UK's hardware talent is being wasted
https://josef.cn/blog/uk-talent> • £25,000 starting salaries at traditional engineering firms
> • Exodus to consulting or finance just because it's compensated better
This is _exactly_ my career so far.
The key thing about the British economy is that while most things operate in a free market, construction is centrally planned by councillors who are incentivised to block most development. So the whole economy is struggling, but industries that need physical space are especially hard hit. Your local council can't block you from writing more code, but can stop you from building lab space near where people want to live and work.
My first job out of uni was in a wonderful small engineering firm in Cambridge. Lab space there is eye-wateringly expensive because it's illegal to build enough, so we were based in a makeshift lab in an attic next to the sewage works. I loved working there, but it shows that we're restricting our small businesses unnecessarily through our planning system.
The solution is frustratingly simple, but politically suicidal for any government that tried to implement it: just legalise development subject to basic design codes. I hope we see some planning reform before it's too late for our struggling innovation industries.
I think it’s more that the bar for getting a hardware startup off the ground is much higher than a software startup - everywhere in the world.
Personally I’ve been trying to self-fund and bootstrap a hardware startup (based in Australia but I’m reasonably well connected in Silicon Valley as I’m a YC alum). I’ve had plenty of early success and validation of all my market theses, but it’s super hard to get any investors interested. Plenty say “exciting” and want to chat. All lose interest when you start talking funding needs and path to market.
In a world in which investors and other startup industry contacts are accustomed to seeing a bootstrapped SaaS app showing signs of growth and revenue just a few months in, with a hardware startup it’s just impossible to avoid looking like a failure by comparison - due to all the costs, delays and complications involved with getting an MVP to market. And because successful hardware startups are so scarce relative to software ones, it’s hard even to get any good advice; there’s just barely anyone around with good, relevant experience to share (and I already know many of the people who have built companies in this vertical in past decades, none of whom are in SV).
I’ve come to the conclusion that the only way to make it work is to start by achieving success as a software startup, then transition into hardware to later - but even then you’d have to convince investors that it’s worth the risk.
In short, the whole tech industry has been spoiled by easy SaaS wins over the past decade, and that’s all that most investors are willing to even consider.
The exceptions are “start-big and-get-huge-fast” plays like Groq - but the founders of that company were already highly credentialed and connected when they started, and even then vanishingly few investors are willing/able to fund new companies like that. That’s not the kind of thing young, unproven founders can pull off, anywhere.
The UK lost Deep Mind - which could have been OpenAI!! -- to Google. I think part of the issue is cultural - the level of ambition in the UK is just small compared to the US. Individual founders like Demis or Tom Blomfield may have it but recruiting enough talent with the ambition levels of early Palantir or OpenAI employees is so hard because there are so few. Instead, a lot of extremely smart people in the UK would rather get the 'safe' job at Google, or McKinsey than the 'this will never work but can you imagine how cool it would be if it did' job at a startup.
There are probably political reasons as well. Unfortunately the UK has not been well governed for 20 years or so, and hence economic outcomes as a whole have been abysmal.
Yes we have many comments on HN talking about how harmful the US VCs attitude is because they force good businesses into choosing between being unicorns and not getting funding.
I do not know the truth of it, but clearly its not obvious.
> Unfortunately the UK has not been well governed for 20 years or so, and hence economic outcomes as a whole have been abysmal.
I commented on this earlier. The UK's economic outcomes have been similar to comparable European economies (like Germany) and better than some (like France). Whatever the problem is, its not unique to the UK: https://news.ycombinator.com/item?id=42766107
I do not think the UK is well run, but I think the west in general is badly run. Poorly thought out regulation, short termism in both politics and business, a focus on metrics subject to Goodhart's and Campbell's laws, and a poor understanding of the rest of the work (leading to bad foreign policy).
My hypothesis is that this is a combination of old money and class consciousness. In other words, the rich are risk averse because all they care is preserving their wealth and the working class don’t believe and can’t even imagine that more is possible.
As a member of the working class, I find there’s little incentive to build something new or innovate because the effort required to navigate through all the burdensome regulations is overwhelming. On top of that, any additional income I might generate from bringing my ideas or initiatives to market would be taxed at more than 50%. For many people like me, the effort simply isn’t worth it. Instead, we focus our energy on other pursuits, such as family, sports, or friendships.
This shift in focus isn’t inherently bad—a life balanced between family, friends, work, and leisure is often a recipe for happiness. However, societal progress relies heavily on the efforts of a small minority of individuals who are bold (or perhaps crazy) enough to pursue their ideas. When 90% of those individuals are discouraged from taking entrepreneurial risks, society’s capacity for innovation is severely stifled.
In short, it’s clear that excessive regulations and high taxes are holding Europe back from achieving its full potential for growth and innovation.
Why would you skip having 1 billion Euros just because you could have had 2 Billion but the government took the rest? Up until 1960's rich Americans payed %91 tax, and yet they kept their entrepreneurial spirit - why you can't do the same at the stated %50?
When Apple was founded, the tax rates were %70.
I find it ironic you mention "classes" (regarding "as a member of the working class"). There are problems everywhere (either as an employee or as an entrepreneur). Feeling overwhelmed is just a feeling, does not say anything about how much you can do or if you get a reasonable workload.
I think what is holding Europe back is the people not trying and understanding various things without having lots of fears (of being overwhelmed, of large tax, of what people will say, etc.).
A balance must be stricken also between what you can do (leisure, family) and how many resource you produce/consume. The purpose should be for more of leisure/family but that is ONLY IF we (I am also European) produce/consume enough. Too many smart and capable people want to "just be an employee", which results in gaps in other places (entrepreneurs, politicians, etc.).
And/or don't think that more is better/desirable. I wouldn't consider myself working class, but I was definitely raised with the idea that making obscene amounts of money is actually pretty selfish/immoral and not something one ought to strive for. That doesn't preclude going into business. But it is pretty antithetical to the VC funding model and the creation of billion dollar businesses.
In general, it seems that the culture in America is that wealth is virtuous and confers status, whereas in Europe that at least isn't so universal and some circles it is even seen as shameful (consider that variants on socialism are still mainstream political ideologies in Europe).
I don't think I've ever seen this claimed anywhere except as a criticism.
Americans feel more pain but are also rewarded, Europe has no option but to become progressive - otherwise tere will be no more Europe and the Americans and Chinese will make us adopt their ways.
Oh, BTW, America is also struggling. The latest political developments are an attempt to change course - they are trying to become a bit more like Europe with the race and class based politics holding roots. They say they are anti-regulation anti-discrimination(of whites specifically) but the core MAGA movement is all about putting barriers and preserving old ways for the benefit of a subset of people. Americans are too in soul searching. Their MAGA literally means fixing what is no longer great but their demands are actually quite conservative and they already begin falling off with their accelerations partners.
A notion of "bare progress" is the elephant in the room. Progress is a vector. It has magnitude and direction. People talk of moving "forward or back", but science also has a steering wheel.
> and the Americans and Chinese will make us adopt their ways.
This very notion of "progress" as a totalitarian force is also dangerous. The boot is on the other foot from 80 years ago. When Europe was starting a 1000 year technological master-race, more measured minds had to extinguish that fire. I see many similarities today - people seeing "progress" simply as dominance.
I liked the brain-dump in TFA, but I think it's over-complex and too tied to a contemporary interpretation of capital investment.
We've been spooging away our talent for generations here. Look at how we treated Turing. We mismanage or sell-off everything cool we invent.
What Britain still suffers from is class disloyalty. We still have a strong but invisible class system which is now international financiers. Those sorts "float above" the ordinary economy, they are disconnected from UK interests and don't give a toss about engineering, science, knowledge, education...
Current EU is definitely not a stable and well functioning system. Look at economic conditions, political outcomes, illegal immigration, wealth inequality, societal and political trust, homelessness rates, birth rates, free speech suppression, welfare austerity, etc Everything has been going downhill since the 2008 crash. It's a powder keg.
>they are trying to become a bit more like Europe with the race and class based politics holding roots.
What are you on about? Europe doesn't have much race based politics, that's a thing America keeps pushing.
You can change mindsets with regulations that reward taking risks in new businesses/innovations, and punish rent seeking and sitting on inherited real estate for example.
But as long as EUrope is focused on maintaining the status quo of boomers and gentrified dynasties of billionaires that you probably played against in Assassins' Creed, nothing will change.
They were exterminated and replaced by a very small European population. Like sterilising a Petri dish and letting bacteria grow, the opportunities that population experienced were the biggest any population in the world ever had. Just look at a graph of the population growth of US OR California in the last century and compare it to others.
Now there is in California a population of near 40 million people.
That is not a "mindset", this is real growth that they could experience and the rest of the world could not.
I'm from EU and would be totally open to move to UK if there was an opportunity to make more there while working on something cool. But there simply isn't?
Then there are US startups where I could likely make 2 or 3x what I make in EU or UK.
So why would talent every consider moving to the UK to build a startup in 2025 anyway?
If UK startups paid equity to their devs, I would work a lot harder when I've worked at them, but startups require working hard and long hours and if I've got no skin in the game, what incetive do I have to make sure the company is successful.
This isn't just an EU thing, for what it's worth. The US is the outlier.
I hear they fixed it eventually but seems like an unnecessary loss.
Not to mention the whole idea that trying to be successful is "notions" and should be sneered at.
Edit: To compare -
Me: "I want to build a house"
Irish friends: "That's a bad idea, you'll never make it work, you'll go bankrupt and it will kill you..."
California/Oregon friends: "Fuck yeah I'll bring a nailgun"
I'm also not sure what the government can do. SEIS/EIS is a great scheme, but the SEIS limit of £250k feels almost too small to do anything meaningful, and EIS funds are generally later stage or re-investment from SEIS.
Deepmind is still in the UK. And more, including foreign, bidders driving up prices for acquisitions and investments, will lead to more people making the jump.
US vs UK investors are night and day. UK investors only want to see profitability to protect their cautious capital
20 years, or 112 years?
Consider just how far the UK's place in the world fell between 1911 (George V ascended to the throne of the global superpower; his Royal Navy was launching 2 to 4 new capital ships per year) and 1948 (3 years after "winning" WWII - and basics such as food, clothing, and gasoline were still strictly rationed).
For example, right now there is not a single VC in Canada who does large pre seed / seed investments based on an idea and the founding team.
In the US you can get a 1 million cheque within a week.
That is the real reason Canada is failing on a macro scale.
@dang hopefully I have kept this well balanced.
Without sovereign protection you just can not compete with that, ever. It's really that simple.
Simply look at China they may export loads of goods but it's predominantly priced in USD, and what do they do with all that excise USD, the only thing they can do, buy US debt. It's truly perverse.
Or look at every UK company that was bought up with those very same magic dollars.
Europe wasn’t like this for centuries. What is the cause of this mindset?
I’m curious, if you think the issue is cultural.
There are definitely political - and ultimately, military-industrial - reasons for this. The UK is deeply, deeply embedded in the Anglo-centric 5-eyes criminal superstructure, and plays a huge part in the subversion of human rights at immense scale around the world, that this criminal entity commits every second of the day.
The spook factor bleeds into every technological advancement which occurs in the UK, from GCHQ outwards, like a kraken with deep, deep tentacles.
I've worked with multiple UK-based startups which, as soon as they start to gain traction in international waters/markets, immediately becomes the target for GCHQ embedding/plants. This kills the startup.
Until the British people start prosecuting their war criminals and seeks justice for the immense human rights abuses that occur, every millisecond of every day, as a result of their out of control military-industrial oppression apparatus, there is simply no hope for UK technological industry.
The world sees this, even if the people of the UK do not - and routes around it, accordingly.
Nobody really wants to work with UK-based technology groups, knowing that they are liable for immediate corruption the moment their technology becomes relevant to, say, the people of Brazil, or Africa, or China.
You're focusing on one success story out of thousands.
90%, or more, of US startups only exist to be sold to the highest bidder or to coast indefinitely long in infinite investor money, and never turn a profit.
There's still expectation in Europe at large that your company should have an actual business plan and a path to profitability.
And yet, the UK hires were often better off after all expenses than the US hires.
Largely due to housing being slightly cheaper (other posters have pointed out, London is on par with SF / NY - the big difference being London expands, NYC and SF are both "islands" - yes SF is a peninsula, but commuting up 280 or 101 is not a pleasant experienced).
Also, even offering private healthcare (BUPA) - the UK hires were cheaper. I'm in my late 30s and reasonably healthy - my all-in, gold-plated UK policy was GBP 2k / year - I was at $2,000 / month in the US.
*However* - salaries in the UK are unsustainably low.
Three reasons: [1] BOMAD - The Bank of Mom and Dad (parents paying / lending the deposit for a house so the mortgage is at a low rate) is effectively exhausted. This means that current entrants into the housing market are either renting (which is nearly as expensive as NYC, especially after the inflationary / interest rate jump), or saving to "buy" a house (I enclose in quotes because at a 95% mortgage you don't own much of your house). [2] Professional salaries outside of finance are way too low. My fiancee works in a highly skilled, professional field and her salary in 2024 was, in nominal terms the same as my starting salary in NYC 17 years ago working for a large investment bank IN THE BACK OFFICE - where salaries were decidedly blue-collar. My unproven hypothesis is that the UK professional world is still largely geared towards those with alternative assets, private incomes (especially high-prestige non-professional jobs, especially around politics). This makes it impossible to compete with US venture backed startups, even post-ZIRP, because the offer is always going to be better. And yet that private-income driven base has largely been eroded through capital gains, inheritance tax and general downward social mobility (or, perhaps, less doom-and-gloom - averaging towards the center. The difference in wealth and income between the upper-middle class and the lower-middle class has narrowed significantly). [3] There has been over the last 5-7 years significant negative messaging and tax policy against economic success. A confiscatory top-tax band, an erosion of a "job perks" friendly tax regime and a political climate that is very anti-success, even prior to the labour govt (largely started at the same time, though perhaps not by, Theresa May's 2015 speech and focus on "Just about managing").
VC in the UK is hard, largely because the majority (though by no means all) VCs are focused on aping mid-market pension managers. Their ambition is limited to businesses that already work (and yet anything transformative by definition does not work yet) - and are interested mostly in post-revenue companies with linear or lightly superlinear growth.
This, IMNSHO, is largely caused by the fact that, given state expenditure and the corp and personal tax burden, there simply isn't enough capital for US style VC - the portfolio approach requires capital to absorb failures. Most VCs here cannot afford failure.
The closest we get is the EIS / SEIS tax policy, which allows the offsetting of losses in failed businesses (by the equivalent of Accredited Investors) - as well as a friendly Cap Gains treatment of successes. But these are largely made as common stock investments by individuals - and limited to a very small scale.
Which brings me to my final point - the SAFE note is not only not ubiquitous here, it's rare. Even pre-seed investments are either common stock or (more rarely) convertible notes. This requires a level of diligence (even on small tickets) that make capital formation incredibly burdensome.
There's absolutely a path to resolving this - but the UK first has to make a political and cultural decision to embrace startup-led GDP growth, which is has not yet made.
I could quite happily get on fine at one of those big American style startups but I don't get excited about hype, I don't have the work culture it demands and I don't have a price on my soul. I'd rather earn a lot less, have extreme stability, have better family time and balance. On top of that there's something tasteless and unethical about a lot of the big startups. Do they really bring good things to society? Do I really want to be part of that?
If I can walk away with half the money, live a modest life and stand with my principles intact, I will take that over twice the money.
I don't think this is political at all. It's not a race either and we have no innate responsibility to build things like this.
Whilst others working in software (myself included) can have a far greater quality of life and salary working in London.
The pay is clearly nothing compared to the US, but I wouldn’t say it was massively hard for them to get where they are. They all have 5+ years experience at a senior level, and are otherwise just reliable, capable, low-maintenance employees, but maybe that’s rare!
It was real respect for the trade as well, not some secondhand respect that people who make a lot of money and wield a lot of social influence get.
https://en.m.wikipedia.org/wiki/Terry_Matthews
And in general engineering jobs in Canada don't even pay as well as in the USA.
My (American) wife moved to London years ago and was a manager in a prestigious London museum overseeing 60 people.
She has over 20 years experience in some of our top museums and her salary in 2023 was a paltry £30k.
We just moved to the US and within a couple of months she has a job in museums here but now paying 2.3x the salary (converted back to £) and only managing a team of 20 people.
Less stress, more resources for uniforms and initiatives and annual salary increases here way above inflation.
As a Londoner I feel quite aggrieved by the situation. It's one thing to increase your salary 50% as a lot of engineers do moving to the US. But to 230% increase your salary is just nuts.
Only London's financial sector pay was globally competitive - but now with Brexit's rules fully locked in even that sector is slowly losing its talent and customers to Europe and beyond.
It's striking to imagine a fully functional fusion reactor that could benefit humanity, yet its creator now focuses on fintech payment systems. This highlights the importance of a strong middle class, which seems to be declining globally. A thriving middle class, with disposable income and free time, creates the conditions for innovation. Without it, even brilliant minds like Einstein might spend their entire careers working on immediate economic needs rather than pursuing breakthrough discoveries.
The salaries in Japan arent great honestly, but mine, the quality of life and how far my money goes is so much better than if I lived back at the UK. Every time I go back it seems more and more people are struggling to pay for basic expenses - and even if I moved back it seems get a great salary I'd have to live in London, which I dislike.
I imagine lots of people far more talented than me must also be feeling the pull to not stay in the country too. Its festering politically and economically. Besides family there really is no benefit to remaining.
I really want to know what we can do to fix this. As a country, we aren't building things that people want. Which means we are less powerful.
Here's one of the most generic electronic components - a 1K resistor.[1] These sell for about US$0.0015 each. DigiKey has a list of many suppliers.
There are a few old-line US resistor makers in there, including Bourns and Ohmite. They're price competitive with Chinese companies. But when you look up their engineering job locations, none are in the US or UK.[2] Plants are in Mexico, Malaysia, Taiwan, and Hungary.
To get prices down, engineers have to be very familiar with what goes on in manufacturing. If you separate engineering from manufacturing, you get overpriced designs.
Not that many people who went to a good engineering school in a first-world country today want to spend their lives inside a big factory in a low-wage country. But that's what it takes to make stuff.
[1] https://www.digikey.com/en/products/filter/chip-resistor-sur...
So I went interviewing in the engineering firms to the west of the country. Aerospace, materials, that kind of thing. Someone offered me £12K/year. Even for a student, that seems kind of low as I'd be looking for a short term accommodation somewhere. I kept it secret from the business school because I knew they'd pressure me to take it.
A couple of weeks later, I got an offer from Intel. Not in engineering, but in marketing. £15k, just about enough to pay rent and eat. But a lot more than engineering. I took the job and has a great time, and I still know people there. Turned down the return offer, due to the firm itself seeming a bit complacent, but also...
During the internship I went to see my friend in central London. He had landed the coveted Goldman's internship. Fully paid apartment for the period, with a view of the river, plus money. £37k/year if you include the free rent.
So when I went back to university for the final part of the degree, it was clear where I was going to look for work.
I got a job at a prop trading shop, and in the first week a guy told me about his story. He had originally taken one of the jobs in the west country, some sort of aerospace engineering. He had accidentally seen his boss's paycheck, and that made him start looking for work in finance.
These days, what are your options realistically in this country? Particularly if you want to hang around your family in the south?
Finance, big law, consultancy, certain US tech businesses. I don't even understand how doctors live here.
The problem with labourers who work in these secondary markets however, is the same as the guards who watch the gate: they can extract large tolls for being in the right place at the right time.
People in finance are rich because they're well-placed to skim highly productive traffic. However, it is -- in the vast majority of cases -- only skimming. The system functions very well to take unproductive surplus and allocate it effectively.
Though admittedly today, the larger beneficiaries are increasingly monpolies, and so on. But this isnt a side effect of the finance industry, but of the state.
Actual efficiency would dictate that there be only a relative handful of finance jobs, let alone very well-paid finance jobs. And that the vast majority of the money go to actually productive industries. And that the financial markets understand the principles and timescales of other industries, so they don't screw everything up with decisions equivalent to "Fiscal quarter ends in June, and Farmer Jones says he can harvest zero corn by then. Shut him down."
I think most Doctors etc need to wait until they're consultants until they make decent money.
But I'm like you - fell into banking due to being a Lotus Notes developer when it was flavour of the month and have never left. I reckon I'm on over double what I would be if I'd ended up working for IBM or Cap Gemini or similar.
[And I should say I ended up in project/programme/change management. I'm not still a Notes Developer]
A doctor is also a kid who got full A grades as a high school graduate. They'd have the pick of what university course to do, and then they end up doing this thing that takes until you're 30, with insane nighttime hours. It just makes no sense to me that there are still kids who think this is worthwhile. It's not even as if you are guaranteed to be allowed to specialize in what you want either, that's a battle with all the other top students.
Yes, because the number of med school places in the UK is limited by the government (because they have to fund the extra cost of the course over what students pay in tuition fees). You don't really need to be that smart to be a doctor.
A consultant gets £100k -> £140K ish from the NHS. However, many supplement that with private work and therefore make significantly more.
Now, sure, that salary might be too low, and working for the NHS seems like hell but it would seem the money isn't the main obstacle. Maybe not right now for 2 years ago that was a very good pay.
There are other pay-related issues. Marginal tax between 100 and 150 or so is incredibly high, around 60-70%. This is because many nasty things kick in there. Tax free allowance shrinking for example. Doctors are double screwed in some cases, as by law they have to contribute a lot of their salary to pension, and in this threshold often exceed their allowance - which is a real kick in the nuts, seeing how they can't reduce it, and anyway, pension saving should always be seen favourably in a place like UK. These are by the way some of the reasons for doctor shortages in the UK, senior doctors have little incentive to work harder, many cut their hours with little difference to their net pay.
But these aren't strictly linked to their headline salary.
[1] https://www.healthcareers.nhs.uk/explore-roles/doctors/pay-d...
It’s like textbook Baumol’s cost disease[0], except housing is rising fastest while the cost of labor nearly not at all, because buyers (hiring firms) just don’t buy
The university careers person said five banks would each take all fifty of us, just on the basis of us being Imperial College students, so we should apply them and forget anything else we were interested in as it wouldn't pay well. She couldn't understand the person who wanted to work at a computer game company.
We complained to the head of department, who was furious. A short time later there was a new careers person.
If your focus is money then higher education is the wrong path anyway, it’s oversubscribed.
Anybody who moves from engineering to finance doesn't have their heart in engineering - which is fine, but its not like they had no choice.
Agree though that London and parts of the South place extra pressures on people looking to build a life and home.
Ahhh, the classic no true engineer / scotsman argument ... I couldn't possible be an Engineer because I like hard software projects with smart people, good budgets, and tight deadlines.
In 2013 I was working as a CTO in London, managing a team of 40, and I could just about afford a run-down 2-bedroom in a just-ok part of Zone 1, assuming I wanted to make some savings too. My salary wasn't bad for the role, outside of banking. Anyway, that was pretty much the end of living in the UK for me.
I see what our engineers are paid and its genuinely concerning.
Eleven years ago during my MSc. in theoretical physics I was writing Fortran code to solve scattering equations to serve as input into quantum field theory calculations. Since then I've worked for a bunch of startups, alternating between writing boring backend services and doing 'data science' that is often no more complicated than linear regression or writing SQL queries. The continual hype, toxic positivity, and unhinged growth expectations has made me essentially tap out mentally. I also consider this a 'waste of my talent' (not that I was ever really a great physicist!), but as I get older I am no longer sure what would have satisfied me in that regard (is this bad or good? - I honestly don't know). More money would be nice I guess. I typically get bored/frustrated and change companies every few years - I'm currently 3 years in at a fintech (elixir backend).
I was at an event recently where everyone was excited about a programme to create thousands of new apprenticeships in the steel industry in the region, and sat at the one table of tech people I couldn’t help feel they’d probably do better if you just taught them to code, even in this job market. Or alternatively if we actually want a steel industry to challenge China let’s do that. But no half measures.
The UK has vanishingly little risk capital compared to the US. It has very few exits and almost no secondary, so what angel money exists is often tied up long term. The British Business Bank are trying to convince more pension funds to expose their assets to the risk/return of VC funds but that’s a long and controversial battle. Startup investing is largely driven by income tax breaks rather than dreams of outsized returns. And of course property is such a reliable investment in the UK that it sucks up most of the free money anyway.
A lot of this is (the lack of) network effects and we get grumpy if you say it’s a cultural thing. But just once I’d love to hear someone saying they’re investing in their local ecosystem, or creating an accelerator, or whatever, because they want to make loads of money. That isn’t something you can comfortably say out loud at most startup events in the UK. Lots of talk of Impact Investing, an endless merry-go-round of gobshites wanting to give advice and mentoring, or “do you have any “SEIS left?” Lots of tech agencies working on making other people’s ideas go big, selling reliable hours instead of unreliable equity. And a good enough quality of life that all this is fine!
But it can be really hard to find somewhere to plug into and get the energy from. Kudos to those that are making/have made the slog here.
> Hardware is riskier than software: No longer true
If you're building hardware you need to source materials for the thing, manufacture the thing somewhere, store the thing somewhere and distribute the thing. All steps that either don't exist with software or are orders of magnitude easier. All this stuff costs money and adds risk, making hardware inherently harder and riskier than software.
Obviously building stuff is still possible, but if you're going in with a VC "how do we scale this to 100 million users in 2 years" mindset then there's a lot of logistics in there for hardware.
For all intents and purposes, Venture Capital is dead in the UK.
While companies do get funded in the UK and are technically "UK domiciled" - in action most of their Engineering and Product teams are located in Eastern Europe or India, or are startups from those markets (and China) who domiciled in the UK to raise from foreign investors.
There just isn't enough liquid capital to invest in the UK compared to other investment classes available.
IMO the whole attitude to finance here is difficult because not enough people have become rich through software/electronics to be angel investors. It's still a place where the big old money comes from people in banking. The arts are respected, being rich is respected, but the rest of us are still "techies" and that's an attitude prevalent throughout the population. The person who fixes your washing machine gets called an "engineer."
It's a matter of who has the power.
Success breeds success and we have had some great ones - it's just that the whole economy is still skewed towards finance. People want the pound to have a high value. Investment comes here to seek "safety". Costs are high. Everything is short term. We have "spaffed billions" on leaving our local trading bloc but moan a lot about investing in HS2. In other words we're not really united and trying to build a future. The population is aging and some of it thinks "only a few more years for me" and "I'm alright jack".
Do I really know? This is all just the bullshit whirling around in my head.
There's a chance with net-zero. It will require huge investments. If you want to do hardware then I suggest you think about that. Octopus Energy's Kraken system, heat pumps that work together to spread out demand over the day, home energy controllers, battery chargers ...who knows. One word of warning though: I'm actually from Africa and any idea that ends with "....for disaster relief in Africa" is a mistake. If your idea only works in poor countries then I think you'll never make any money. Nobody really cares significantly about disaster relief, especially the potentates of those countries who have allowed the disastrous situations to occur through their own mismanagement.
to transport (https://en.wikipedia.org/wiki/Advanced_Passenger_Train https://en.wikipedia.org/wiki/Tracked_Hovercraft https://en.wikipedia.org/wiki/Hovertravel https://en.wikipedia.org/wiki/Sinclair_C5 https://en.wikipedia.org/wiki/Maglev#Birmingham,_United_King...)
to chip design (https://en.wikipedia.org/wiki/Inmos transputer, static RAM, VGA standard).
Interestingly, the 3 British designers who made up Flare Technology, had a big influence on console and computer designs in the 80s/90s: They were responsible for the ZX Spectrum (partly), Konix Multisystem, Atari Falcon, ATW (and Blossom graphics card), Atari Jaguar, Super FX chip, Nuon
The job market is not prepared to fulfill the promises the talent expects, and in places like SV, what you get is the STEAM version of Hollywood, where every waiter dreams of being the next movie star, and there can only be so much.
The history of canals, bridges, roads, railroads and lighthouses in the UK is littered with people blowing wads of money up. Speculation was rife. I think it led to caution which has stayed with us across the victorian era into the modern day.
If you want an object lesson in "god, could we do this better" -I was told Australia had world-class optics industry, at the end of WWII due to the need to diversify the supply chain and get away from European sources now in the Axis. Russia and Japan seized the day, while Australia basically _shut itself down_ and gave away any market lead. People laugh at russian cameras but the glass was excellent, they got half of German tech at wars end.
The US has some defense jobs that pay well (but are immoral IMO), and there are some gambling-machine related jobs that pay well, but otherwise engineering pays really poorly.
I used to work as an embedded engineer in Slovenia, in the automotive industry, and wanted to potentially move to Germany or Austria or Switzerland to do something similar. After interviewing with some really prominent companies, household names if you will, and seeing their offers - I bushed up on my CS and switched to finance.
Finance has done well in the UK due to London and having a significant number of firms in a single place. I can get a new job for a different company, doing a similar thing, in the same building.
How does that work for any other industry in the UK?
Its no wonder that wages haven't risen when moving job also requires you to move house/schools/away from friends and family.
We need the government to get involved and create regional hubs for different industries and really facilitate giving them everything they need. Address transport, power concerns, housing, labour and education requirements. The government is in a far better place to be able to influence across all these requirements.
Engineers are, ultimately, problem solvers. Some problems are hardware - electronics, mechanical, electrical, production, and so on, but the space of problems we've been trained to solve is a lot bigger than that - If you can see feedback loops, you have a future in commodities, banking and finance. And, as we recently learned the hard way, in politics as well. We are all trained to identify sub-optimal solutions and to have an almost irresistible itch to solve them.
One quote I love is that "scientists see the world as it is, while engineers see the world as it could be".
Genuinely baffling. What is talking about? Most hardware jobs involve sitting in front of Design and simulation software.
> "UK's small market limits growth."
(followed by a list of companies founded before we put up trade barriers with our largest and closest single market)
I do not believe I could have achieved what I have in the last half-decade if I had stayed in the UK. There is something deeply rooted in the UK's contemporary culture (which I cannot yet fully explain in words) that serves to crush the individual ambitions of the working and middle classes.
they could be figuring out how to get people to click on ads
With compensation catching up in developing economies, it will make less and less sense to move production outside a "wealthy" country, and you'll see resurrection of domestic hardware companies.
Right?
How far away are we from the tipping point is beyond me, though (and there are always "cheaper" countries still, even if it's mostly due to lacking legislation and environment protection rules).
If we want higher salaries then the uk needs to start creating meaningful and impactful products that other countries want…
I hear ya on this, and it's not just the setup costs, or the testing or the certification... It's a non trivial task to run a hardware company. Even the stuff you don't expect. For instance, a good friend of mine founded a health startup that makes wearables, and they were almost torpedoed in the first year of operation by some mouthy influencer who went about publicly calling their beta release product a fraud. This is despite the fact it worked and did what it should.
"Your brain's worth billions. Build empires, not apps."
[1] because the implied higher margins mean this attracts more investment
> Is it just me or is UK’s hardware scene really kicking off again?
> Founder friends have just raised millions, moved into massive warehouses, imported CNC machines and some started metal casting.
> Even SaaS VC friends are talking about hardware now
Secondly the government acts as an economic terrorist by stopping innovation. Search engines and social media are a classic example by treating them as publishers so the owners are liable for any copyright infraction. No one is going to build a company with the threat of being prosecuted over the actions of one of their users. This goes for hardware as well, e.g. the government brought in the EU regulations on drones, which bans the flight of autonomous drones and thus stops innovation. This means people like myself who were working on autonomous drones had to stop, causing me to lose out on millions in revenue and the government missed out on the taxes I would have paid.
Short of a revolution or an economic collapse nothing will change. The latter is baked in at this point, when and how bad it will be I do not know, I'm hoping for the best and planning for the worst.
> Consider: Dyson: From a Wiltshire barn to a global technology powerhouse, now innovating in Singapore and Malaysia.
The founder of Dyson is a Brexit proponent who enjoys outsourcing and playing games with tax havens. I doubt he's doing any "innovating" in those places.
Does OP think CS prodigies are building world changing stuff? 90% of the top 1% are building SaaS. Perhaps the 0.01% get to work on actual foundation model ML research or cutting edge theoretical CS. Everybody else will optimize buttons in CSS to pay their bills. Software just pays more, it isn't an exception to economic forces.
Cost of life in the UK is only high in London, and remains lower than California.
I remember working as a software engineer on £32k, and I could still afford a 3-bedroom house with a garden, garage and a car.
The difference between Germany and Britain is that Germany still has large, successful and innovative hardware companies and it still has decent engineering jobs. Britain has lost them, together with the companies which once offered them.
But these jobs didn't vanish into thin air, they vanished to India and China, which now control the companies making "British" cars (MG, Lotus, Jaguar, Landrover, etc.).
There is the delusion in many Western people that e.g. China just can not do proper engineering and that outsourcing jobs there will not work. This is false. Most engineering jobs people do can be done just as well by people on the other side of the world for half the pay. The only reason you get paid twice the money for the same thing is institutional inertia, a company can not move it's development all at once to there other side of the world, so there need to be people locally to do engineering, even if it is more expensive. This is not something which will remain true forever.
These Hardware jobs are paid terribly because they well paid for the global market rate.
It is not geography, or lack of innovation or VCs. It is outsourcing.
> Geographical Constraints: Unlike lucrative software jobs, hardware engineering demands physical presence.
Not completely true. Our engineers take hardware home, and I have a mini-lab at home for developing hardware. If COVID2.0 kicked off tomorrow, we would be robust against this.
> Venture Capital: European VCs, mostly bullish on fintech and SaaS, remain wary of hardware. Result? A feedback loop of underinvestment and missed opportunities.
Extremely true. I cannot overstate how wary of hardware investors are. As with software, you have two types of hardware: research-based and engineering-based. Engineering-based hardware is actually quite low risk if the risks are well understood.
> Innovation Stagnation: We're not just losing salary differences; we're missing out on the next ARM or Tesla.
100%. Even when the UK accidentally creates the likes of ARM, it always fails to stop it being purchased by other Countries.
> False. London is around the same as NYC and more expensive than most parts of California and definitely Texas. This also ignores:
I'll put some numbers to it. If you want a house share (one bedroom, shared common rooms and utilities), at a £1600 budget you will struggle to find somewhere. On a £25k salary, losing £5k to pension, etc, your ENTIRE salary goes on accommodation. If you are one of those pesky eating humans who sometimes requires clothes, travels to work, etc, it's literally impossible.
> "UK's small market limits growth."
In any situation you have to realise the opportunity. As the article points out, the hardware engineers are 25%-50% of their US counterparts at the same quality.
> Your next unicorn isn't code. It's cobalt and circuits. Back the tangible.
It's actually a mixture of the two. Software and hardware working in tangent. The barrier to entry with software is very low, it's difficult to compete there. The barrier to entry to hardware is higher due to time and costs, you can work there and have less concern about competitors.
The profit margins are also far higher, as there is a tangible thing, there is a greater perception of value. You buy <Software> and it takes a year to develop. You spend another year writing <Update>, people expect to get it for free, despite the same resources being applied. When you buy <Hardware>, the next iteration which is a year of <Update> can be sold at full price, and people will pay it.
That is a large disincentive for working in a tech company versus finance. Tech companies especially start-ups largely pay in stock which could be mispriced and you make more (or less) money than could be predicted. But versus finance paying pure cash, less (equity) risk, and a lower tax rate the incentives are clear.
HMRC I don't think should be underrated in their effects on answering the question -- "should I start my start-up in the US or the UK?"
Canadians and Mexicans have TN, Australians have E3, Singapore and Chile have H-1B1 (a subcategory of H1-B but with its own quotas).
https://www.uscis.gov/working-in-the-united-states/temporary...
Most foreign engineers in the US (outside of H-1Bs) are actually Canadians.
But there are no easy visas for the UK.
At 20? Sure, who cares. If you've got a house, kids in a local school? The level of stress about being abruptly thrown out of the country seems untenable.
I would expect that dynamic to suppress wages for immigrants (as you have fear to keep them in line instead). Healthcare seems to be similarly set up to frighten people into staying in their current employment.
This perspective might not be accurate, but it's why this British engineer is unwilling to move to the US.
Plus if you're a UK-based person with a STEM background, the fintech industry will pay you a lot of money if you're willing to do their dirty work.
The work culture, social and economic stability are terrible. Education is expensive or poor. Regulation and standards are poor. Not a good place to bring up a family.
Pay engineers billions, then, not CEOs, VCs and shareholders.
The lack of UK hardware startups is due to the lack of local VC appetite and the unwillingness of US VCs to fund a non-Delaware incorporated company. Therefore the investment from a VC to a startup is generally "bounded" by geography.
The lack of UK VC appetite is due to the fact that there are just not that many LPs that want to give their money to a UK VC given their choice internationally. The LP investment to VC is "unbounded" - meaning it just follows exactly where the returns are highest.
What we really need is for UK startups to break the international border between silicon valley and the UK (or anywhere else for that matter). This means setting up a Delaware C corp, selling to the US, but keeping most of the talent in the UK.
I come from an unprivileged background, my father joked that he might leave me an empty bottle of whisky when he died. I went from making 20k USD at my first job to over 800k per year.
Taxation never particularly blunted my avarice or desire to advance further, and I never minded paying my taxes either. Frankly, only two things ever really slowed me down: the good old boys clubs in Europe, where if you haven't gone to the right schools, they treat you like you're supposed to be a slave rather than expect a slice of the pie... and the good old boys clubs in the US, where unless you're in CA/NY, well, again, how dare you expect a slice of the pie.
If I could, I'd gladly try to get richer than Musk, and honestly, fuck the taxes. Having miserable poor people around me sucks more than paying taxes. I'd rather they enjoy some of my success too. That way I can hire fewer bodyguards.
Much better to have partied and taken a lightweight major. Those extra 400-500 euros simply don't make up for the wasted youth reading Tannenbaum.
You cannot steal it from us and relabel as british! No, Sir!
BTW: your examples stink.
From first to last one:
> Sarah: Built a fusion reactor at 16. Now? Debugging fintech payment systems.
Nice, but that fusion reactor? Where is it? Did she really accomplish something?
All these cool "save the world" school projects exist because the current people running the world are deciding what is and isn't a priority and haven't fixed the problem in question; When these students grow up and go on to work for those same people, we are shocked, shocked that it isn't to do more unprofitable school engineering projects.
Instead: Finance industry stuff. What we really need, and by we I mean the people in charge who are obsessively keeping score of imaginary numbers in an account.
Unless the whole world was to demand the same standard of living (which is impossible), or global trade is limited, there will be nations where the wealth of the average person is on the decline.
Rebuild into socialism?
Rebuild into communism?
Reset into early stage capitalism (lack of regulation and all)?
How do you know that those systems won’t also have their own late stage failure? Case in point, the NHS right now.
(Edit, posting too fast: To the person below who suggested 90% tax rates; the US never had those rates. On paper they did, but they had more and larger exceptions than now, to the point the effective rate never exceeded 45% anyway. This is also why the massive cut was politically palatable - it was cutting the rates to closer reflect the reality. At no point did the US ever have anything close, or even half close, to 90% effective rates.)
What you've described - the need for people to have autonomy, value, and ownership over the work they do - is the core tenet of Marxism.
Capitalism seeks rent from having capital, so the obvious optimization is to squash the ability to demand higher wages (original Marxist argument about "ownership of means of production" was how big capitalist controlled access to machines you needed to the work, thus being able to depress the wages)
Suppression of wages is very much a feature of capitalism (the company's mission is to acquire capital for shareholders; technology that lowers costs by reducing the need for labor, or reducing the payment for labor, is a goal); whereas socialism holds that those who do the work should benefit from their labor (workers should own the means of production).
A "socialist" company in the U.S. would be an employee-owned company or a co-op (like REI) though they would never call themselves that because Americans don't understand what socialism is (and have been taught that it's "evil").
The solution for the UK, the EU and Canada is simple but politically anathema: cut taxes
A 2018 study shows tax increases significantly reduce innovation. A 1% increase in the top marginal income tax rate leads to a 2% reduction in patents and inventors, while a similar increase in corporate taxes causes even larger declines.
The study is quite rigorous too:
https://www.maximum-progress.com/p/tax-cuts-and-innovation?r...
I mean, not really
It's a problem of class warfare - government hates working class, including the current Labour government - that despises the working class in particular. They don't want ordinary people to develop skills, start businesses. They want them to slave away in foreign big corporations.
You don't have to look hard for evidence - PM jets around the world asking foreign big corporations to hire British slave workers, instead of spending time home and creating environment for local business to thrive.
Skilled jobs are anathema to the ethos of the people in charge of the UK’s industrial policy - who have never held a skilled job in their life - as they would prefer everyone to be a backbiting, striving social climber like them, either moving money around of gumming up the system with endless bureaucracy.
This trend is exhibited in many of the ‘developed’ economies but it is particularly strong in the UK, a country fooling itself with delusions of grandeur while, like Wilde’s picture, its foundations gnarl and ossify and crumble, like dust into the dustpan of history. Next…
Software is incredibly valuable, but there are other technology areas that are much harder and equally as valuable (if not more so when augmented with good software).
A lot of software engineers who only know the last 20 years have inflated egos as results.
How many technology experts suddenly became public health experts overnight when COVID-19 hit? And how many of these same people continue to parrot the same bullshit after over 1 million American deaths?
Seriously, I feel bad for our British bretheren. The UK government is seemingly out of control and actively working against the people. There are also long-running geopolitical trends like outsourcing to contend with. Talk too much about these things and you're probably getting sent to prison. It's time for the US to bring some democracy to the UK lol.
What have I done to make the country worse off?
Easier said than done, Europe doesn't have the money for that (partially because all the exit money circulates in American VCs).