There was a lot of good stuff here, Andrew Davis’ lament for the demise of AIM , John Kay on how entrepreneurs have grown through the centuries.
Good to see John Kay back and healthy
— Henry Tapper (@henrytapper.bsky.social) July 15, 2025 at 12:22 PM
John started us with Steve Job and the 20th century’s entrepreneur bringing everything together on the phone. He finished us with the 21st century wonder of Amazon, taking a rent on other people’s capital. We have come a long way from Arkwright and another John Kay who invented the flying shuttle. Here is how one 18th Century satirist saw him
John Kay
— Henry Tapper (@henrytapper.bsky.social) July 15, 2025 at 12:39 PM
We even got from John Kay a shot at Goldman Sachs and David Solomon’s promise to help us all (for all – read all at Goldman Sachs). This may not have gone down well with all in the hall.
Corporation message
Oh and we had a message from the Corporation of London that it wanted our financial services system to promote growth and break free from the clampdown of the past 11 years. There were a lot of talks (you can see above) and not a lot of questions from any table but ours- not me!
I took some thinking away from this event, not least about entrepreneurship. I suspect that the image below of distribution points is what Kay wanted to leave us with. We are in a new era which needs a new thinking about what big business has become
Here’s a conundrum for you Henry
Kay’s presentation today said in essence that we should be investing in intangible IP (entrepreneurs just pull other things together – and are tangible capital light) This was the heart of John’s book on the corporation in the 21st century. BUT Andrew Smithers’ most recent paper says that achieve growth we need to be investing in real capital.
So your challenge du jour is to reconcile those two views.
I posted this comment on 3 July when Henry first highlighted the Andrew Smithers paper:
Not sure whether Professor Sir John Kay, whose participation in the CISI event on 15 July has been promoted on an earlier blog, would agree:
“When governments offer tax advantages to ‘research & development’ expenditures, specialist consultants are needed to enable businesses to frame their claims.
“And while the link between the capital expenditure on a production line at General Motors and the cars that rolled off it in the years that followed was direct and quantifiable, today the connection between development expenditure and future returns is tentative and uncertain.
“What part of the market value of Amazon and Apple is attributable to their past development expenditure? There seems no sensible answer short of ‘all of it’.”
But Professor Sir John has also said the implications of [his] analysis [of the corporation in the 21st century] for business and public policy, both of which should promote the rents that arise from innovative differentiation and eliminate the ones that are the result of the abuse of political institutions, will be the task of a successor volume.
Perhaps those attending on 15 July may be able to tease these implications out from the esteemed speakers, who also include Con Keating of course.
I guess those able to attend yesterday had better Q&A?
Or we just have to wait to read Professor Sir John’s next book?
The Economist also challenged thinking about tangible assets with its articles on 12 June 2025 about “the world’s manufacturing delusion”.
But other views are available, and I drew attention, for an example, to the Cambridge Industrial Innovation Policy team’s response.
My view on this is not important. But I am pleased you have reminded me of the dilemma I’ve had in my mind since John Kay’s speech, reconciling the views of respected economists who seem so at odds with each other.
I remember serving on a trustee board alongside a respected economist.
When I queried why we didn’t have at least two economists on our board I was told that then there would be at least three opinions about everything!