Champion of The VC State

"U.K. finance chief Rishi Sunak embraces the moonshots model"

- By Cristina Lindblad

There is no subject that divides economists quite like the role of government. The left wants it big. The right would limit it to correcting market failures. Now, though, they’re finding common ground in a new concept: the venture capitalist state.

Vaccine rollouts in the U.K. and the U.S. demonstrated that governments can be both big and deeply capitalistic. Operation Warp Speed in the U.S. saw an initial $10 billion in federal funds committed to seven pharmaceutical companies for speculative drug development. Similarly, Britain’s Vaccine Taskforce provided £900 million ($1.2 billion) of upfront cash commitments for a portfolio of untested jabs.

The sums involved were large, but more striking was the way they were deployed. Taxpayer money was put at risk in the hope that one or two bets would pay off big. It was no coincidence that the head of the U.K. task force was Kate Bingham, then managing partner at SV Health Investors, a life-sciences venture capital firm.

The country has a champion for this model in Rishi Sunak, the Conservative Party chancellor of the exchequer. He was an avowed believer in the small state when he became a member of Parliament seven years ago, but—like all finance ministers during the pandemic—he learned to embrace big spending.