BANKING HUMAN CAPITAL

With roughly half of all start-ups founded by individuals without a direct academic or prior industry background in the start-up’s field, we ask: What does it really take to win big in the Innovation Game?

This week an IMF article opened with the following statement, The US innovates, China replicates, Europe regulates.*  It then cites the example of the EU’s ‘infamous’ Artificial Intelligence Act ‘which governs AI even though the region has not yet produced a single major player.’

Adding:

‘Productivity in US technology firms has surged nearly 40 percent since 2005 while stagnating among European companies… US research and development spending as a share of sales is more than double what it is in Europe. No European company ranks among the 10 largest tech companies by market share.’

But is it just a matter of investment in R & D within commercial organisations that drives innovation within and across nation states?

And what part does the general level of Human Capital and Entrepreneurship Training across entire populations play?

Because best we can tell, precious little R & D went into developing the game-changing new technology that enables you to read this now, as text, rather than trying to decipher hundreds of metres of forearms and quail-chicks, palm-trees and crocodiles.

"Ladies and Gentlemen, I give you the most important innovation since the invention of fire… The Alphabet!"

Our best guess as to the original inventors of the original alphabet was that it was put together by a bunch of semi-illiterate immigrant labourers mining turquoise in Egypt around four thousand years ago.  Turquoise was big business in 2,000 BCE, as a top fashion pick for high-end Bronze Age Bling, and time was money for these Canaanite-speaking** sons of toil.  Of course, Egyptian Hieroglyphs looked great on the side of a temple or the walls of a tomb, but they were really heavy going when you needed to order new chisels or send the apprentice out to get your salt beef on rye.  So the miners created their very own form of symbolic writing (the original Pitman’s shorthand?) which replaced the 750-800 signs then in use in Egypt with an alphabet of around 30 letters, all of which were consonants.  

Flash forward a thousand years (give or take) and another Canaan-ite speaking crew, the Phoenicians, refined the alphabet to 22 letters, still all consonants, with readers inferring the vowels by cntxt.  (you see what I did there??). Unlike their turquoise-quarrying cousins, these maritime merchants had built up a global trading network supplying another fashion must-have for the ancient world’s elite, the colour purple. The preferred pigment of choice for kings and emperors, priests and aristos, Tyrian Purple (named after the Phoenician capital, Tyre) required boiling the mucous glands of thousands of sea-snails to produce a solitary gram of precious dye. So precious in fact that sales missions from Phoenicia (literally ‘the purple land’) even reached as far afield as the remote (but tin-rich) island of Britain.***

The final piece of the jigsaw

At some point between 850 BCE and 825 BCE, and (probably) on one of the larger Greek Islands in constant contact with Phoenician shipping (such as Crete or Euboea) someone had a Eureka moment. We don’t know if they were also in the ancient fashion business (and/or in the bath) when inspiration struck, but we do know that, like The Highlander, there can be only one:

‘This can only have been the initiative of a single individual, because it only happened once at a single point in time.  As well as borrowing the symbols of the Phoenician script to represent similar-sounding consonants in Greek, this individual picked out four other symbols that represented Semitic consonants not needed in Greek and invented one new one, so as to represent the five basic vowel sounds that are still found in alphabets today.’ ****

The total number of combinations  that can be made from a 26 letter alphabet (like the one the English language borrowed from the Greek) is, approximately, infinite.

And while the Oxford English Dictionary currently only lists 600,000 meaningful combinations of letters (aka words) of which only 50,000 to 100,000 are in everyday use, each individual combination of letters can be combined with others (into sentences, paragraphs, books, plays and screenplays ...and blogposts) to identify, describe, articulate and communicate precisely 100.00.00.00 percent of everything in The Known Universe.

And not a single boffin, project-plan or tax credit was used in the making of this miracle. Just Bronze Age bling, boats brimming with smelly sea-snail slime, one bloke’s brainwave ...and 1200 years’ fairly random distribution of the creativity, expertise, problem-solving, learning, adaptability and collaboration, that still, to this day, makes up the real secret sauce of innovation …Human Capital.

The IMF piece concludes on a positive note for European innovation:

Innovators, venture capitalists, and academics agree that things in Europe are moving. “For the first time, the EU Commission has a commissioner dedicated only to only to start-ups, research and innovation,” notes Francesco Cerruti, director general of Italian Tech Alliance. "But there is a need for translating words into action. And fast.”

And while none of the nameless pioneers responsible for the alphabet (along with the aforementioned words of Signor Cerruti) were ever able to patent, copyright and monetise their work, let’s hope that their heirs and successors, in Europe and the UK, will be afforded the support necessary to convert their invaluable Human Capital into spendable shekels without having to move out of Europe and the UK in order to do it.

DT 21 June 2025

 *Europe’s Innovators Are Waking Up, International Monetary Fund Finance and Development Magazine, June 2025

**A sub-group of the Semitic language family which includes Akkadians (Babylonians and Assyrians) Hebrews (Israelites) Arameans, Phoenicians and Arabs

***Tin was the ‘rare earth’ of the Bronze Age, because you can't make bronze without it.

****Roderick Beaton’s totally brilliant The Greeks, A Global History