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. Amel'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 with its 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. Julie Kaye, who coined the term 'femosphere' 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 what's actor 03301239480 or email
[email protected]. Now on with the episode. Hello, it's Amel 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 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 problem 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 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 Suneck and Keir Starmer. He is Matt Clifford, co-founder of Entrepreneurs First, AI advisor to yeah, Rishi Suneck and Keir Starmer 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 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 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 going to 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 you can leave after that. I select this podcast because I felt that quite a lot of the news agenda is sort of noise daily events arguments about process scandals as it 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, this climate, there's all these sort of things. The top of those is technology. I would like to invite you to agree with me with this. I agree with your thesis. What a wonderful wonderful start. 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 us excited? I've watched you recently on the law. Koon's book show and I've seen great interest viral clips that you've done speeches you've given public interventions you've made. Do you think we're talking about the right stuff enough? Broadly no. I think that when you look at where we are today, both in the country and in the world, you know, we actually, you and I probably roughly about the same age, I would guess. And we sort of grew up in what I think we'll look back on and say it's 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 90s, the early 2000s, this was the like golden period of nothing ever happens. And now we're in the era where things are happening. Things are really happening. You mentioned amongst them already, obviously, AI is one of the things. I think it's 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 side show to what really matters, which is like who said what when. And I just think that it's funny when you read history and you sort of see that actually the degree to which 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 parallels and promise of it in detail at a moment, one of the reasons it's such an 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 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 my millennial meant that you were young. I know, I know. I think that Britain has sleepwalked into economic disaster. You know, the British worker hasn't had a pay rise for 18, 19 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 15,000 pounds per person of lost output. That's a lot. That's like 30 plus percent of GDP per capita. And that matters not because all those people can't buy luxury handbags or you know, going to 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 other problems that 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. One other point about that is people often say Britain is 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 significant rate. Against that, some people would say, well, Britain's not alone. Other countries have stagnated. Look at Europe, look at Germany, look at Italy. Yes, there is a mechanism. It 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 it's certainly true that there are other countries in the world that have stagnated. But 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 think there's lots 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 them on 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 just think that's a totally bizarre way to look at the problem. Is there a connection then? We'll do this as a summary of the thesis and then we'll go backwards in time. Is there a connection between Britain's sleepwalking into economic disaster as you put it in stagnation two last decades? And the extraordinary Promethean potential of AI. And is AI plausibly a root out of stagnation? In 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 at either 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 re-ignite economic growth. Okay. I'm going to dive into this with a tremendous relish in excitement. Just before I do capitalism, you spent a long time backing, working with leading Britain's effort when it comes to entrepreneurs. There are a lot of people who listen to this podcast who think capitalism is a problem. And there are a lot of people, for instance, we've got a huge number of requests and I think we've now acted on them successfully for us to invite in to come in this podcast and economists called Kate Rayworth, who is thoughtful, brilliant economist, starts from a position where she
thinks growth is not necessarily the solution. And so I want to put you two things really to see what you think about them. First of all, what do you say to those people, not just Kate Raywith, but others who are fans of hers, that the problem is the pursuit of growth, that a repacious, voracious desire for more, more, more is not only led to consumerism, it's not only caused the economic externalities that mean the disintegration of the planet, that we need to, as a sort of species and as a country, learn to live with less. I don't agree with that. Well, a first thing to say is to defend capitalism isn't to defend everything that comes out of it, is to say that, you know, as economic systems go, what do we want? Well, what I want is, I want a system that allows people to choose 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 diminish or seek to, in order to defend capitalism, we don't have to defend all those problems. But what I think we can say is 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 100 years, largely because of the workings of capitalism. And interestingly, it's shrunk most in China as they have embraced. You know, they wouldn't like to use this word, but you know, capitalism with Chinese characteristics. And indeed, a neighborly country called India, which has moved something like 400 million people out of poverty. And did so when Manmo and Singh was the Prime Minister of India embraced a FDI foreign direct investment when he was the Finance Minister of India in the early 90s. Okay, so that's capitalism. You know, if capitalism is going to be effective and successful, certainly for the majority of people and 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 extraordinary potential of the technology. Some of the concerns they have 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 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 threads to put on that. So the first thing I would say is actually the concentration of income, 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 actually in order for wages to increase, which is what the labour share of income 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. So the ordinary people can get a pay rise, which is just not going to happen. You know, I fully, fully reject the idea that we have enough money and if we just distribute 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 income that was available in 1900. 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 19th 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, the truth is I can 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 concentrations of power happen most when you have stagnation because that's when you start playing zero. Some games where it's like, well, how do I stop you competing with me? How do I, 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 as you say, could unleash productivity and unlock productivity in a way that increases output per worker and therefore national wealth. But are you seeing with the economics of AI as currently construed trends, tendencies which go against your vision of an inclusive capitalism which spreads ownership and wealth. And I asked with that, it's under two headlines because I worry about what you would call an AI restockercy, aristocracy, AI restockercy. And there's two concerns. One is 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 an anthropic, which by the way is probably the fastest growing company in human history. 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 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 actually agree with that. So let me make a few rapid points then we can dive into which which has been most interesting. 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 Starmur, I had a big section which at the time was very weird and niche on AI sovereignty because I actually think that there is a huge domestic political economy problem if AI transform your economy and you have no AI companies. 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 horrific. 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 lots of different companies. And so as a 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 listen 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 become a bit of a pensions absolutist at least 40s. I think many many many of our problems in this country are downstream of our pensions. So let me just give a few stylized facts. So in this country in the late 90s, roughly three quarters of pension assets were invested in equities in shares, stocks and shares. Today that numbers more like a quarter. So we've massively de-equitised what for most people is their single best shot of exposure to growth. And in fact we've gone from being a nation whose futures are dependent on growth of companies to one whose futures are dependent on treasuries paying out their coupons 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 think you have to be an ownership society to be optimistic about the futures. First stylized fact. Second stylized fact is as a result, this has huge implications for another thing that people in mind just talk about all the time, which is how can we don't have any big tech companies? How come they're all in California? Which partly because in my old job as a venture capitalist, I have to go out and raise money from somewhere to deploy entrepreneurs. Where does that come from? We largely comes from things like pension funds. Pension funds, endowments, foundations. I've raised successfully close to a billion dollars of capital into venture funds over the last 15 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 venture capital throughout. That may not be true. But like as in on average, most most sort of local authority pension funds have zero exposure to venture capitalists. Because people listen to this world have heard maybe of the Ontario Pension Fund being this and you're like, what is this thing? To what you're saying is foreign pension funds, often we'll say a Canadian pension fund, will basically a kind of an enormous kind of investment scheme 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, we'll give you a bit of money in return for a share of this company. And if you know the technical dreams in Matt, we need a radical idea to fix pensions in this country. You've done this AI 50-point plan and look forward to hearing what your discussion with the Moled to on that. 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 we're about trying to increase the share of UK pension assets into on-listed equities into private, you know, companies. These are the right things. It's just going incredibly slowly. 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 think we have this very, very challenging problem in our country, which 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 do about planning. Well, I actually think it's the pathology that runs across planning, across it.
infrastructure, across energy, almost everything. We've got to a position where, and 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 of statistics that can be ignored. - That's so interesting. - And so whenever anything is a problem, obviously if you wanna 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 the local TV, but it's in doing it. - How can you put on the TV, the person, the 15 year old who's gonna have to work in a, box room instead of having proper bedroom, because there aren't enough houses. - But the builders and plumbers and suppliers who don't get to make that house, they're just a disaster. - They're just a statistic. And you take that and you can extrapolate that over nearly everything. So when we talk about pension reform, of course there are valid objections to a radical of evil in our pension scheme, but we have the scene versus unseen. The people that wanna stop change are very visible, they're concentrated, you can put them on TV. The people who benefit from change are diffuse, they're not organized, why would they be? They don't know each other. And so we just, we've now got to this position where we're a vitocracy. 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 starts, you know, by the way, in number 10. Like Mike's parents working in number 10 was a place where it's so hard to make things happen 'cause everyone knows someone who will object. Is that the problem? I'm really interested in that, 'cause I, you know, cover this stuff for a living. People sort of say the trouble with number 10 is you've got a huge churn turn over, not necessarily bad people with this level of living competence. Well, I don't think it starts with this number 10, and I'm talking about 20 year problem, right? So I'm very, a bit like your opening observation. And we're both to say, well, it's this person, it's this personality for, I think it's structural. I think it's that we've got to the point where not to blame your colleagues in the media, but anyone who is upset about anything, is it hearing? Yeah, it's a hearing. But I really think this problem of, how do we make the voices heard of the unseen, 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 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 2022, is not historically unusual. The problem is waste stagnation. Of course, we have an affordability problem. It wasn't a pay rise. I'm not suggesting it was Keir Starmer who you're on WhatsApp speed dial with, who said that to you. But Keir Starmer would say that he, 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 trade-offs. And there's not-- It's some people who are going to lose it. Exactly. And, you know, it is not, there's not a comment about this prime minister or any prime minister. But, you know, the truth is your priorities are what you are willing to hold constant while trading off other things. So if growth is on unborn priority, then we have to be willing to upset people whose number one priority is not growth. Like, you cannot, you cannot actually have growth without people objecting. And one of the reasons I object when people say, like, oh, you know, growth is for the rich, which, you know, and there's some people that, you know, as you mentioned, I gave a speech on this last year and I think I'm very self-critical person obsessed about the negative responses to it. And one of these is like, this just trickled down economics. This is just like Liz Trust 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, people who make their income through, you know, renting out artificially restricted 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-- by the way, when hugely viral, and I watched it, and I watched the entirety of it, actually, such that and read the speech, in which you talked about Britain's scientific heritage. And you mentioned a huge number of truly great inventors, pioneers, engineers. I note that you took pains to make sure you covered all basis. So you span centuries. You talked about women. You talked about men. And this was, I think, for a group called Looking for Growth, which casts itself as an impartial non-party political organization, which I think is why you who do the same-- we're associated with it. But it is also true to say that on some social media platforms, anyone who wants to serve 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 decline. Just what in this safe space for radical ideas, why do you say why you gave that speech and what your argument was? The reason I gave the speech is that my most radically-- because I do believe this can still be the richest country in the world, per capita. I think actually the funny thing is, if you're 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 look at textbook, where does economic growth come from? You have the basic layer of going to get the rule of all, right? OK, fine. But then you get to the intermediate layers with infrastructure, et cetera. The icing on the cake is frontier industries. It's really a 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 energy generation. And so my belief is this is an extraordinary country. It's a country that actually built the moral modern world. I think my more contribution is I also think it is a country that on net has actually has an extraordinary moral legacy in the world that I really believe in. And 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 the age of-- in my 30s, suddenly was like, well, I kind of have the opportunity to be able to kind of do the public service, a couple of stents in number 10 for first for issue sooner and then for Kierst Armor. And came out of that both kind of energized by what's possible in government, but also pretty depressed by where we actually are. And so 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. Actually, this is possible. This is true. But to one extent, do you think that one of the defining challenges of today is the conflict. And it is a conflict, not just in consistency 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 Arya, where I'm the chair, the Advanced Research and Invention Agency, for funding and managing breakthrough research. And the other was the AI Security Institute, which was up in 2023 to build state capacity and understanding the scale and power of AI systems. And I've invested in hundreds, maybe now thousands, technology companies. And I would truly say that both AC, the AI Security Institute and Arya 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. They have the same talent density of the best startups I've been involved with. Now, they're doing things that they're doing new things. It's not like we, you know, in either of those cases went in and fixed the NHS. 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 there's no reason why the state has to be slow. But on 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 dispossessionally inclined to support looking for growth is this is a country that struggles to build stuff. And 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's mostly engineers, where it's here we run by lawyers, quite literally in the case of Kia Starmer. But we don't build stuff. If you look at size, well, see if you look at HS2, if you look at the lower terms gateway, and on and on it goes. That's one area where you'd say the state is just not able to get the car's wear stuff done. So there's two different things here that we have to, like, decouple and address. So there's something about Stake Pasty, which is what you're touching on. I'm actually pretty optimistic about Stake Pasty. 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 think we see that in, for example, in the parts of this day, I just mentioned, but actually lots of things that I've nothing to do with, you know, I think in national security, I think in our special forces, I think in, you know, certainly in parts of the NHS, we have amazing Stake Pasty. I think the thing you're actually talking about is how do we resolve trade-offs? And, you know, you talk about size, well, see, I think this is right, you know, the environmental impact report for size, well, see, was 44,000 pages long. We don't have to write 40,000 page environmental impact reports. No other country in the world does that. You know, that's, you know, 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 Stake Pasty question. And I think the reveal 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 40,000 page reports, obviously. Planning lawyers. Now are we willing to head 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 em'ol with bad outcomes. So whenever anything bad happens, we write a very carefully tailored new rule to address the symptom. - Sometimes it's necessary. I mean, post-Grenfeld, I mean, what was going on with cladding was a warrant. And tell me what we would say, well, if that slows down future building developments, but it avoids a Grenfeld. Obviously, that's the. - But this is a great example. 'Cause Grenfeld was truly horrific. I think it was like one of the most. Maybe the most viscerally painful example of failure in sort of our lifetimes or maybe it's just a recency-ish. That was nearly 10 years ago. I mean, that truly horrific and kind of unforgivable. But this is exactly what I mean is our response to it doesn't actually get to the root causes. It says, well, here are some of the like surface level phenomena that looked bad, we'll address those. But what the response to Grenfeld has done is added £100,000 to the building cost of every house in this country. So the government has a target of 1.5 million new homes, right, every year. I think the 24-25 is not going well. - It's 200,000. Now, I'm not blamed at all on the regulatory response. But when I speak to people who really know housing, they are all horrified by what happened at Grenfeld. But all believe that it was totally appropriate that we had a response. And the all thing that the response was both failed to address the hatch all the root cause problem and the stored average. - But add absolutely enormous costs to one of the biggest crises that we have in this country. - So other than following all of the recommendations of your AI report, which the government did, how do we stop failing and that sort of way when it comes to artificial intelligence and make this country the home of, I mean, it's not going to be the home of artificial intelligence that might be on the west coast of California. You did this report. In fairness to Kirstama, he accepted all of your recommendations, didn't he? - Who's great? - Yeah, I mean, honestly, I was so encouraged by his and his tea. You know, it's funny having worked for Rishi Soonak as a nonpartisan non-political appointee and then worked for Kirstama as a nonpartisan 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 see. But my sort of self review on the AI Action Plan is that all the things that the government could do very directly, it's done actually pretty well. The things that have been hardest, they're all the things that touch on the things we've been talking about for the last 10 minutes. Well, so like one of the flagship policies of the Action Plan is AI growth zones, which is the idea that we need to have domestic compute infrastructure in the UK. We need the data centers that will run these AI models. We'll have it as a slight side now. 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 international. And that's wrong because? Well, it really reminds me of this, and to his credit here, it's this is one of his big mistakes. But there's that famous clip of Nick Clegg in 2011 explaining why we're not going to build nuclear, which is basically like one come online until 2022. 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 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 10 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 the Prime Minister's great credit. You know, he went hard on this. If you go watch his speech announcing the action plan he talks about this, he's given multiple interventions on it. Why haven't we 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 electricity prices in Europe. 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 a professor, a professor. I spoke to an AI giant and someone who had just been in to see Whitehall. And he said, he just had an hour and a half with the Treasury. And then I'm saying, you've got to invest here. You're an Englishman. You've got to invest here. You might work for a company headquarter in California, but you've got to 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? Could be a reform government in a few years' time. Could be a Tory government. Could be with 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. 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 industry. Like these are all industries where AI, I think, everyone agrees, is going to 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 we could see enormous economic tailwinds, 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 there will 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 pretty poor. We're actually a 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 matters to invent the steam engine. It matters way more to build out the railroads and 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 as we start to see that actually you can now really do things with us. (upbeat music) 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 Clifford. (upbeat music) What does this mean for workers? There's a lot of people getting touched 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 technophile and someone who's extraordinarily excited and I use it on a daily basis and thinking it's a, you know, Prometheon. I don't like the word miraculous 'cause miracles don't happen. But anyway, 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 downstriving 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 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 just can't know, right? 'Cause that would be the future. And if you knew the future would be even richer. But in terms of the jobs that AI's like to come for, the best guess we've had based on evidence of what the jobs that are disparate at the moment, are what you can think of as entry-level white collar jobs. That's what Daria Amadei, 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? 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 the macro level. Will this category of jobs exist? I think that there is gonna be a lot of disruption. And I think for sure we're gonna see individual firms fail, change the shape of their workforce, have to change the shape of their workforce a lot. And that will cause real problems and we need to be ready for that. And I don't think we're quite ready for the level 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, to me in any conceivable world. It might mean that our labor market has to be a lot more flexible because individual firms will rise and fall more quickly. But I don't buy the narrative that there'll be no jobs. I do think things will have to change a lot. I have to say I'm not fully persuaded. Sorry, I started my career in professional services. It's a big part of this country's economy. There is this narrative that, oh, you know, like we don't need so much, 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 any legal, you know, managing the so-and-so. And 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 actually about things that may always be human. Something will be human for a long time. Things like trust, authenticity, legitimate,
I see these things are not going to 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. - But also, it's useful to think of this in the way that Mark Andreessen, who's a legendary Silicon Valley thinker and investor, thinks of this founder of a firm called Andreessen 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 for people in the news industry will be familiar with 'cause we've just lived through this grand unbundling. It's quite useful here. If your job is made up 80% of tasks which are repeatable cognitive endeavors. So 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 have sick leave. But you might in the remaining 20% be able to have a very successful job with that remaining 20% which is more to do with human skills that intuition or 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 endeavors 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 because it is totally understandable why people want the burden of proof to be on people who are less worried about the jobs of our clips. But of course, the way I always think about this is I'm the eldest of four. I think all four of us, I think often about my conversations around the dinner fellow and my parents being like, "What are you gonna do when we go up?" I think all four of us are doing jobs that either didn't exist would have been totally inconceivable to us in the late '90s. I really feel old, right? (laughing) And so it's like, in some ways, yeah, I get the impulse to wanna be like, what is the job that is there? But I think the burden of proof is on, if we look at the history of productivity increasing technologies, 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 fine jobs to go with them in the past. - Yeah, and I also think, 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 jobs that got completely dominated by AI? And it's a sort of niche one, but I think it's an important one which is chess. So in '97, as is well known, - Gary Cascale. - Deep blue. - And so 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, computers can completely dominate humans in chess. Chess is gonna shrink. There will be no role for humans. Chester Day is way bigger than it was in 1997. Way bigger. Chester Day. - Okay. - Not well. Sadly not well enough to play with anyone who can play well. I think my eight-year-old is starting to be a lot better than me. But what's really interesting as well is that as far as I know, even though the best human chess players have sponsors today, I'm not sure even Gary Cascale. No one has ever paid to watch a computer play a computer in chess, even though the computer's a way better than Magnus Calson. Now, Chess's niche, I'm not trying to pretend the whole economy's 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 to a twin reflector, and then we're getting to 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 is partly gets into technical stuff about how investment income. And if we're all in the future, you can have to just be investors much younger, which might be a good thing. We're investment income is generally taxed at a very different level to wages or labor 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, where ownership is concentrated, where work is no longer being created in the same way. If you lose tax receipts, then it's poorer people who tend to rely more on public services who potentially have the most to lose out. - So I agree with this. This is why AI sovereignty is important. So what do you mean by AI sovereignty? - I will explain, I'll try and be really precise. But let me kind of give you 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 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 that too much. But we're trying to prevent the shocks that come through these changes, damaging the lives of individuals too much. And that's why we have a welfare state. And this is like an eight-year project. One of that, let's just start the 20th century. 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 distribute. - That was what Wilson's white heat of technology was about. That was domestic goods, white goods, 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 cushion the negative impacts from the people that have lost out. I think what's really challenging about AI, I think there's a very visceral way to bring this to life, which is to look at what was the first speech that JD Vance gave abroad after he was elected. A lot of people think it was the Munich Security Conference where he told Europe off for everything. - Paris AI Conference. - It was at the Paris AI Conference and he had this very memorable line, which is the future of AI is American models running on American Gips. 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 the fiscal headroom to be able to cushion the people that lose out from it. So for me, this is 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 an our growth industries and outcompete it by faster adopting counter parts in other countries, we lose tax receipts exactly the time when we need more headroom in order to cushion the blow 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 there could be masters of our destiny in it. It's not the same thing as self-sufficiency. That is impossible, may not even be desirable. I think sometimes people and media, to me, that's a straw man. Like obviously we're not gonna be self-sufficient. The US is not self-sufficient in AI. It's dependent on all sorts of companies all over the world, including many in Europe. I think even China probably will not be self-sufficient in AI. 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 on these questions. I've been on the other side of the table with both the administrations and realizing how our lack of chips to play figuratively, not-- - Yeah, very mean. - Yeah, is a real problem. And third, so that 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 gains? - I have two specific questions, and I want you to talk to two specific constituencies, please, about them. The first is that 1.1 million needs. 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 we're talking about young people here, by the way, 18 to 24. We should be in the prime of their lives. They could be living in places, 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 easy. I don't want to be glib. I don't want to be one of those tech pros that's like, "Oh, just become an AI guy, you'll be fine." But 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 actually do give you superpowers in your pocket. Honestly, people like you and me, who, let's be honest, or we might be, you know, talented in some dimensions, but one of 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, "Caught is hot better than I am at most of that stuff." Anyone can use that. There is a free version of court. There is a free version of chat GPD. I, again, I'm not glibbly saying, you know, if you do that, you can be a successful BBC 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,
- Yeah, this is mainly sort of an invert commas elites rather than needs, for example, who tried it once in 2022, didn't think it was very good and so I've decided 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 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, who's going to YouTube or other video search engines, you can find the stuff. I say this, talk to my mum, who's the most amazing woman that ever lived and does kind of voluntary classes for people where in her community groups in South London, she'll sort of show people this technology. They think, this is absolutely incredible. I can help it book me a holiday, I can sort of work out where I want to go, I can save time, I can do my weekly shopping list. Okay. - Well, 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. It is incredibly hard actually to navigate universal credit. It is incredibly hard to work out what you were actually at, owed, 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, Chagy B. T. Cored, Gemini is really good at. And I do think there is this, 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, filling out forms, knowing, you know, like how to play the bureaucratic game. - I think some people call them the Lanyard class. - I don't know, I don't get to do it. But I really think that this is one of the ways in which AI can be a really great equalizer. - 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 in Bradford. You're from Bradford. And one of the huge concerns that people have about the modern economy is that, to quote, a remarkable young man called Joe Sedan, who has sat there just a few weeks ago, run to a tech platform for social mobility, called Zero Gravity. And he said the in-britain geography is destiny. We have, and this isn't on you, but we have a particular, an extraordinary, for historical reasons, 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 Chamath Palahapetaya, who's an influential VC, you probably know. 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, but I've realized as I've grown up, and I've taken a very close interest in social mobility and life chances in Maritoxi, 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've got to leave? - Well, I dig up in Bradford, and I went back there in October, and actually in some ways, marveled at how much it's changed for the better. I do think it's a place where actually economic opportunities are still very limited, as you say. Here's what I would say. I think if I like intellectually, honestly, with the country as it is today, it is really hard to escape the economic logic of what economists call aggregation. It's really, really hard to avoid the fact that yes, economic opportunity in this country is extremely concentrated in London. Does that mean you should leave, maybe? But to me, the reasons for that are also really addressable. So part of the reason that you would need to leave Bradford, rather than just sort of believe there and take a national view, is because we have really poor transport infrastructure to Bradford. We've not built local transport infrastructure 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, there's just an economic fact 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. There's a difference between like, what is the correct advice today? And what normatively should we want? And what we should want is for our cities that are between 100,000 and a million people to be amazing places to live. And by the way, as you doubtless know, if you try and decompose what are all the reasons why the UK hasn't got the same productivity as Germany, for example, it's actually that our second to 4.56 cities are just nowhere near as productive as that. That's a solvable problem. And it's back to all the things we've talked about. So Ed Bulls has done some remarkable work. He's basically Harvard, where he actually went in the 1980s. He and some co-authors at King's College of 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, where there's another country that's gotten closer. And the two things that he always lights on as A, Britain doesn't have that second tier of mega cities. Obviously he's got second cities, but I mean, he leads 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 want to just mention one other 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, is so big that we ought not to bother with it, but we ought not to try and make ourselves world leaders. And they might marshal for their argument, the fact that data centers are not just power-hungry. They're 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 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 industrialisation to run wild. And that's why we have a big problem in climate change. And I'm definitely not, and the reason I'm stressing this is because I'm definitely not a climate change tonight. It's really important. It's one of the great challenges of our time. However, the point of civilisation is not to reduce our energy usage. I think de-grossed as an ideologies like deeply inhumane. I think it misunderstands what the purpose of what we as a species are trying to do. So when people say the ecological impact to faeis is too high, I would say like compared to what? Compared to what? It's actually one of the good things about capitalism is that in theory, the price system allows us to allocate 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 also like, I know some people just going back to your question about what should it needs to. I know that 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 eat it. Stop using cordial chats, you can eat it. So it's great stat, which I have double-checked is true. If you have two people, one of whom is vegan and uses-- and uses AI every minute of every day without ever sleeping. And another who eats the average amount of meat that a UK citizen eats, which has the worst environmental impact, the second bi-- oh, sorry, never uses AI. The second bi-far. You just cannot make a dent by stopping using AI in your own environmental footprint relative to just the things that really matter. If you boil a kettle, that's probably more than a head-- that's more energy usage than a heavy individual user of AI in a day. Maybe not the most extreme, but typical heavy user. Really? How do you reconcile that with the warnings we hear about how power-hungry these data centers are? Well, but remember, these are where we're training these models. And then we get to spread that cost over absolutely enormous numbers of people. So ChatchyBT alone has about a billion weekly active users. And so yeah, it's enormous, but that's because the world is enormous. And it's one of the great hopes of what you're doing at ARIA, which is part of what you do now. But it's an incredibly exciting thing for those who don't know. It's based on-- or it's inspired by an American program called The Defense-- Advanced Research Project Agency. A 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 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 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. Or we're kind of-- quite soon we're going to be able to use AI to massively reduce the environmental impact of tidal energy. What's Matt Clifford most excited about right now? So you're absolutely right. I've had this enormous privilege of first spending 15 years entrepreneurs first meeting entrepreneurs that have these crazy ideas. And then now the last four years as Chair of ARIA seeing the scientific front here. And as you say, one of the programs that we've invested real money into is this program on an energy efficient computation-- so energy efficient AI. It's certainly true. The thing I would absolutely consider is that we have not optimized the way we do computer science.
today to minimize environmental impact. Interestingly, though, and again, this is sort of one of the joys of capitalism because the energy cost of AI for individual companies is becoming one of their biggest expenses. There are enormous economic incentives to reduce that, which is great. And one of the things that that will come through is new kinds of chips, and we're funding the development 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 built in the UK. And we've got great examples of that already happening. Actually, though, I think for me in many ways, the stuff that I get most excited about, Arya is the stuff that I know least about. So I didn't know something about AI. But Arya is, as you said, it's broad-based breakthrough science, and it's pre-commercials. 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 come together and we like orchestrate these research programs that end up, we hope, having these huge impacts. Now, you mentioned DARPA, which you rightly say, Arya is inspired by, to give, listen, there's a sense of what success would look like. No pressure. DARPA's research directly led to the creation of the internet, GPS, and MRNA vaccines. So it's a high bar. And that's what we want, Arya. We want to find things that will create trillion-pound industries of the future and have comparable impact. And solve big problems. Huge problems. It's a really interesting thing that, if you follow some of the people in the space and have done for a long time, even before it was kind of fashionable too, it's really amazing 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 2014. I can't remember if this was before or after David Cameron called him a career psychopath, where he was on that particular trajectory. But he gives his long speech about the civil service and how Whitehall is failing. But he sets out a vision. And I'm just saying I don't 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 Arya. And I just think that 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 the wee hours when I should be rehearsing for the today program, looking at videos of things that people in Silicon Valley said 25, 30 years ago. And there's a young man called Elon Musk, South African via Canada, who says he wants to solve humanity's biggest problems. And that was where Tesla started. And I'm not saying I endorse everything that Elon Musk has done. But there is this feeling 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 the which is a couple of years away. And it could be that Arya plays an instrumental role. And that would be a British story, wouldn't it? Yeah. I mean, this is this is the thing that I the retains the core of my optimism about this country is that actually if you look at it's such an impossible 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 think dates back a very long time, you know, England had a before it was Britain even had a very distinct set of institutions and culture, you know, kind of long, long before the industrial revolution. You mean common law, Magda Carter? Common law, yeah, limited government. But also even just things like property rights, things like the invention of trusts and, you know, which were sort of full bears of limited companies. You know, there's all these sort of like institutional innovations 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 lot of it dates back a very, very long time. And I think that the heart of it is the idea that actually is what I would call it permissionlessness. The idea that actually this country has respected for at least a thousand years 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 birth of the scientific revolution. And you know, like one of the most fascinating. With 17th century. Yeah, exactly. And exactly. So take, maybe the most famous scientist of that era, Isaac Newton. What's so amazing about him is world historical genius. Obviously, I mean, like everyone knows, everyone has something about this. I just had an apple, but who's here? I mean, what do you mean? Where's he? Where's he? That cool new. But at the same time, he's also like really into like, alchemy and astrology. And why do I think this is important? Because I think it's really easy to imagine that like, oh, progress in science and technology comes from these like really like button down, you know, kind of prestigious institutions that, you know, kind of turn in the handle and great things. It comes from like, weirdness. It comes from people who are like right at the fringes of both the brilliant and the bizarre. 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, Arya, I don't think we have anyone doing astrology right now. But Arya, I hope is a place where all over the world people want to calm and guide research programs that are almost too weird for for any anywhere else. And I think if we do that right, let's be clear. And I want to say this, I always say this when I'm in front of the select committee, I say this around the sector of state, we're going to have a lot of failure. Like most things that are weird are weird because they're wrong. But you know, I take one of the issues might be that a lot of people might trust Matt Clifford to do it. A lot of people say that he's a cool guy. I don't know, there's a major podcast called Radical, which everyone else I know listens to. And I kind of, 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 Hasubis, fantastic guy, Nobel Prize winner. But the two concerns people have is a, an extraordinary amount of power is in very, very few hands, a, and b, as Demis Hasubis found or co-founder of DeepMind, which was subsequently bought by Google, who'd say, and has said that we have exactly the wrong dynamic for this technology. At the moment, you know, when we had previous extraordinary technologies, which, by the way, AI is different, every other technology because it has its own ideas, it comes up, it 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 think there is a very important idea here about power and democracy. And one of the things I really like about Arya to our earlier conversation is, it's state capacity. It's the UK government paying for this and empowering this. And, you know, I've complained a lot about the failure mode of the British state in this show. But, but actually an extraordinary thing that parliament passed the Arya Act, you know, by parts of the way. And the Arya Act, you go, read it's proven in the shortest act of parliament. Bezos says Arya can do what it likes and we won't interfere. An amazing thing for parliament to have done. And I think it has real consequences for the distribution of power in these technologies. So I'm not complacent about that. And I do think that AI has implications for power that are really important. But that's why I've spent so much the last, you know, two or three years trying to like get the state to take AI seriously. Because like, look, I don't think the right thing is to try and stop Sam Altman or Demis or Dario or even Elon Musk 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, I've grown up in Bradford 15 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 for the morning thing? Well, life is pretty cool, but I didn't, I didn't foresee this. We definitely didn't foresee it. I am optimistic to a fault like the way it was. It was the, was this, there was the move into politics when you thought it was all queasy about as in government, um, government, yeah. No, it wasn't. It happened by accident and it was something that I felt. 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, a landsist. I, you know, I spent a bunch of my life in the US. I love the US. I'm not one of those people who, you know, has like this instinctive anti-Americanism, but I actually think the US is its best when it has to work with others. And, you know, I, you talked about Demis already. For me, he's one of the great British heroes of our time, not just because he's this extraordinary scientist, nonchalant, actually, I think the most consequential thing you did was saying when Dima was bought by Google, I'm staying here. And as a result, we have this incredible ecosystem there. So to me, it was like, well, look, I, I mean, the 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 don't want to oversell the story. I had a very, I grew up, my dad, as I already mentioned, was a social worker. My mom was teaching a system. You know, I went to the local state comprehensive, but, you know, I had a great childhood. I definitely, I don't want to oversell my, this sort of misery of my roots. I had an incredibly happy childhood, but I did, or 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 didn't come to one, I think I came to London about twice before I was 18, you know, it was just like this mystery far way slightly alien place.
I think entrepreneurship is one of the great liberators of ambition. I was well spent most of my career trying to help others do that. But as I got closer to some of the limitations of that, much of which we've talked about on this podcast today, you know, like all the ways in which actually we put a ceiling on what people can achieve, then actually increasingly so government is one of the vehicles to change that. And I do worry, you know, it's worth being honest. Like one of the things I've had a lot of criticism for over the last year or so is entrepreneurs first, the firm that I co-founded with my co-founder hours, Ben Tink. One of the things we say to entrepreneurs is you should probably go raise your seed round in Silicon Valley. You should probably go raise your funding there. People say, "How do you square being a British patriot 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-paid companies sell? Why do our best-paid 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 15 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 on 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 Rua IQ. I think the most important thing by far is just relentlessness. 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, unless you have this pain tolerance to just take the nose, you'll fail. And the funny thing is, I don't want to keep talking about damage, but I really recommend if you haven't read the recent biography of the best-est male of you. The thinking machine. Infinity machines. So, yeah, infinity machines. One of the things that's interesting is everyone knows the damage to genius. I think many people, unless they've read this book, do not know. He's been an entrepreneur since his teens, and he has taken so much pain. Final question. What's next for Matt Clifford? I don't know, yeah. I announced a couple of weeks ago that after 15 years at EF, I'm becoming non-exec chair. That's still a sped in time there, but not full time. I want to do something big. I think I'm too young to retire. I think 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 further, you can the world? Tell you what you are doing next, is you're answering our listener questions, and we've had rather a lot. Thank you so much for sticking around Matt Clifford. 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 cholt of energy, and I can see why, frankly, what everything about his opinions, his ideas, 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 because he knows what he's talking about, but he is an incredibly energizing force, deeply, deeply, deeply passionate about technology, but also about this country. It was just really interesting. It's like, wow, since I've heard someone, "A, so embody this desire to fight decline and to sort of go against the prevailing pessimism or anxiety of our zeitgeist," but also just really openly talk about love of country, and patriotism, and cast himself as a British patriot, not whilst ignoring some of the nasty periods of British history, but saying as he put it in the net, this has been a country which has done a great things in creating the modern world. There were 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 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 going to 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 crystallized 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 going to pan out because it's about the future. It was just a useful corrective, I think, that he talked about future jobs and the impact of AI on jobs, not as a job's 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 and entrepreneur, rather than being a, if you're like a daily worker who's potentially going to lose their jobs, 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 in 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 a more ragen on BBC Sounds. 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