this is bbc news, the headlines: at least a0 countries have now put restrictions on travel to and from the uk is the government here admits the new more infectious variant of coronavirus is out of control. european union officials are trying to agree co—ordinated strength and health protocols people travelling from britain. 32 years after the pan am disaster over lockerbie in scotla nd disaster over lockerbie in scotland the us has announced that terrorism charges has been brought against a libyan man accused of making the explosives that brought down the aircraft. 270 people lost their lives. the us president—electjoe biden has appeared before the media to receive the covid—19 vaccine. mr biden and his wife doctorjill biden were given their first doses publicly, live, in an effort to boost confidence in its safety and encourage others to take up the vaccine in its widespread distribution next year.
now on bbc news, it's hardtalk with stephen sackur. welcome to hardtalk. i'm stephen sackur. the tech sector is fast becoming a battleground where the united states and china, the world's great economic powers, are competing for power and influence. so where does that leave europe in the race to shape the digitalfuture? well, my guest today is herman hauser, veteran european tech pioneer and venture capitalist. is europe failing to build its own tech champions? herman hauser in new zealand,
welcome to hardtalk. nice to be on hardtalk. you are a renowned tech entrepreneur, and when we look at the global tech sector that we have today with vastly wealthy companies, vastly successful entrepreneur innovators who lead them, it is tempting to see all of this as an expression of raw and pure capitalism. is that the way you see the evolution of the tech sector? partially, yes. and of course, in america in particular, capitalism has brought about some of the most dominant tech companies in the world. we have seen that top eight of the largest companies in the world are american, and most of those are technology companies,
so capitalism is a key ingredient here. why then, when you look at the tech sector today, are you so concerned to tie technology to notions of sovereignty and power projection? well, the reason is very simple, that sovereignty used to be mainly a geographical or military concept, and coercion was brought about by military might, but this has all changed, and sovereignty in terms of dependence on other or companies come and therefore, the ability of other countries to coherce a country like britain or any other nation is as much a result of technology dominance or technological power than it was of military power in the past. i'm just struck, even as you say that, about the degree to which things have changed since you began. in the early 1980s, when you, a recent science graduate from the university of cambridge and you were looking with a partner to set
up a, i suppose one would call it an embryonic computing company, at the very beginning of the computer age, things were very different. i mean, you weren't thinking in terms of power projection, of the relationship between your idea and the power of the uk, you were simply looking to market a new idea. yes, it was the micro process of it. we were just enamoured by the idea of a microprocessor and that the computer could be so small that people at home could use computers, and play with them and programme them and do all the things that people do with them now. so, it was the same excitement
as i was then than young people are with al machine learning now. is it true, i am very keen to get a real sense of what it was like in those pioneering days of technology. is it true that you and your partner had 50 british pounds each at the very beginning of setting up acorn computers, and that you went to the bank with no real business plan and just said, "look, we have got a great idea, "give us a lot of money." that's right. and the bank gave it to us. why? he laughs. well, we went to see the bank manager and said, we would like an overdraft. there was no venture capital at the time. the only way you could finance companies was through bank loans, and that was typically through an overdraft arrangement, and we needed £10,000 to get going. so, it was a misty night,
i remember it very well. and i told him that we wanted to start this microprocessor company, and he said "well, what's microprocessor?" so we tried to explain that to him, and his response was, "well, isn't it nice to see "young people start companies?" and then he did his due diligence and said, "now, which college did you go to?" and it was national westminster that happened to be across king's college, and his office actually looked out on king's college, so you could say, that one, and he said, "that's all right, here's £10,000." and i'm thinking to myself, how things must have changed. i mean, that way of doing business and persuading a moneyman to invest in a new technology. it doesn't work like that today, doesn't? if we are talking about how the behemoths, the giants of the tech sector have come to be, what is the difference now in the way in which venture capital works, investment
is built—up, and that the giant companies emerge from the massive start ups. well, the thing that has happened is that people realised that technology can be developed very rapidly, indeed, through very, very substantial companies. you know, the iphone was invented 12—13 years ago, and it's one of the biggest industries that we now have. a similar thing is expected to happen with quantum computers, for example, there is no quantum computer at the moment except for a few implementations for it, but it's expected to be quite a large industry within ten or twenty years. so come the thing that has changed is when people have these new ideas and they realise that they can be big, you then need not just smart people, and lots of them, but you need very large amounts of money because the first advantages are so pronounced. so, if you get there before anybody else does,
and you gets economies of scale, and if you are the company or country that can set the standards, you get this lock in that we've seen with google, facebook, you know, netflix, amazon and so on. and as you provide me with that list of global tech giants today, i am thinking to myself, all of the ones you have just mentioned are american. in your own career, try and explain to me why your brilliant idea which generated acorn computers, which was very successful in the 1980s, why you didn't become a stevejobs or a bill gates, or a mark zuckerberg? your company, in the end, was taken over by an italian tech firm. so many british and other european great ideas, innovative companies,
end up being taken over. there is not the scaling up that we have seen over time, consistently, in the united states. why? that is indeed our number one problem. few people know that we don't actually have a start up problem in europe. we have more startups in europe than in america. we've got a scale up problem. so what is the scale problem? well, it comes in three aspects, our scale up problem. number one is the size of the unified market, and that's why it's so important that, and of because we need that large harmonious market that the us and china have. the second problem is that we have just one fifth of the venture capital in the united states per gdp in europe.
so, both america and now china — through the state funding — just have a lot more money that they are willing to spend on cutting edge technologies. and the third problem, which is quite serious, is that because we don't have the googles and facebooks of this world, when our companies grow, we can grow them, you know, reasonably easily to 100 million or so, because there' enough management turnaround of people who know how to run a 100 million euro company. the question arises, how do you then grow to 500 million, ora billion, or 5 billion? well, it's very easy in silicon valley. you just get the guy at apple or google who runs the 500 million dollar division and say, why don't you do it for us? and make a very successful and give you some shares of the company. and they do, because they're very flexible in their labour laws.
so, you and your story is, again, indicative of how things work differently in europe. you co—founded — as a part of a spin off from acorn — a company known as arm, a—r—m, a computing company which has become a hugely successful in the united kingdom. i think i'm right in saying that arm's chips are used in 95% of the world's smartphones, including those made in china. it is a globally dominant company. you were one of the co—founders, you now are not involved, but you sit back and you see that arm, this jewel in the crown of british tech, is currently being taken over. there's a lot of legal procedures to go through, but being taken over by one of the us‘s biggest chip makers invidia. do you think that that deal is in the interests of the united kingdom?
no. i think it's a disaster for cambridge, the united kingdom, and europe. and the reasons are as follows — one, invidia, which is the company that is making a bid for arm is the world's most valuable of the chip companies, worth 500 billion now, and if they were allowed to take over arm, it would become yet another american monopoly that we are trying to get out from under. so, you know, we complain about google, "if only "we had a search engine." we have a perfectly good search engine with vista, it was a cambridge technology, which has never bothered
to grow it up, or make it a european search engine so that we have an alternative to google, and now we are completely beholden to google. exactly the same thing would happen to arm. but the second more invideous problem, if you pardon the pun, with arm is that if arm becomes a us company, it falls under the us export regulations. this means that if we wanted to use our own microprocessors, we would have to ask the president of the united states for permission to use our own chips, and as we've just seen recently, the american
presidents, you know, america sometimes has idiosyncratic presidents that are willing to use technology as a weapon. you make it sound as though the united states ought to be regarded as some sort of strategic tech rival, and potential damaging enemy, where, surely, the truth is, that the united kingdom looks to the us as its closest strategic partner, its ally in everything from military involvement to intelligence gathering, to economic partnership. why, in the end, do you not trust that the deal — in the words of the chief executive of invidia— would be extremely positive for cambridge, the city you care about so much — he said cambridge would become our european home. "we will become the world's premier company for the age of ai, and it will be good for all of our stakeholders." well, because it's just not true! so, but the main value of arm is that it has always been the switzerland of the industry. so the value to the world into britain is that it deals very evenhandedly with all the licenses that it
has, which is over 500, in fact, practically all semiconductor companies in the world have a arm licence. and the problem arises by one of the licensees because it's also licensees taking over other companies that have been very neutral with respect to all the licence laws they want to use arm processors. and this becomes even more worrying if you look about the next generation of arms, because if the next generation of arms comes out, it is extremely unlikely jensen is going to pay $a0 billion to buy arm and then be in a philanthropic way, give the new designs to all his competitors. this is just not going to happen. so, let us go back to the beginning of our conversation and your notion of tech sovereignty.
is it your view that there is now a conscious effort both in the united states and in china to project power through technology? in a sense, to dominate global technology and therefore find new ways to control the way the world works. i don't think they intentionally did that. it just sort of developed that way. it developed that way because china realised that it could become a manufacturing centre for the world and therefore, as more and more manufacturing was concentrated in china, without really us realising, it sort of crept up on its, the mass amount of monopolies, where if you don't get it from china, you just,
you know, you don't get it, as we have seen with the masks and the ppe during the covid crisis. and in america, we have seen it with the president's dominance of payments systems, and especially chip design software. you now advise the european union on its tech investments, the future of the us tech sector. in a sense, they will have to choose? because of this increased attention and rivalry between the us and china, being played out in the arena of technology, and we have seen the us take a real stand, for example, against the chinese company huawei, not only getting them out of their own 56 roll—outs, but telling the rest of the world, or at least its partners, that it must not use huawei technology or it
will suffer sanctions as a result. europe is going to have to choose. well the important thing is there is a phenomenal opportunity for europe to be the honest goal in the war of the eu and china, but we have to avoid becoming collateral damage. in the only way we can avoid that is to build up our own technology sovereignty, and that's why i'm promoting the 100—billion—euro fund to make sure that we get this independence from china by moving some of the manufacturing back into the uk. so, 50 billion will be to be spent to get our independence from chinese monopolies, and the other 50 billion we are looking to spend to get out from under american monopolies. so you keep coming back to this notion that european innovators and tech companies need to have their own european funding structures, there needs to be no great reliance on the us or china. i'm very mindful that you as a venture capitalist have drawn in an awful lot of money for your own investments from the united states, but leaving that aside... and so it continues. i think the important thing
is that, what i'm advocating is not an insular drawing up of the bridges, the drawbridges, quite the opposite, that we need to work both with china and the us, but as the third super — economic superpower, you know, we must take a more decisive stand on being independent to both of them, but act as the honest go—between... so where you stand on specific things than like the government's pushing of a new national security and investment bill which will make it much easierfor them to ringfence and protect british technology companies in the future and reject takeovers, perhaps, such as the one that we have
discussed for arm and its microprocessing production. think it's an important piece of legislation, and i am very much for it. because we have got to have the legal wherewithal to be able to stop critical technologies leaving our shores. and that's why it's very important to make a list of technologies that are really critical to the functioning of our economy and government. you are one of best—known the capitalists in the technology sector. you have been a venture capitalist for decades. it seems to me that you're now supporting notions of protectionism and ringfencing both companies and marketplaces, the eu, for example, is now pushing anti—competitive measures against the big tech firms, including google and facebook, which could see those companies facing massive fines for anti—competitive practices as perceived by the european union. all of this, too many people, smacks of the europeans trying to adopt protectionism in one
of the most vibrant sectors in the world economy. no, we have got to distinguish between protectionism and hanging onto your critical technologies. so, i am very much in favour, both from the us and from china, in the usual calls for venture capital where chinese or american companies might take 10—20% of the company. what i am objecting to is that these companies should have the right to buy any of these companies if the technology that these european companies have are critical technologies that we have to have in europe, but of course, there are clauses in the us and china and in britain as well. so this is not
anti—competitive, this is just pertaining to a very, very small sector of the investment scene. but it is about our mindset. earlier, you were telling me how the us has succeeded in scaling up and producing these giant, globally massively successful tech companies in a way europe hasn't. and europe is now looking at those companies and threatening to try to break them up, that is what the competition commissioner said just the other day, that if they don't, if the tech companies don't change their practices, europe, the eu, will seek to break them up. one of the fundamental principles of capitalism is that you avoid monopolies. because the minute you have got a monopoly, capitalism doesn't work anymore. it's like evolution. you can't have evolution unless you've got a great variety of different companies covering the same sector. and so it is with capitalism,
the minute you have a monopoly, how ever, you know, how nice it is to have all the google features of the moments, you know, one of the problems with google is that although they have a modicum of actually have a company motto saying, "don't do evil." and once you are the size of google, you can't help being evil. really? because you can either buy all the competitors, which of course they can do, or smother them. so, this is not capitalism. this is a monopoly. as final thoughts, i cannot let you go without tapping into your vision of where technology goes next. what are going to be the game—changing shifts in technology over the next, let's say decade? i will give you three that i am reading about, and i will ask you if you are putting tens of millions of dollars, as you may well be, into your next tech ventures. which of these three sectors
you would be concentrating on? artificial intelligence, genetics and gene editing, or quantum computing? i have investments in all three of them, and i would add, you have mentioned three of the four that i am very keen on, but the fourth that you have missed out on is blockchain and smart contracts. but if i were to pick a single one which i think, you know, you are asking me, i would go for synthetic biology. you know, the genetics, life science issue because — for two reasons. one is the technical progress in life science is so spectacular. i've believed in moore's law all my life, that's a factor of 32 a decade, when we did
selects of the gene sequencing company, we managed to reduce the cost of doing the human genome from $10,000 to under $1,000 now. so the breakthroughs that are coming along in life sciences, especially molecular cell biology, especially now with synthetic biology, i think we'll have the biggest effect on our society. herman hauser, it has been a pleasure having you on hardtalk. thank you very much indeed. thank you. hello there. the next couple of days, we're going to hold onto this north—south divide with northern areas seeing the colder, drier, brighter weather with some sunshine, a few showers, wintry on the hills. further south, it will continue to be fairly mild, but rather cloudy and wet thanks to low pressure nearby. so this is the pressure chart as we head on into tuesday. we still have this weather front straddling southern
areas, further north, though, we've got higher pressure. so, here, plenty of sunshine for northern ireland, scotland, much of northern england, midlands and into north wales. more cloud, though, across the south of the country, some spots of rain at times, and here it will be milder. further north, it's going to be another chilly one with temperatures into single digits, some of these showers could be wintry on the hills because of the temperatures are going to be quite low. but, again, double figures in the south. as we head through tuesday night, we see a new area of low pressure push up from the south—west. that's going to increase the cloud, outbreaks of rain across the southern half of the country. further north, it will tend to be clear again, there will be a few showers, which will be wintry, as temperatures will fall to around freezing for many — a touch of frost here. further south, though, you can see a—10 degrees. so, into wednesday, we've got this area of low—pressure, quite a vigorous system. more isobars on the charts, so through the day, it start to get windier. but, there is still some milder air with this area of low pressure. so, the southern half
of the country stays cloudy, wet and mild, further north, it will be colder. but the cold air will win out as we move on into the christmas period. so, this is the chart for wednesday. much of england and wales, perhaps even southern scotland will be cloudy with outbreaks of rain, some of it heavy in the south, and there is a chance of further flooding, if the rain remains falling on saturated ground. another mild day here, 6—11 or 12 degrees in the south, but for scotland and northern ireland, a bright one with sunshine, one or two showers, wintry on the hills and low single digits. 0ur area of low pressure begins to slide away into the near continent, it allows this high pressure to topple in and bring us colder, northerly winds. it pushes the rain away from the south—east. we could see showers in northern areas, particularly around the coast, and these will be wintry because it will be cold. but for many, it will be dry with more sunshine around, noticeably colder, particularly in the south, a—7 degrees. so, that's for christmas eve. christmas day, a cold start, could see some frost around, and with high pressure around, it should be dry with variable amounts of cloud and some sunshine. but then it starts to become more unsettled again into boxing day.
this is bbc news with the latest headlines for viewers in the uk and around the world. containing the spread of the new coronavirus variant. more restrictions ahead in the uk and more precautions by other countries. getting ready for the roll—out. eu countries plan their inoculation programmes after regulators grant their first vaccine approval. russian opposition figure alexei navalny says he tricked security agents into revealing details of his attempted assassination — including that the poison was in his underpants. and two planets align for the first time in four centuries. did you manage to catch the so—called christmas star?