UK Business Secretary Peter Kyle has shredded the free-market rulebook, declaring the state will now "pick winners" to rescue Britain’s stagnating economy.

Speaking from the icy heights of Davos, Kyle’s message was hotter than the coffee at the World Economic Forum. The UK government is moving from a passive observer to an "activist" participant, ready to inject billions into companies they believe can scale. It is a gamble that defies the Thatcherite consensus of the last forty years.

The Death of Laissez-Faire?

For decades, the mantra has been "let the market decide." But with the UK economy predicted to grow at a sluggish 1.5% this year, Kyle argues that waiting is no longer an option. "I am betting big. And I am picking winners," he told reporters. This is a profound shift. It means the government will use taxpayer money—potentially billions of pounds (trillions of Kenya Shillings)—to buy equity stakes in high-potential firms.

The strategy involves the state-owned British Business Bank taking direct stakes. A prime example is the recent Sh4.2 billion (approx. £25m) investment in Kraken, the software spin-off of energy giant Octopus. Kyle sees this as the blueprint: identify the scale-ups, fund them, and watch them hire thousands.

What Kenya Can Learn

This "activist" approach resonates deeply with Kenya’s current economic discourse.

• State vs. Private Sector: Just as Kenya uses institutions like the Kenya Development Corporation (KDC) to spur growth, the UK is realizing that private capital sometimes needs a state catalyst.
• The Risk Factor: "Failure leads to success," Kyle admitted. In Kenya, where "white elephant" projects are a political hot potato, such tolerance for risk in public spending is rare.
• Scaling Up: The focus is on "scale-ups"—companies that have passed the startup phase and are ready to explode. Kenya’s tech ecosystem, the "Silicon Savannah," is crying out for exactly this kind of "picking winners" support to turn our fintechs into global giants.

The Davos Context

The backdrop to this announcement is a Davos summit overshadowed by global trade tensions, including Donald Trump’s aggressive tariff threats. In this volatile environment, the UK is choosing to insulate itself by building domestic champions. For Kenyan investors and policymakers watching from Nairobi, the lesson is stark: in a fragmented world, relying solely on foreign direct investment isn't enough. sometimes, the state must put its money where its mouth is.

"We must expedite their growth," Kyle urged. It is a rallying cry that suggests the UK is done playing nice. They are playing to win, and they are using the public purse to rig the odds in their favor.