ARM sale to SoftBank: the UK should be more than a technology incubator

Today the news broke that ARM is to be sold to Japan’s SoftBank, a global telecoms and media group with little experience in semiconductors. This is another example of the UK acting as an incubator of technology companies: we found them, we grow them and then we sell out.But SoftBank’s acquisition of ARM is more significant for the UK technology industry.  For years ARM has been the standard bearer, a company that could stand on the global stage and represent the best of British technology and innovation. Since the sale of Autonomy and the implosion of Imagination it stood pretty much alone. So this is a big blow to our pride – who can we point to now to represent the UK technology industry?SoftBank is promising to safeguard (and in fact grow) ARM jobs in the UK as it reaps the benefit of the opportunity provided by the Internet of Things. This is great to hear - and sensible - because ARM has a wealth of talented experienced engineers around Cambridge that would be difficult to find elsewhere. However, we have heard these promises before and our laws controlling foreign takeovers provides little protection for our industry.Theresa May is aware of this: “…May has put foreign takeovers on her radar of business dealings that may be bad for the national interest”, commented the BBC.The UK seems incapable of building and then holding onto global technology giants, unlike other countries. Korea, with its smaller population, manages to do very well (Samsung, LG). Maybe we lack ambition, maybe our government doesn’t provide enough support and enough protection, maybe our technology companies are insufficiently diversified to grow into giants. Probably it’s a combination of all of these factors and more, but sadly, I don’t see things changing.One thing is for sure however, and that is ARM is another example of the UK’s ability to start great companies based on engineering and innovation that grow, dominate their market briefly and then get sold to foreign owners. We should know; Wildfire clients have previously included CSR (sold in bits, to Samsung and Qualcomm), Wolfson Microelectronics (sold to Cirrus), Picochip (sold to Intel) - we have seen many examples over the last 30 years.There is a line of economic thought that places the UK as a country whose role is to found companies, grow them to be valuable entities, realise the value by selling to foreign companies, and start again. A process of continual reinvention.This is probably a workable approach. In fact, it seems to be the one the UK is following right now and not just in the technology sector - (think energy production, steel, cars). I have a problem with this approach because I believe it means we lose control on important aspects of our economy. Surely we want people based in the UK to decide what is best for our industry.But congratulations to ARM, a great company which has led the world, made the UK proud, and is now delivering to its shareholders.