ALEX BRUMMER: Adobe’s Figma takeover puts UK’s digital design industry at risk

Efforts to roll back the oligopolistic ambition of big tech usually end in a victory for the West Coast, as was seen with Microsoft’s takeover of Activision Blizzard.

Microsoft’s burning ambition to keep ahead of the artificial intelligence (AI) pack was seen last week when it temporarily swept up pioneering executive Sam Altman, before he reverted to OpenAI.

In the latest shot across the bows of Silicon Valley, the UK’s Competition & Markets Authority (CMA) is objecting to the proposed takeover by Photoshop owner Adobe of cloud-based designer platform Figma. 

In the same way as the Microsoft-Activision deal challenged Britain’s status as a global leader in the creation of new games, the $20billion (£16billion) deal for Figma would compromise the UK’s much bigger digital design industry.

The sector (in which one of my offspring works) is worth a whopping $60billion (£48billion) to Britain’s economy and employs a stonking 850,000 people, according to CMA analysis. 

Takeover threat: The UK's Competition & Markets Authority is objecting to the proposed takeover by Photoshop owner Adobe of cloud based designer platform Figma

Takeover threat: The UK’s Competition & Markets Authority is objecting to the proposed takeover by Photoshop owner Adobe of cloud based designer platform Figma

Allowing Adobe to trample over Figma would stifle competition. It would cede enormous pricing power to Adobe and potentially smother British ingenuity.

The US, thus far, has done precious little to suppress Silicon Valley’s love of bigness and pricing power. 

The big losers when big tech wins are consumers and innovators. As chief executive of the CMA, Sarah Cardell is showing true grit. 

She should not let Rishi Sunak’s cultivation of Silicon Valley get in the way of open architecture and choice.

Flying high

Few chief executives can boast such a jet-fuelled start as Tufan Erginbilgic at Rolls-Royce. Under his stewardship, the share price has rocketed some 175 per cent this year, making it the best-performing stock in the FTSE. 

How can this have happened so quickly at a complex engineering group where turnarounds take time? 

Clearly, the market had Rolls-Royce wrong. It has underestimated the durability of demand for wide-bodied jets especially in fast growing Asian and Middle-East market and a Rolls-Royce Trent engine still has enormous prestige.

What ‘Turbo Tufan’ has brought to the group is a confidence that, through transformation and cost-cutting, he can deliver vast margin improvement.

The goal of 15-17 per cent margins by 2027, against 2.5 per cent this year, is eye-popping. 

He is being ruthless about axing technologies which are going to take years to deliver, such as electric planes and hydrogen fuel research. Instead he is relying on Rolls’s super-efficient UltraFan engines and sustainable fuels to reduce carbon emissions.

Erginbilgic is not ready either to ditch Rolls’ ambition on narrow jets, popular on European and some trans-Atlantic routes.

The investment will be substantial and a joint venture with a US plane-engine maker looks likely.

He wouldn’t be so confident about this unless he already had a deal in mind.

The real money spinner for the future is small modular reactors (SMRs). Rolls has been way ahead of competitors on this but fears foot-dragging in Whitehall.

A cumbersome competitive bidding process will give the advantage to other players, notably Hitachi-GE with governments behind them less inclined to be short-term in ambition. The potential market could be in the trillions of dollars.

Another slow burner is defence. It has an enormous market to aim for as military budgets across the world are increased amid geo-political stress.

The possibilities include more turbines for ships as well as engines for next generation combat aircraft including the Eurofighter Typhoon. The Rolls-Royce boss has re-created the excitement. Now he must show he can achieve beyond the quick fixes.

Bashing branches

Metro Bank may be a serial disappointment to investors and a nuisance for regulators, but its retail outlets – which have brought 2.7m customers into its banking halls – display that the public still likes branches.

NatWest finance boss Katie Murray is still on a mission to slash and burn with 157 more branches scheduled for closure this year and in 2024.

This may spruce up costs ahead of a proposed retail share sale for the 38 per cent government-owned bank but is a destroyer of customer service, high streets and huge inconvenience to the elderly, small enterprises and anyone without the benefit of online skills. Scandalous.

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