As Instagram leaves Britain and heads home, what will replace it?

Cheerio then, Instagram. Will someone take a pic of the empty offices when they’ve been cleared out?

Less than eight months after the social media platform’s boss Adam Mosseri landed on these shores, he’s heading back across the Atlantic. And he’s taking his staff with him. (Those that survive the cull, that is.)

Parent firm Meta is in the throes of a retrenchment, cutting 20,000 jobs and closing offices around the world. Shares have actually found some momentum of late, with its biggest rival, the Chinese-owned TikTok, grappling with increasing political and regulatory heat. Twitter is grappling with Elon Musk. So, with an improving outlook for ads, things are looking up for Mark Zuckerberg’s baby.

Cost-cutting always goes down well on Wall Street, which is eagerly anticipating Meta’s forthcoming results, and Instagram, with its younger user base, is an important part of its armoury. Small wonder that Zuck wants back in California where he can more easily keep his eyes on it.

Politicians love it when mega-corps plant their flags on these shores. It’s foreign direct investment and in this case it doesn’t involve private equity firms gobbling up UK companies then gutting them.

But while companies are welcome, they are easily lost. When businesses decide to cut costs and retrench, they tend to pull back into their home markets where the headquarters are located and the stocks are listed. The axe cuts deepest overseas when it’s swinging. Which is why it would be handy if Britain was able to produce a few more companies like this one. (Well, maybe not quite like this one. But you get my drift.)

Britain’s larger companies tend to have their roots decades in the past, some dating back to the 19th century. HSBC, for example.

Do we necessarily need modern mega-cap giants such as Meta? They can be a double-edged sword. Germany has done just fine with its legion of mid-sized family-owned Mittelstand. However, a little more dynamism, one or two more interesting companies that would see Britain as the place to return when things got tight, wouldn’t hurt.

However, the City isn’t currently set up to help with that. London has become a formidable tech hub but problems start to emerge when companies get to a certain size and start looking at the public markets as a means of raising capital; then, another kind of gravity pulls them to the US.

Part of the problem is that big investors such as pension funds have turned off investing in the London Stock Exchange, which has a diminished pool of capital as a result. The institutions that are still involved also seem much more interested in regular dividends and safe, boring bets than they are in growth companies. Small wonder that exciting techs and biotechs head for New York where there is a strong appetite for them among a sizeable investor base and plenty of other support.

There has been talk of forcing pension funds to use their cash to invest more widely to help the UK economy, rather than sitting on bonds and what have you. That isn’t going to help. Making it easier for them, and other investors, to choose to do that would be better. Ditto easing the process of listing. Some creative thinking might be in order. Do we still have that?

True, reforms have been set in train but the pace is slow. The UK government needs to move much faster. But also smarter. Too much potential is passing it by, potential the UK needs to capitalise on.