree with my thesis. I agree with your thesis. Wonderful. Wonderful stuff. And we'll be back at the same time next week. Thank you so much for joining us. Give me your sense of that, Matt. Have you got a success? I I watched you recently on the Laura Koonsberg show and I've seen great interest.

viral clips that you've done, speeches you've given, public interventions you've made. Um do you think we're talking about the right stuff enough? Broadly no. Um I think that when you look at where we are today, both in the country and in the world

You know, we well actually you and I are probably roughly about the same age, I would guess. And, you know, we sort of grew up in what I think we'll look back on and say is the quiet period. You know, we sort of grew up in the like nothing ever happens period where broadly things just sort of go You know, we model through and you know, like some stuff happened, but you know, the nineties, the early two thousands, this was the like golden period of nothing ever happened.

And now we're in the era where things are happening. Things are really happening. You mentioned uh a bunch of them already. Obviously AI is one of the things I think is the most important thing that's happening.

And yet, you know, AI, even AI, which you know, I think the media is not completely ignoring, but it's treated as this sort of cute sideshow to what really matters, which is like who said what when. And I I just think that It's funny when you read history and you sort of see that actually the degree to which

you know, the people who were there took it seriously is probably the best predictor of how much they got to shape it. And right now I don't think we're taking it seriously and therefore I think we're not going to shape it. So if that's what AI is, and we'll get into the perils and and promise of it in in detail in a moment, one of the reasons it's such a important thing to talk about much more than we generally talk about it, is because of the state of our country.

And what I want to try and do over the course of our time together is kind of plot a really clear connection between the problems that Britain faces with debts and productivity and growth and AI and kind of plot a a radical future basically for this country. We've done the first bit, which is AI. Let's talk about the second bit, which is the state of the country. What is your assessment, as a millennial, of the country that you've spent your adult lifetime in?

It's funny, isn't it? I remember when Millennial meant that you were young. I know, I know. Where are we? I I think that Britain has sleepwalked into economic disaster. You know, the British worker hasn't had a pay rise for eighteen, nineteen years.

if you look at how rich would the country be today if we had grown at the rate we were growing up to the financial crisis, it's equivalent to fifteen thousand pounds per person of lost output. That's a lot. That's like thirty plus percent of um of GDP per capita. And That matters not because oh those people can't buy luxury handbags or, you know, gonna go to Mauritius. It matters because that's what gives us choices as a country. Our wealth is what gives us choices.

You know, if you want to invest in the NHS, we need to pay for it. If you want safer streets, you need to pay for it. If you want more leisure, we need to pay for it. And so I think we are a country that's sleepwalked into stagnation.

And this is really I think nearly all our other problems are downstream of that. That we just are not any longer Telling A story that people believe about how their lives in future will be better than they are now. And without growth, you can't have that. Well, another point about that is people often say Britain's the sixth or seventh biggest economy in the world. That's true, but if you look at GDP per capita, it's way, way, way down. But also it's getting lower at quite a a significant rate.

Against that, some people would say, Well, Britain's not alone, other countries axe have stagnated. Look at Europe, look at Germany, look at um uh Italy. Um yes, there are some economic miracles. One's called Poland, another's called Thailand, Vietnam, maybe, Singapore. But isn't stagnation or sort of relative slowing, maybe even decline, broader than just Britain at the moment?

So certainly true that um there are other countries in the world that have stagnated, but I We're particularly good at it. We're particularly good at it, but also like I feel like that's such a historically bizarre attitude for us to take. Or don't worry that we're losing, there are other losers too. Like I I think

uh about this country's past that we should reflect on and not be proud of. But there's a huge amount that we should be proud of. And I do think this is the country that built the modern world. And we didn't get there by looking around saying, well No one else needs steam power, no one else has built out a big railway network. You know, I I just think that's a totally bizarre way to look at the problem.

Is there a connection then we'll do this as a sort of summary of the thesis and then we'll go backwards in time. Is there a connection between Britain's uh sleepwalking into economic disaster, as you put it, and stagnation, two lost decades? and the extraordinary Promethean potential of AI and is AI plausibly a route out of stagnation? Short, yes. I mean

What we know about economic growth is that there's lots of causes of economic growth, but the most important one is productivity improvements. Can we do more with less? Can the typical person achieve more output, you know, with the same amount of input, i.e. their time?

AI, more than any other technology of our lifetime, arguably, ever, holds up that possibility that we can do more with less. And so yes, this is one of the ways, maybe the biggest way, that we could reignite economic growth in that Okay. I'm gonna dive into this in with tremendous relish and excitement. Just before I do Capitalism. Um you spent a long time backing, working with, leading Britain's effort when it comes to entrepreneurs.

No, there are a lot of people, Matt, who listen to this uh podcast uh who think capitalism's a problem. And there are a lot of people for instance, we've got um a huge number of requests and I think uh we've now acted on them successfully, for us to invite in to come on this podcast an economist called Kate Rayworth.

who is um thoughtful, uh brilliant economist, starts from a position where she thinks growth is not necessarily the solution. And so I want to put to you two things really, see what you think about them. First of all, what do you say to those people, not just Kate Rayworth but others who are fans of hers? The the problem

is the pursuit of growth. That a rapacious, voracious desire for more, more, more has not only led to consumerism, has not only caused the economic externalities that uh mean the disintegration of the planet, but that we need to as a sort of A species and as a country learn to live with less.

I don't agree with that. Um well I first thing to say is to defend capitalism isn't to defend everything that comes out of it. It's to say that, you know, as economic systems go, what do we want? Well, what I want is I want a system that allows uh people to choose uh what they do with their time, how they, you know, make a living, and I want them to be able to choose what they do with the proceeds of that. And I think if you look at the comparative history of different economic systems

capitalism has unlocked more real freedom for people in this country and the world than anything else that we've tried. And so I think the burden of proof is definitely on those who would like to reject that, you know. Yes, there are lots of problems in the world and we should not uh diminish or seek to uh in order to defend capitalism, we don't have to defend all those problems. But what I think we can say is that we say if you zoom out and look at the macro, if you look at things like

Absolute poverty in the world. Absolute poverty in the world has shrunk enormously over the last hundred years, largely because of the workings of capitalism. And interestingly, it's shrunk most in China. Um as they have embraced you know, they wouldn't like to use this word, but you know, capitalism with Chinese characteristics. Indeed a a neighbourly country called India, which has moved something like four hundred million people out of poverty and did so when

Man Mohan Singh, who was the Prime Minister of India, embraced uh FDI, foreign direct investment, when he was the finance minister of India in the early nineties. Okay, so that's capitalism. You know, if capitalism is going to be effective and successful, uh certainly for them for the majority of people and to uh win their consent

Would you agree with the idea that it needs to spread ownership and wealth? Because this will get us into two of the concerns people have about AI for all the um extraordinary uh potential of the technology. Some of the concerns they have are are to do with the idea that you create enormous wealth But you don't have the work that follows from it. We've already lived for the last two decades with um what's known as the diminishing proportion of wealth making its way to labour. In other words

Workers are getting less and less of national wealth, more and more is going to those who already own assets. And the big, big concern about artificial intelligence is that it could create extraordinary amounts of wealth. But if at the same time it destroys some jobs and doesn't replace them, then you get wealth without work, which is a pretty bleak future.

Yeah. So many different threats to to put on that. So the first thing I would say is Actually, the concentration of income, um, the increased share of income going to capital rather than labour is exactly what you'd expect if you had economic stagnation.

You know, like that that actually in order for wages to increase, which is what the labour share of income uh is, we need economic growth. We need to create jobs. You know, this is the reason I want economic growth is not so the rich can get richer. It's so that ordinary people can get a pay rise, which is just not gonna happen. You know, I fully, fully reject the idea that we we have enough money and if we just distributed it differently, then everything would be great.

It would be very weird if we lived at the first point in human history when that was true, because actually the advocates of that position have been making that case for hundreds of years. But actually almost no one would have wanted to live on the perfectly divided uh income that was available in nineteen hundred. If you think about the extraordinary things that we have now, usually the one that people agree with, even

those who assert that all we have is a distribution problem is no one wants the health care that was available in the nineteenth century. Why do we have more and better today? Because the societies get richer, they can allocate more money to these things that we all agree are important.

So you know, i the the truth is I g go back to this idea that wealth is freedom, like national wealth is national freedom. And yes distribution matters, and yes, absolutely there are issues with concentration of power. But actually I see that many of those um concentrations of power happen most when you have stagnation because that's when you start playing zero sum games where it's like, well how do I stop you competing with me? How do I s how do I instead extract rather than create?

But are you seeing in the economics of AI at the moment, we'll get into the technology which has extraordinary promise and and as you say could unleash productivity and unlock productivity in a way that uh increases output per worker and therefore national wealth.

But are you seeing with the economics of AI as currently construed, um trends, uh tendencies which go against your vision of an inclusive capitalism which spreads ownership uh and wealth? And I I asked with that it's under two headlines. 'Cause I worry about um what you would call an AI aristocracy. Aristocracy, AI aristocracy. Yeah. And there's two concerns. One is um ownership.

So before companies become public before people know about initial public offerings, before companies become public, if you have a company which is still basically private, might have shareholders but it's private, like an open AI or uh an anthropic, which By the way, is probably the fastest growing company in human history. Um you have all of this wealth, but it's not owned by very many people.

And if you have this trend in AI where you have ever more of these new companies coming in and they're not public so normal punters can't get uh a s uh a share of it, you basically get an extraordinary concentration of power in very few hands. Now that's something that people who are opponents of capitalism are worried about. If you buy their argument, there's a lot to be worried about with AI as currently construed. I I actually agree with that. So um

So I do worry about concentration of power and wealth with AI. It's one of the reasons why when I was writing the UK's AI strategy for Keir Starmer, I had a big section which at the time was very weird a niche on AI sovereignty because I actually think that there is a huge domestic political economy problem if AI transforms your economy and you have no AI companies.

That is that is a real big problem. And there's a second problem, which is much bigger than AI, which is specific to the UK, which actually ceased to be an ownership society. So the exposure of ordinary people in this country to equities, to owners ownership of companies at all is is horrific. It's much lower than for instance in America. What you're talking about there is the fact that in America

a much higher proportion of households will just have some more of their wealth tied up in the stock market. Stock market being a share of of of lots of different companies. And so as the stock market rises they feel wealthier, which is one reason that Donald Trump is so obsessed with it.

We've got significantly lower levels of investment. I don't mean by that state investment, but individuals, people listening to this, are much less likely to be investors in public companies which they can buy a bit of And that's true by the way of our pensions too. So I've I've become a bit of a pensions absolutist. Must have hit your forties. Well I I I think many, many, many of our problems in this country are downstream of our pensions. So

L let me just give a few stylized facts. So in this country in the late nineties, roughly three quarters of pension assets were invested in equities, in shares, stocks and shares. Today that number's more like a quarter. So we've massively de equitized um what for most people is their single best shot of exposure to to great Uh and in fact we've gone from being a nation whose futures are dependent on growth of companies to one whose future is dependent on

Treasuries paying out their coupons every uh you know, every quarter. I think that's a huge shift. It seems trivial, but I think it has so many downstream effects on how people think about

Whether they have a stake in what's coming. I I think you have to be an ownership society to be optimistic about the future. So first stylized fact. A second stylized fact is as a result, this has huge implications for another thing that people in my industry talk about all the time, which is how come we don't have any, you know, big tech companies? How come they're all in California?

Well, it's partly because, you know, in my, you know, old job as uh as a venture capitalist, I have to go out and raise money from somewhere to em deploy entrepreneurs. Where does that come from? Well it largely comes from things like pension funds. You know, pension funds, endowments, foundations.

I've raised successfully close to a billion dollars of capital into venture funds over the last fifteen years, of which zero dollars have come from UK pension funds. But our biggest investors by far are US state pension funds, with whom I have no connection.

I'm very lucky that we're very good venture capitalists and we've done very well. So we're making money for the pensioners of various states in the US. But my dad, who was a social worker his whole life and has his pension with the West Yorkshire pension scheme, has zero exposure. To uh venture capital through that. That may not be true, but like as in on average, most most sort of um local authority pension funds have zero exposure to venture capital.

People listening to this will have heard maybe of the Ontario Pension Fund being this and you're like, What is this thing? So what you're saying is foreign pension funds, often we'll say a Canadian pension fund

Well basically a kind of a an enormous kind of investment scheme uh through which people who are invested in that scheme can get rich over the long term and that fund will have lots of money to play with and it might come and say to Matt Clifford, Hey, can you uh we'll give you a bit of money in return for a share of this company.

Uh if number ten will call you and said, Matt, we need a radical idea to fix pensions in this country. You've done this AI fifty point plan and we're looking forward to hearing what your discussion with the mole led to on that. But pensions, how would you go about fixing pensions?

So I think we have I think we have a lot of the right ideas. So, you know, the Mansion House Accords which are about trying to increase the share of UK pension assets into unlisted equities, into private, you know, uh companies. These are the right things. It's just going incredibly slow.

And I think this comes to the pathology that to me is behind your very first question about stagnation, which is why is it so slow? Well, I I think we have this very Very challenging problem in our country, which is it feels to me like we've made a Faustian pact where we try and protect ourselves from any downside. At the cost of any upside. You talk about planning.

Well, I actually think it's the pathology that runs across planning, across infrastructure, across energy, uh almost everything. We've got to a position where uh and you know, these are very old ideas in political science, there's not radical but We see the person that loses out from any change as a real person whose voice must be heard, but we see the people who lose out from non-change, who lose out from stagnation as statistics that can be ignored. So interesting.

And so whenever anything is is a problem, you know, like obviously if you want to build a house that overlooks my back garden, that affects me a lot. I'm gonna make a loud noise about it. And you can get on the local T V bullet and do it. How can you put on the T V the person, the fifteen year old who's gonna have to work in a you know box room instead of having, you know, a proper bedroom because there aren't enough houses?

Builders and plumbers and suppliers who don't get to make that house they're just a Statistic. And you take that and you you can extrapolate that over nearly everything. So, you know, when we talk about pension reform, of course there are valid objections to a radical uh upheaval in our pension scheme. But we have this scene versus unseen. The people that want to stop change are very visible, they're concentrated, you can put them on T V. The people who benefit from change are diffuse.

They're not organized. Why would they be? They don't know each other. Um and so we just we've now got to this position where we're a vetocracy. Like it is very, very easy to say no to things in this country. It's incredibly hard to say yes to things, and that's start You know, by the way, in number 10. Like my experience working in number 10 was a place where it's so hard to make things happen because everyone knows someone who will object.

Is that the problem? I'm really interested in that'cause I you know, as you know, I cover this stuff for a living. People sort of say the trouble with number ten is you've got huge churn, turnover, not necessarily bad people, but there's a level of incompetence.

I I don't think it starts with this number ten. I mean we're talking about a twenty year problem, right? So I I'm very uh a bit like your f opening observation. I'm I'm loath to sell it's this person, it's this, you know, this personality for I think this is structural. I think it's that we've got to the point where Uh not to blame your colleagues in the media, but anyone who is upset about anything Is it a hair?

Yeah, I guess a hearing. But I I really think this problem of how do we make the voices heard of the unseen um uh people who lose out from stagnation, that I think that's a huge problem. There is no political constituency for growth. I got I got told I remember very memorably by a very senior um political figure who I won't name that like, you know, growth is growth is deeply unpopular. We mustn't talk about it. People don't think growth is for them.

And it's funny how we now want to talk about cost of living all the time. Quite right, we have an affordability crisis in this country. But the affordability crisis isn't actually about prices, it's not actually about inflation. The inflation that we've had in this country apart from in twenty twenty two is not historically unusual. The problem is waste stagnation. Of course we have an affordability problem. No one's had a pay rise.

I'm not suggesting it was Keir Starmer who you're uh on WhatsApp speed dial with who said that to you, but Keir Starmer would say that he um you know, he said growth was his number one mission. Well, if you have a number one mission, then that means you have to make real hard traders. And it's not a good thing.

Exactly. And and and you know, it is not um it's not a comment about this Prime Minister or any Prime Minister, but you know, the the truth is your priorities are what you are willing to hold constant while trading off other things. So if growth is our number one priority, then we have to be willing to upset people whose number one priority is not growth. Like you you cannot you cannot actually

have growth without without people objecting. And w one of the reasons I object when people say, like, oh, you know, growth is for the rich. Um, which, you know, and and the and there's there's some people that, you know, as you mentioned, I I I gave a speech on this last year and

I think I'm very self-critical person, I obsessed about the, you know, the negative responses to it. And one of it is like, this is just trickle down economics, this is just like Liz Truss with better PR or whatever. And it's like, no, actually, some of the people who will object who would object most to a truly pro growth program

are the currently rich. They're the people that benefit from I mean, planning lawyers, um, people who make their income through re you know, renting out um artificially restricted um supply of housing. Like this is not rich versus poor. It's about extraction versus creation.

You gave the speech you're referring to I think was at uh by the way, it went hugely viral and I watched it and I watched the entirety of it, I actually searched out and read the speech in which you talked about Britain's scientific

heritage and you mentioned a huge number of uh truly great um inventors, pioneers, engineers. I note that you took pains to make sure you covered all bases, so you spanned centuries, you talked about women, you talked about men. And this was I think for a group called Looking for Growth. Right. Which casts itself as an impartial non party political uh organisation, which I think is why you who do the same.

uh were associated with it. But it is also true to say that on some social media platforms anyone who wants to sort of champion growth or fight decline I think is quite often associated with a kind of nationalist concern about the collapse of Western civilization and therefore the fight of decline. Just why don't you in this safe space for radical ideas, why don't you say why you gave that speech and what your argument was?

Uh the the reason I I gave the speech is that my most like radical belief is I do believe this can still be the richest country in the world per capita. Um you know, I think actually the The funny thing is, you know, if you were an alien coming to earth and looking at the world, you'd say the weirdest country in the world economically is the UK. And the reason it's weird is that if you were looking at textbook like where does economic growth f come from

you have the like the basic layer of gotta get the rule of law, right? Okay, fine. But then you know, you get to like the kind of intermediate layers of like infrastructure, you know, et cetera. The icing on the cake is like frontier industry is like really, you know, difficult knowledge work.

The UK has all the hard bits right. We have the most incredible frontier industries in the world. We're just really messing up the middle layers. We're just not building housing, we're not building infrastructure, we're not building, you know, energy generation. And and so I my belief is like

This is an extraordinary country. It's a country that actually built the moral modern world. I I think my more controversial is I also think it is a country that Um, our net has actually has an extraordinary moral legacy in the world that that I really believe in.

And I I've been very lucky in my life. I built a business that turned out to be way more successful and valuable than I expected. And so sort of at the age of like in my late thirties suddenly was like, Well, I kind of have the opportunity to be able to kind of do public service. I did uh a couple of stints in number ten for first for Rishi Suna and then for Keir Starmer.

and and came out of that both kind of energized by what's possible in government, but also pretty depressed by, you know, like where we actually are. And so I I wanted to give that speech to try and tell a story For a group of people who I think are dispositionally inclined to the narrative but don't hear it, that like actually we can't this is this is possible, this is true.

But to what extent do you think that one of the defining challenges of today is the Conflict and it is a conflict, not just a inconsistency or incongruity, but the conflict between the speed of technological change and innovation on the one hand and the slowness of modern states and bureaucracies on the other.

I think that is an issue, but I think it's overblown. And I've been very lucky to be part of two what I would call government startups. One is ARIA, where I'm the chair of the Advanced Research and Invention Agency, an agency for funding and managing uh breakthrough research. And the other was the AI Security Institute, which was set up in twenty twenty three to build state capacity and understanding the the the scale and power of AI systems.

And I've invested in hundreds, maybe now a thousand technology companies, and I would truly say that both AC, the I Security Institute, and ARIA move at least the pace. of the best startups that I've invested in. They have extraordinary leaders in public sector leaders who would absolutely smash it in the private sector. Um they have the same talent density of the best startups I've been involved with.

Um now they're doing things that um they're doing new things. It's not like we, you know, in either of those cases went in and like fixed the NHS. I'm not I'm not claiming that like all the public sector can move at this pace. But I have seen these, you know, what we would call in my world existence proofs that actually the s there's no reason why the state has to be slow.

Some of the other areas that you highlight, we've got huge challenges. One of the central arguments of people who, for instance, would be dispositionally inclined to support looking for growth is This is a country that struggles to build stuff. And it struggles to build stuff because of planning. And it struggles to build stuff because of planning because we have this

As you say, this great interest in all the people that say no, who have a kind of veto, and we don't have this kind of let's go and do it. There's a side issue here, which is that, you know, people say, well, the Chinese state is, you know, the Politburo of the Chinese Communist Party is mostly engineers, whereas here we're run by lawyers, quite literally in the case of Keir Starmer.

But we don't build stuff. If you look at Size Well C, if you look at HS two, if you look at the uh Lower Thames Gateway, and on and on it goes. That's one area where you'd say the state is just not able to get Cartsware stuff done. So I think there's two different things here that we have to like decouple and and address. So there's something about state capacity.

And uh which is what you're touching on. I'm actually pretty optimistic about state capacity. I think when we know what we want to do and what trade offs we're willing to make, we can actually go really fast. And, you know, I I think we see that in

for example, in the parts of the state I just mentioned, but actually in lots of things that I have nothing to do with, you know, I I think in national security, I think in our special forces, I think in you know, certainly in parts of the NHS, we we have amazing state capacity. I think the thing you're actually talking about is how do we resolve trade offs? And, you know, you talk about size well C.

I think this is right. You know, the environmental impact report for for size well C was forty-four thousand pages long. We don't have to write forty thousand page environmental impact reports. No other country in the world does that. You know, that's no, you could say that's a capacity issue. I think it's actually like, are we willing to take the hit on this other stuff that isn't building?

That's actually a political question. That's not a state capacity question. And I think the answer the revealed preference of successive governments is no, we're not willing to take the hit. We we we there is a constituency that wants us to write forty th four thousand page reports, obviously. Planning Louis?

Mm now are we willing to take the hit of saying actually that doesn't make anyone safer? We've got very into theatre in this country. So I think one of the symptoms that you see a lot is that we play whack-a-mole with with um with with bad outcomes. So whenever anything bad happens

we write a very carefully tailored new rule to address the symptom. But sometimes it's necessary. I mean post Grenfell, I mean what was going on with cladding was abhorrent. And if if and some people say, Well, if that slows down future building developments but avoids a Grenfell, obviously that's the that's the But this is a great this is a great example'cause Grenfell was truly horrific. I think it was like one of the most

maybe the most viscerally painful example of of of failure in in sort of our lifetimes or maybe it's just recency ish. Yeah. That was nearly ten years ago. I mean truly horrific and and and kind of unforgivable. Um But this is exactly what I mean, is our response to it.

doesn't actually get to the root causes. It it says, well here are some of the like surface level phenomena that looked bad, so we'll address those. But what the response to Grenfell has done is added a hundred thousand pounds to the building cost of every house in this country. So the government has a target.

of one and a half million new homes, right, every year. I think the twenty four, twenty five is not going well is two hundred thousand. Now I'm not I'm not blaming that all on the on the regulatory response. But but the you know, when I speak to people who really know housing, they are all

horrified by what happened at Grenville. They all believed that it was it was totally appropriate that we had a response and they all think that the response was both f failed to address the actual um the root cause problem Absolutely enormous costs to, you know, one of the biggest crises that we that we have in this country. So Other than following all of the recommendations of your AI report, which the government did, how'd we stop

failing in that sort of way when it comes to artificial intelligence and make this country the home of I mean it's not gonna be the home of artificial intelligence, that might be on the west coast of California. You did this report, in fairness to Keir Starmer, he accepted all of your recommendations

He was great. Yeah. I mean, honestly, I I was so encouraged by his and his tea You know, it's it's it's funny uh having worked for Rishi Sunak as a non partisan non political appointee and then worked for Keirstarmer as a non partisan non political appointee. They're very different people, but I actually think, to their great credit, they both actually saw that this was an issue that even though especially at the time was not in the headlines every day, was important that we seize.

Uh m my my sort of self review on the AI action plan is that um all the things that the government could do very directly, it's done actually pretty well. The things that have been hardest are all the things that touch on the things we've been talking about for the last ten minutes. Well, so like one of the flagship policies of the uh action plan is AI growth zones, which is the idea that we need we need to have domestic

compute infrastructure in the UK. We need the data centers that will run these AI models. I will have a s as a slight side note, I think it's always very tempting and there's definitely a view in Treasury like we don't actually need domestic compute. We can just buy compute on the open market in And that's wrong because

Well, it really reminds me of this that and to his credit he admits this is one of his big mistakes, but there's that famous clip of Nick Clegg in twenty eleven explaining why we're not going to build nuclear, which is basically won't come online until twenty twenty two. Every generation pays the cost.

of what the previous generation refused to build. And it's always tempting to believe that all the major inputs to your economy are these market goods that you can just buy at international prices on the open market right until you get a Ukraine and energy costs, you know, kind of go up. My view is that AI inference, in other words using these models is going to become Maybe not quite as big as energy, but like one of the most important inputs to our economy over the next ten years.

Can we buy it on the open international market? Yeah, most of the time. Right up until you can't. And then you really, really, really wish you had domestic compute. And so I really believe that building this out is very important.

To uh the Prime Minister's great credit, you know, he went hard on this. If you go watch his uh speech announcing the A Action Plan, he talks about this, he's given multiple uh interventions on it. Why haven't we, you know, moved as fast as I would have liked? Not because of him not backing it, he did back it.

All the things that we've been talking about. The other problem we have, as you know very well, is we have the highest uh electricity prices in Europe. Um so On electricity alone, if you're an international investor and you have a choice of do you want to build a frontier AI data center in the UK or in France?

I spoke to uh can I s uh can I say this? I spoke to an AI giant uh and uh someone who uh had just been in to see Whitehall and he said he just had an hour and a half with the Treasury and them say, You gotta invest here. You're you're an Englishman, you've got to invest here. You might work for a company headquartered in California, but you gotta invest here. And he said, Guys, I can get electricity in France for about a third of the price. So they took your recommendations, they backed it.

Some of these things are going to be very, very difficult to do. What's the big thing where yes, you've got frustrations, but what's the big thing where you'd say to the Prime Minister and say to whoever's in charge? It could be a reform government in a few years' time, it could be a Tory government, could be a weird coalition, who knows? What's the thing to do now to make sure Britain wins?

So I do think the single biggest thing is adoption. Um what I mean by that is I really worry that the UK is in this knife edge position where If you go read the government's industrial strategy, whatever you think about it. It's very clear that the place where our growth comes from, the industries where our growth comes from, are industries that will be transformed by AI.

It's life sciences, it's financial services, it's professional services, it's the creative industries. Like th these are all industries where AI, I think everyone agrees, is gonna change them completely. And so our entire economy is highly, highly geared on whether those industries adopt AI rapidly or not.

We are in a position where if they do, I think are we could see enormous economic tailwinds, you huge growth from those industries adopting. If they don't, they're also all industries that have international competitors. And so you can imagine a world where the city of London booms if it adopts or shrinks if it doesn't, because

You know, there'll be other countries if you look at our track record of tech adoption in the UK, unfortunately, at least in recent years in digital tech, it's it's pretty poor. We're actually slower tech adopters than most of the rest of the OECD. And so my big message is Slightly contradicting our earlier thing about concentration of power. If you look at where do the benefits from general purpose technologies accrue historically.

Yes, there are definitely benefits to being the people that build it, but actually by far most of the benefits come to those who adopt it. Yes, it mattered to invent the steam engine, it mattered way more to build out the railroads and like connect every town. The big opportunity for the UK is to be the best AI adopter in the world. And that I think is where I would like to see just enormous amounts of energy uh as we as we start to see that actually you can now really do things with this.

I really hope you're enjoying this conversation with Matt Clifford. What a fascinating man he is. If you are, please do subscribe to this podcast on BBC Sounds. That way you won't miss future episodes. And if you do subscribe, make sure you've got your push notifications turned on. And that way you will get an alert whenever we publish a new episode, and you will never miss out. Right, back to Matt Cliffin.

What does this mean for workers? There's a lot of people get in touch with us who kind of want a kind of practical takeaway for what they need to do to prepare for this world. And I said that one of the concerns about AI, and by the way I say this is you know as a as a technophile and someone who's

Extraordinary excited and I use it on a daily basis and think of it to you know Promethean. I don't like the word miraculous because miracles don't happen. But anyway, it's it's incredible what you can achieve. One concern about AI is ownership, excessive concentration of ownership, and as you say, that's in a sense downstream the fact that we've moved away from being an ownership society, and that's thinking about investment and pensions, all that sort of stuff.

What about if AI creates a huge amount of wealth but it it actually eliminates some jobs? Now I should just preempt what you're about to say by saying two things. One is Obviously we don't know which jobs. You know, we you just can't know, right? Because that would be the future. And if you knew the future you'd be uh even richer. But in terms of the jobs that AI is likely to come for, the best guess we've had based on evidence of what the jobs that are displaying at the moment.

That's what Dario Amade, the boss of Anthropic, said on this very podcast. I really want people to hear this clearly. Which jobs do you sense are most vulnerable in the coming years? Well I think we need to be really, really clear here what we mean,'cause I think there's two different things that people mean here. Sometimes people talk about this meaning is your current job in your firm right now at risk? And sometimes we're talking about at the macro level, will this category of jobs exist?

I I think that there is gonna be a lot of disruption and I I think for sure we're gonna see individual firms um fail, um, change the shape shape of their workforce, have to change the shape of their workforce a lot, and that will cause uh real problems and we need to be ready for that. And I don't think we're quite ready for the level of of disruption that's coming on that. So that's point one. I'm actually quite optimistic at the level of will there be jobs for entry level white collar workers?

Almost certainly in in you know, in in to me in any conceivable world, it might mean that our labour market has to be a lot more flexible because, you know, individual firms will rise and fall more quickly.

Um but I don't buy the narrative that there'll be no jobs. I do think things will have to change a lot. I I have to say I'm not fully persuaded there's so I I started my career in professional services. Uh you know, it's it's a big part of this country's economy. There is this narrative that Oh you know, like we don't need so mu I wasn't a lawyer, thank goodness, but you know, we don't need so many junior lawyers to read through everything so there won't be Il legal consultants.

Then how do we train the next generation? I feel this is a slightly weird, like, failure of imagination. Like there's like so much of professional services is actually about things that may always be human, certainly will be human for a long time, things like trust, authenticity, legitimacy. Um these things are not gonna go away. And the way that if we were trying to design from first principles a way to learn

how to convey those things. It wouldn't be by reading thousands of pages of legal docs. That's just how we do it today. I'm very skeptical that that's going to remain It's useful to think of this uh in the way that Mark Andreessen, who's a uh legendary uh Silicon Valley uh thinker and investor thinks of this founder of a firm called Andri San Horowitz, where he says that the atomic unit of work is not the job, the atomic unit of work is the task.

And the concept of bundles or bundling which people in in the news industry will be familiar with'cause there was we've just lived through this grand unbundling, it's quite useful here. If your job is made up eighty percent of tasks which are repeatable cognitive endeavours. So, you know, processing information or solving some mathematical quandary, those tasks might be done more efficiently by an AI that doesn't take holidays and doesn't

I have sick leave. But you might in the remaining twenty percent be able to, you know, have a very successful job with that remaining twenty percent, which is more to do with human skills, uh intuition or or or um uh dependent on trust or empathy that kind of can take up the rest of your job. So unbundling jobs into tasks that are repeatable cognitive endeavours and those which aren't is quite useful. But in terms of the jobs that are going to be created Have we seen any evidence of that yet?

This is I think one of the hardest arguments to have, um, because it is Totally understandable why people want the burden on of proof to be on people who are less worried about the jobs apocalypse. But of course. The way I always think about this is I'm the eldest of four.

Um, I think all four of us, you know, I think often about my conversations around the dinner table with my parents being like, What are you gonna do when we grow up? I think all four of us are doing jobs that either didn't exist or would have been totally inconceivable to us. you know, in the late nineties. Um I really feel old when I w when I say that. Um and so it's like

In some ways, yeah, I I get the impulse to wanna be like, what is the job that is there? But I think the burden of proof is on you know, if we look at the history of productivity increasing technology They've been very, very good for humans. Like I would argue that nearly everything that's good that's happened to our species has come from productivity improving technologies. And we've tended to find jobs to go with them in the past.

Yeah, and I also think th there's lots of things wrong with this analogy, but I think it is worth dwelling on for a moment is to think about what can we learn from the very first um job. That got completely dominated by AI. And it's a sort of sniche one, but I think it's an important one, which is check.

So in nineteen ninety seven, you know, as is well known, Gary Pascal, deep blue right. And so, you know, if we were having this debate then with the same sort of set of assumptions, I think it would have been very tempting to say, Well now we know that Yeah, computers can completely dominate humans in chess. Chess is gonna shrink.

There will be no role for humans. Chess today is way bigger than it was in nineteen ninety seven. Way bigger. Um chess. Um not well. Um sadly not well enough to play with anyone who can play well. I think my seven uh my eight year old is starting to be a lot better than me. Um but you know, what's really interesting as well is that as far as I know, even though uh the best human chess players, you know, have sponsors today, I'm not sure even I guess you know.

No one has ever paid to watch a computer play a computer in chess. Even though the computers are way better than Magnus Carlson. Chess is niche, it's my you know, I'm not I'm not trying to pretend the whole economy is gonna look like that, but I think it does show that it's very hard to build good intuitions about what happens when a job gets fully automated. So

One related concern which I just wanna reflect on, then we'll get into some of the extraordinary positives, is people worry about what's gonna happen to tax receipts. And the reason they do that is because it this is partly gets into technical stuff about how investment income and if we're all in the future gonna have to just be investors much younger, which might be a good thing.

Uh where investment income is generally taxed at a very different level to uh wages or labour income and that might need looking at. But there's another thing which is that if you do lose in the short term through creative destruction, lots and lots of jobs.

You lose potentially quite a lot of tax receipts and just in terms of this sort of worry that people have about a kind of new AI aristocracy, aristocracy, uh where ownership is concentrated, where work is no longer being created in the same way, if you lose tax receipts then it poorer people who tend to r rely more on public services who potentially have the most to lose out. So I agree with this. This this is why AI sovereignty is important. So What do you mean by...

I I will I will explain and I'll try and be really precise, but let me let me kind of give you the the the direct answer to previous questions. So For me, part of the reason the sort of modern liberal state exists is to help us manage these transitions, which are really disruptive. And I think we have collectively decided that we want to provide

We we want to dampen the variance for individuals as they go through this. Ideally we don't dampen the upside at the moment. I think we are dampening to that too much, but we we we're trying to like prevent the shock. that uh come through these changes, uh damaging the lives of individuals too much. And that's why we have a welfare state and, you know, this is like an eighty year project, hundred more than that. Like dates to the start of the twentieth century, right?

So That works really well when you have technological change that creates a lot of wealth in the country, that then means that we have more tax receipts that we can then choose how to to distribute. That was what Wilson's white heat of technology was about. That was domestic goods, white goods, uh gave women the chance to enter the workforce and at the same time it created more tax receipts.

Exactly. So we grow the pie and yes there are people that lose out from that. And our job is not to therefore not grow the pie, but to use some of that pie to to cushion the the negative impacts on the w from the people that have lost out. I think what's really challenging about AI

And I think there's a very visceral way to bring this to life, which is to look at what was the first speech that J D Vance gave abroad after he was elected? A lot of people think it was the mu Munit Security Conference where he told Europe off for everything. Paris AI course. at a Paris AI conference, and he had this very memorable line which is the future of AI is American models running on American jets.

Well that's fine, except it does suggest what's fine for the US what it suggests is that actually what we're about to go through might not have the same political economy characteristics as what I've just described. It could be that the pie grows globally, but far too little of it grows in our country. And so we actually don't have yw'n ymwneud â'r fysgol ymwneud â'r fysgol ymwneud â'r fysgol ymwneud â'r fysgol ymwneud â'r fysgol ymwneud â'r fysgol

So for me this is the advert a big advert for two things. One for AI adoption. We need to make sure that the benefits are happening here. If we actually have the nightmare scenario where we don't adopt and our growth industries are outcompeted by faster adopting uh counterparts in other countries, we lose tax receipts at exactly the time when we need more headroom in order to cushion um the the blow for for people that lose out. And it points to AI sovereignty. What is AI sovereignty?

AI sovereignty is simply the idea that this is a strategically important industry where we're gonna need some domestic companies that are winners. And then we can be masters of our own destiny in it. It's not the same thing as self sufficiency. That is impossible, may not even be desirable. I think sometimes

people immediately uh to me that's a straw man. Like obviously we're not gonna be self sufficient. The US is not self sufficient in AI. Um it's dependent on all sorts of companies all over the world, including many in Europe. Um I think Even China probably will not be self-sufficient in AI. So it's not self-sufficiency, but what it is saying is how do we have enough?

important AI companies in this country for three things to happen. One, that we have a seat at the table as international governance questions on AI are going on. Two, that we actually have direct bargaining chips as we negotiate with our friends and allies, including the US, um, on these questions. I've been on the other side of the table with both administrations and realising how our lack of uh chips to play, um, figuratively not uh. Um

Yeah, is a real problem. And third, so that we have um a uh we have a safety net of having enough growth of enough value accruing here that we actually have these options, these political options around how do we distribute the gain. I have two specific questions and I want you to talk to two specific constituencies, please, about them. The first is that one point one million neats. A lot of them listen to this podcast.

What do they need to do to and they most of them want to get off of welfare, to get into work and you know, we're talking about young people here by the way, eighteen to twenty four, who should be in the prime of their lives.

And they could be living in places um, you know, which are attached to big cities. It could be rural poverty, which is an issue we want to get into in this podcast in a big way. Can you just talk directly to them for a second? What do they need to do to win in this AI economy? I'm not pretending that it's easier, I don't wanna be glib, I don't wanna be one of those tech pros that's like, Oh, just become an AI guy, you'll be fine. But

Uh, I do think that there is something about this technology, despite everything that we've said about concentration of power, that is actually really liberating. And they they actually do give you superpowers in your pocket. You know, honestly. People like you and me, who let's be honest, you're we might be, you know, talented in some dimensions, but one of our the things that has been helpful for you and me, I suspect, is just sort of a verbal fluency, an ability to

Talk about ideas, memorize things. AI really democratizes that. Like actually, you know, Claude is a lot better than I am at most of that stuff. Anyone can use that. There is a free version of COD. There is a free version of Chat GPT. I I again I'm not glibly saying, you know, if you do that you can be a successful BBC um uh journalist. What I am saying is

The best way to give yourself a real shot in this era is to be an enthusiastic adopter of AI. I think you have to go down the rabbit hole. It is shocking to me, and to be fair, this is mainly sort of in invert commerce elites um rather than rather than NEETs, for example, who tried it once in twenty twenty two, didn't think it was very good and sort of decided it's it's not for them. I think that is not a plausible position to take.

If I may say in case I get accused of um uh discriminating against old people, I would say that actually particularly I would say that to older people who are worried about technology as well. There are lots of free tutorials, just go on to YouTube or other video search engines you can find the stuff. I say this

uh talking to my mum who does who's the most amazing woman that ever lived and does kind of voluntary classes for people where, you know, in her community groups in South London she'll sort of show people this technology and they think this is absolutely incredible. I can help it book me a holiday, I can sort of Uh work out where I want to go, I can save time, I can do my weekly shopping list. Okay.

Actually let me just build on that quickly because I think one way in which we've built structural unfairness into this country is actually making the state extraordinarily difficult to navigate for the least well off people. You know, it is incredibly hard actually to navigate

universal credit. It is incredibly hard to work out what you are actually owed. Uh it's incredibly hard to work out what form you have to fill in order to undo some structural unfairness. And actually AI here is a great equalizer. This is actually one of the things that

you know, Chat GPT called Gemini is really good at. And I do think there is this Uh not not to sound too conspiratorial'cause I don't think it's a conspiracy, but I think, you know, the country is run by people who are really good at reading forms, writing form filling out forms, knowing, you know, like How to play the bureaucratic game? I think some people call them the lanyard club.

I d I d I don't wan I don't want to get too but I really think that this is one of the ways in which AI can be a really great equal. So the second constituency, I'd love it if you could talk to you directly'cause to some of these people you are

a hero is the people where you grew up alongside uh in Bradford. Yep. You're from uh Bradford and one of the huge concerns that people have about the modern economy is that, um to quote uh a remarkable young man called Joe Seddon, who has sat there uh just a few weeks ago

runs a a tech platform for social mobility called Zero Gravity. Uh and he said that in Britain geography is destiny. Uh we have uh this isn't on you, but we have a a particular and extraordinary for historical reasons, uh problem with regional inequality.

And there are some people and by the way lots of people in Silicon Valley who have a very, very clear message about this. People like um Chamath Palahapitaya, who's a an influential uh VC, you probably know him, and he says The honest advice to young people is go to where the action is at.

And I say this as a South Londoner. I'm very conscious that people might not like me saying it. Um, but I've realised as I've grown up and I've taken a very close interest in social mobility and life chances and meritoxy, whatever you want to call it. the extraordinary weight of opportunity that comes with living in Britain's capital city.

For young people living in Bradford, is AI this kind of great equalizer because you've got these superpowers in your pocket, or is the message bluntly, truthfully, honestly, that if you want to maximize your career chances, you gotta leave? Well I did grow up in Bradford um and I I I went back there in October and and actually in some ways m marvelled at how much it's changed for for the better. Um, I do think it's a place where actually economic opportunity is still uh very limited, as you say.

Here's what I would say. I I I think if I like intellectually, honestly, with the world with the country as it is today, it is really hard to escape the economic logic of what economists would call aggregation. You know? Um it's really, really hard. uh to avoid the fact that yes, economic opportunity in this country is is extremely concentrated in London. Does that mean you should leave? Maybe.

Um, but to me the reasons for that are also really addressable, you know. So part of the reason that you would need to leave Bradford rather than just sort of um But live there and take a nation a national view is'cause we have really poor transport infrastructure to Bradford.

we've not built local transport infrastructure for that uh there for a long time. So I mean the truth is that if all you want to do is increase your income, then yeah, I mean like it's just an economic fact that that moving to London is probably one of the best ways to do that. But that's not the aspiration we should have for this country. It there's a difference between like what is the what is the correct

advice today and what what normatively should we want. What we should want is for our, you know, cities that are, you know, between a hundred thousand and a million people to be amazing places to live. And by the way, as you doubtless know,

If you try and de decompose what are all the reasons why the UK hasn't, you know, got the same productivity as Germany, for example, it's actually that our second, third, fourth, fifth, six, six are just nowhere near as productive as that. That's the solvable problem. And it's back to all the things we talked about.

So Ed Balls has done some remarkable work. Uh basic Harvard, where he w actually went in the nineteen eighties. He and some co-authors at King's College London have done some amazing work. on regional inequality in the UK, which is worse than other countries, has gotten worse over the last four decades, whereas in other countries it's gotten closer. And the two things that he always lights on as A, Britain doesn't have that second tier of

Uh mega cities. Obviously it's got second cities, Birmingham, Leeds, Manchester, Liverpool and so on. But they just don't compete economically with London and he puts a huge amount of weight in his analysis as you do on transport links. I wanna just mention one other um uh huge externality of what we're talking about, a negative consequence.

The people who listen to this podcast who want us to get Kate Rayworth on and I hope she will come on soon might also say that the environmental and ecological cost of AI is A unfathomably big and B It's so big that we ought not to not bother with it, but we ought not to to try and make ourselves world leaders. And they might marshal for their argument the fact that data centres are not just power hungry, they're kind of cities in themselves.

How do you approach that problem, the environmental cost of this technology, which in your analysis is our best hope of being rich and great again? I think there's a... Well, I I I want to start by saying obviously one of the other great challenges of our time is that for a long, long time now we've allowed the negative externalities of

you know, industrialization uh to to run wild. And that's why we have a a big problem in climate change. Um and I'm definitely not, and the reason I'm stressing this is because of what I'm about to say, I'm definitely not a climate change denier. Uh, it's really important. It's one of the b is is, you know, one of the great challenges of our time. However, the point of civilization is not to reduce

uh our energy usage. I think degrowth as a as an ideology is like deeply inhumane. I think it misunderstands what the purpose of what we as a species are trying to do. So w when people say, you know, the the ecological impact of AI is is is too high, I always say like compared to what? You know, compared to what? It's actually, you know, one of the good things about capitalism is that it

in theory, the price system allows us to allocate um resources to their most valuable use. And actually if AI allows us to stop doing a bunch of other things that are way more energy intensive, that could be exactly the right use.

That said, let me let me also like, I know some people, going back to your question about what should NEETs do, I know especially young people who are totally paranoid that they shouldn't use AI because of their individual environmental impact from using it. This is not something you need to worry about. I'll give you an example. If you eat meat, stop eating meat way before you

So this great stat um which I've I I have uh double checked is true. If you have two people, one of whom is uh vegan and uses uh uh and uses AI uh every minute of every day without ever sleeping. And another who eats the average amount of meat that uh um a UK citizen eats.

Which has the worst environmental impact, the second by f oh sorry, it never uses AI. The second by far. Like you just cannot make a dent by stopping using AI in your own environmental footprint relative to just the things that like really matter. You know, you If you boil a kettle

Probably more than a heav that's more energy usage than a heavy individual user of AI in a day. Maybe not the most extreme, but like an uh you know a typical heavy user of A. How do you reconcile that with the warnings we hear about how power hungry these data centers are?

Well, but remember, these are these are where we're training these models and then we get to spread that cost over absolutely enormous numbers of people. You know, so ChatGBT alone has about a billion weekly active users. And so like yeah, it's it's enormous, but that's because the world is enormous.

Uh and it's one of the th one of the great hopes of what you're doing at ARIA, which is is part of what you do now, but it's an incredibly exciting thing. For those who don't know, it's it's based or or it's inspired by uh an American program called the Defense uh Advanced Research Products Agency. DARPA. DARPA, that's it. Which was this kind of it was of an era with moonshots and exciting science fiction about the future. It was it had a pioneering spirit which tried to envision

an amazing future. And ARIA is trying to do that in the UK. What an inbox you must have. I mean, it it must be amazing getting emails on a Monday morning from people saying, I'm just trying to do X. And the X might be, well, I think we're two years from a vaccine for cancer. Yeah. Or we're kind of you know, quite soon we're gonna be able to use AI to massively reduce the environmental impact of uh tidal energy. What's what y what's Matt Clifford most excited about right now?

So so you're absolutely right. I've had this enormous privilege of first spending fifteen years uh entrepreneurs first, meeting entrepreneurs that have these crazy ideas and and and then now the last four years as as chair of ARIA uh seeing the the scientific frontier. Um and as you say, one of the programs that we've invested real money into

Is this a program on energy efficient uh computation, so energy efficient AI? It's certainly true. The thing I would absolutely concede is that we have not optimised. the way we do computation today to minimize environmental impact. Um interestingly though, and again this is sort of one of the joys of capitalism, because the energy cost of of AI uh for individual companies is becoming one of their biggest expenses. There are enormous economic incentives to reduce that, um, which is great.

And one of the things that that will come to is new kinds of chips and we' we we're we're funding the development of of of some of them. By the way, another great way that we could have more AI sovereignty in the UK is for some of those chips to be designed and and built in the UK and we've we've got great examples of that of that already happening.

Actually though, I think for me in many ways the stuff that I get most excited about ARIA is the stuff that I know least about. So I do know something about AI. But you know, ARIA is um uh as you said, it's it's it's broad based breakthrough science. Um and it's pre commercial so we're typically not it's not a VC. It's typically trying to find the very best researchers either in universities, sometimes in companies, in fact increasingly often in companies.

to to to come together and we like orchestrate these research programmes that um that end up we hope having these huge impacts. Now you mentioned DARPA, which you rightly say ARIA is inspired by. to to give listeners a sense of like what success would look like, um, no pressure, you know, DARPA's uh research directly led to the creation of the internet, uh GPS

And mRNA vaccines. So like it's it's a high bar. Um and that's what we want uh Aria. We want to find things that will create trillion pound industries of the future and have comparable impact to that. And solve big problems. Huge problems. It's a really interesting thing that you know, if you um

follow some of the people in this space and have done for a long time, uh, even before it was kind of fashionable too. It's really amazing that watching them talk about science in a way that was almost pre-political. And I want to give you two examples of that. The first is I really strongly recommend everyone listening to this podcast.

looks online at a speech given by Dominic Cummings in twenty fourteen. I can't remember if this was before or after David Cameron called him a career psychopath or where he was on that particular trajectory, but he gives this long speech about the civil service and how Whitehall is failing. But he sets out a vision. And I'm not s saying I necessarily agree with it, but it sets out a vision

Which is the optimistic Cummings vision of Britain, which is he says that Britain should be the best place in the world to do science and technology. And he was obviously instrumental in coming up with the idea for for ARIA. And I just think that there's a sort of There's a sort of romance there which sometimes gets lost in the noise around Dominic Cummings, but there's another guy called Elon Musk.

I have a slightly strange habit of spending um the wee hours when I should be uh rehearsing for the Today programme, looking up videos of things that people in Silicon Valley said twenty five, thirty years ago. And there's a young man called Elon Musk, South African via Canada, who says he wants to solve humanity's biggest problem.

And that was where Tesla started, and I'm not saying I endorse everything that Elon Musk has done, but there is this feeling that you should take the biggest possible problem, you know, cancer, and fix it. Aging and fix it. And it sort of requires that mad vision. And then mad people, perhaps, to try and get there. And the thing is, some of these things are actually possibly happening. And cancer vaccines is a good example.

It could be that we're just a couple of years away. Yeah. And it could be that Arya plays an instrumental role. Yeah. And that would be a British story, wouldn't it? Yeah. I mean this is this this is the thing that I That retains the core of my optimism about this country is that actually if you look at it's such an implausible story that this tiny cold wet island in the North Atlantic should have shaped the world in the way that it has.

And really the reason that it has I I I think dates back a very long time. You know, the England had a before it was Britain even had a a very distinct set of institutions and culture, you know, kind of long long before the Industrial Revolution. You mean common law, Magna Carta? Common law, uh yeah, limited government, but also even just things like uh property rights, um things like the invention of

um and and you know which which were sort of sort of forebears of of um of limited companies. You know, there's all these sort of like institutional innovations that that come like way before you know the Industrial Revolution. And you know If you read books about like why did it happen here, a l i a lot of it dates back a very, very long time. And I think at the heart of it is the idea that actually

uh i i is what I would call like permissionlessness. The idea that actually this country has respected for m at least a thousand years the the idea that even very ordinary people should be allowed to like try stuff. Now obviously there's been enormous limitations on that. I'm not trying to like

pretend that we haven't had enormous amounts of oppression of different individuals and groups. But this idea of permissionlessness, the idea that you can try stuff, actually has very, very deep roots in this country. And I think if you read, I think one of the best periods to read about is like the the sort of uh birth of the scientific revolution and you know one of the most fascinating Seventeenth century?

Yeah, exactly. And uh exactly. What's so amazing about him is world historical genius, obviously. I mean like everyone knows uh everyone knows something Was he just had an apple pop his head. I mean wasn't he super. But at the same time he's also like really into like alchemy and astrology and you know i

Uh why why do I think this is important? Because I think it's really easy to imagine that like, oh, um, progress in science and technology comes from these like really like bottom down, you know, kind of prestigious institutions that, you know, kind of turning the handle and great things come. It comes from like weirdness. It comes from people who are like right at the fringes of both the the brilliant and the bizarre.

And and actually I think we're a place that can tolerate that really, really well and that at our best we can really celebrate that. And so, yeah, for me Aria I don't think we have anyone doing a stro astrology right now, but Aria I hope is a place where all over the world people wanna come and guide research programs that are almost too weird.

for for any uh anywhere else. And I think if we do that right, let's be clear and I I wanna make I always say this, I say this when I'm in front of the select committee, I say this when I'm with the Secretary of State, we're gonna have a lot of failure. Like most things that are weird are we weird'cause they're wrong. Um

I'll tell you one of the issues might be that a lot of people might trust Matt Clifford to do it. A lot of people say, Oh, he's a cool guy I heard him on this amazing podcast called Radical, which everyone else I know listens to and uh I kind of I well yeah, it's cool that he's in charge of this potential thing. Elon Musk and Sam Altman

Not so sure. Jeff Bezos, not so sure. Demis Hasabis, fantastic guy, Nobel Prize winner. But the two concerns people have is A, an extraordinary amount of power is in in very, very, very few hands. A and B as Demis Hasabis uh founder or co founder of uh DeepMind, which was uh subsequently bought by Google would say and has said that we have exactly the wrong dynamic for this technology. At the moment, you know, when we had previous extraordines which were by the way, AI is different to

Every other technology'cause it has its own ideas, it comes up makes its own decisions and could generate new knowledge. But we always said slow down and collaborate, whereas now we've got this crazy race dynamic with the wrong people in charge. But I I think there is a very important idea here about power and democracy. And one of the things I really like about ARIA to the our earlier conversation is

It's state capacity. It's is the UK government paying for this and empowering this. And you know, I've complained a lot about the failure merge of the British state on in this uh show, but but actually An extraordinary thing that Parliament passed the ARIA Act in a bipartisan way. And the Aria Act, if you go read it, is probably one of the shortest acts of Parliament. It basically says Aria can do what it likes and we won't interfere.

an amazing thing for for Parliament to have done. And I think it has real consequences for the distribution of power in the in in in these technologies. So I'm not complacent about that. And I do think that AI has implications for power that that are really important. But that's why I spent so much the last, you know, two or three years trying to like get the t state to take AI seriously. Because like, look, I I don't think the right thing is to try and stop Sam Altman or Demis or

uh Dario or even Elon Musk uh doing these things. But I think there is a thing about how do we make sure that as a country that can make decisions for us all we have a seat at the table. And that that I think is just really important. How did you end up doing this for a life? Working in professional services, having grown up in Bradford, fifteen years later you're the guy working cross party trying to make

Britain the place that solves the cancer vaccine. Do you ever sort of wake up in the morning and think, My life is pretty cool, but I didn't I didn't foresee this. We definitely didn't foresee it. Um I am optimistic to a fault, like that we Was the was this there was the move into politics one you felt at all queasy about? As in government. Government.

Yeah. No, it i it wasn't it happened by accident and it was something that I felt I I think a lot of it did come out actually of the dynamic that you've that you've just talked about, which is This stuff is really important. It's really happening.

do we actually want it to be entirely determined by a very small number of private companies in the United States? I'm actually a big Atlanticist. I you know, I spent a bunch of my life in the US. I I love the US. Um I'm not one of those people who would you know, has like this instinctive anti Americanism. But I actually think the US is at its best when it has to work with others.

And you know, I you've talked about Dems already. Uh for me he's one of the great British heroes of our time. Not just'cause he's this extraordinary scientist and entrepreneur. Actually I think the most consequential thing he did was saying when a D mine was bought by Google

I'm staying here. And and as a result, we have this incredible ecosystem there. So to me it was like, well, look, I I'm in a fortunate position where I can do this. And I think if we get it right, it will have enormous positive impact. And you know, I I do think that

I I I don't wanna oversell the story. I had a very I m I grew up my dad, as I already mentioned, was a social worker, my mum was a teaching assistant. Um, you know, I went to the local state comprehensive. But, you know, I had a great childhood. I I definitely I don't wanna oversell my uh this sort of misery of my roots. I had an incredibly happy childhood. But I did o I was always conscious of like

Can someone like me, from where I am, can I actually break through? Can I play at this level? I I didn't come to London. I think I came to London like twice before I was eighteen. You know, it was just like this mystery far away, slightly alien play. I think entrepreneurship is one of the great liberators of of ambition. That's why I've spent most of my career trying to help others do that. But as I got closer to some of the limitations of that.

m much of which we've talked about on this on on this podcast today, you know, like all the ways in which actually we put a ceiling on what people can achieve. Then actually I increasingly saw government as like one of the one of the vehicles to to change that. And I I do worry, you know, I I it's worth being really honest. Like one of the things I've had a lot of criticism for over the last year or so is

Uh entrepreneurs First, the the firm that I co founded with my co founder Alice Bentink, one of the things we say to entrepreneurs is, you should probably go raise your seed round in in Silicon Valley. Uh you should probably go raise your funding there. People say, How do you square being a British patriot with with this? And my answer is

This is kind of classic British establishment thinking that's the wrong way around. The question isn't how do we stop our most ambitious people going to the US? It's like, how do we make this the place that they want to stay? How do we unlock those pension assets so that we have the venture capital? Well, I think unless people like me

say, well, actually public service in one form or another is one of the unlocks on that, then we'll always just be complaining that like, oh, why do our best pe companies sell? Why do our best people move? Two final brief questions. Number one, what makes an effective entrepreneur? Well, I would say the thing I've probably changed my mind on most over the last fifteen years is when we started EF.

I thought it was basically like we just need to get the smartest people and if they're like really, really smart, they'll figure out all the problems along the way and they'll be fine. I think it's certainly true that we don't want to fund non smart people, but I think I way overrated raw IQ. Um, I think the most important thing by far is just relentlessness. Um, it is extraordinary how the very best founders will be.

rejected again and again and again. They'll be rejected by investors, they'll be rejected by customers, they'll be rejected by people they want to hire. And unless you have this pain tolerance to just take the nose, you you'll fail. And you know, the funny thing is, I don't want to keep talking about Demis, but I really recommend if you haven't read the recent biography. Um The thinking machine of the thing. Infinity Machines. Yeah.

One of the things that's interesting, everyone knows that Demon's a genius. I think many people, unless they've read this book, do not know. Like he's been an entrepreneur since his teens, and he has taken so much pay. I don't know yet. Well, I've I've I um I announced uh a couple of weeks ago that after fifteen years at at EF I'm becoming non exact chair that's I'll still be spending time there but but not full time.

I I wanna do something big. I think I'm too young to retire. Uh I think uh whatever I do next will be at the intersection of the two big themes we talked about today, which is like how do we make this country great and how do we make AI go well for the UK and the world? You what you are doing next is you're answering our listener questions. We've had rather a lot. Thank you so much for sticking around, Matt Clifford. It's uh it's a pleasure and a privilege. Thank you very much.

Well spending an hour or a bit either side of that with Matt Clifford is like a massive, massive jolt of energy. And I can see why, frankly, whatever you think about his opinions, his ideas. Uh his experience, what he thinks of the world, I can see why successive prime ministers on both sides of the House of Commons wanted him in the room. Not only'cause he knows what he's talking about, but he is an incredibly energizing force.

uh deeply, deeply, deeply passionate about technology, but also about this country. It was just really interesting. It's a while since I've heard someone A, uh, so embody this desire to to fight decline and to sort of go against the prevailing uh pessimism or anxiety of our Zeitgeist, but also just really openly uh talk about love of country and patriotism, uh and cast himself as a British patriot, not whilst ignoring

some of the uh nastier periods of British history, but saying, as he put it, in the net, uh this has been a country which has done great things uh in creating the modern world. There are a couple of specific things both on tech and the kind of politics and government. side of things and he's seen both that really stood out for me. One was on the sort of manner of government and the nature of politics.

When he talked about how the people who you know, we have to understand that all policies are trade offs, that there are gonna be losers, and that the losers are the people that make a lot of noise, we often see them as a real person who's likely to lose out and to suffer in some way.

But we don't really grasp how the people who lose out from not building things or not doing something aren't real people, they're just stats. I thought that crystallise something quite powerful about how we perhaps you know including us in the news industry give too much weight, too much airtime to those who are obviously going to lose out and don't think about those who are going to lose out from not taking particular actions.

And then the other thing on AI specifically, I mean, on the stuff where you can't know for certain how things are gonna pan out because it's about the future, it was just a useful corrective, I think, that he talked about future jobs.

and the the impact of AI on uh jobs, not as a jobs apocalypse, but more as a kind of form of productivity enhancement. Now he's obviously thinking about it from the point of being an owner, an entrepreneur, rather than being a, if you like, a a a daily worker who's potentially going to lose their job. But that idea that you should reframe it in terms of what you do with the gains from productivity and not in terms of the losses and the displacement, though there will be

Big losses and displacement was again a useful and pretty radical, I think, counterpoint to the prevailing mood of our times. God, that was fun, wasn't it? And that is it for this episode. To make sure you don't miss future conversations, you can subscribe to Radical with Amal Rajan on BBC Sounds. Please do that. And please feel free, if you happen to listen to us elsewhere, to give us a little five-star review and say something nice about.

us because if you do that, who knows, it might help others find our work as well. We'll be back same time next week. Thank you so much for your time.