The UK and devolved governments are determined to see technology drive Britain’s post-Brexit future. TERRY MURDEN assesses what is being proposed
Tax breaks, investment incentives and a new regulatory regime will help drive a tech-led recovery in post-Brexit Britain. That’s the message from UK government ministers who have been putting together a picture of how Britain will develop outside the EU. Cabinet minister for digital Oliver Dowden has described how the government will “shape a new golden age for tech in the UK”, backed by a range of new programmes such as a National Artificial Intelligence Strategy to be published later this year.
Chancellor Rishi Sunak’s Budget featured a range of short-term tax incentives to companies that invest in IT equipment, helping startups list on the London Stock Exchange and encouraging pension fund investors to invest in innovation.
The focus on a tech-led recovery has been welcomed by the industry which has variously promoted Britain as a world leader in developing ideas while warning that others could surge ahead without continued support from government. There is a call for a more focused ministerial role at the heart of decision-making, backed by a long term plan.
The industry says that there needs to be cuts to red tape, particularly greater clarity in the regulatory regime and a determined investment in skills. The Chancellor wants to fast-track visas for fintech companies to help recruitment of top talent from around the world. It mirrors a similar policy for scientists.
Support for startups and scale-ups includes greater encouragement to raise capital on public markets, a move that will not only fuel the next generation of companies but will help underpin the London Stock Exchange’s role in financing tech and life science companies at a time of growing competition in international capital market
One area being pursued is relaxing rules around special purpose acquisition companies, or SPACs which analysts support as a means of levelling the playing field between London and other European markets which are currently leading the race to be the market of choice for these vehicles.
Europe as a whole has largely missed out on the SPAC phenomenon, which sees shell companies raise funds in the public markets to acquire an existing privately held firm. The listing method gained significant traction on Wall Street last year and is tempting tech businesses looking to bypass the traditional initial public offering process.
Mr Sunak has introduced other measures aimed mainly at early stage firms, but also those that would benefit from adopting more technology into their processes. Through schemes such as Help to Grow, new programmes offered by business schools, and the “super-deduction,” – a tax break for companies investing in IT equipment – the government hopes that more SMEs will digitise their operations.
There are proposals for 10 fintech clusters around the UK to act as hubs for innovation, including the corridor between Edinburgh and Glasgow, and Wales. They could receive funds from local enterprise partnerships that link businesses with local authorities
Former Downing Street adviser Dominic Cummings promoted the Advanced Research and Invention Agency (ARIA) — a UK version of the United States’s DARPA which will fund high-risk, high-reward research. He may be gone, but the initiative is still alive.
Scotland has adopted its own digital strategy, fuelled by the Logan Report which proposed a network of “Tech Scalers” to act as local catalysts for the development and application of technology.
An updated strategy, ‘A Changing Nation: How Scotland Will Thrive In A Digital World’, was developed by the Scottish Government and COSLA in consultation with business and the third sector.
It also highlights a shared commitment to deliver digital public services that are accessible to all and simple to use.
A consultation on the draft strategy between September and December 2020, received more than 200 responses from across Scotland.
Innovation minister Ivan McKee said: “Digital technology is a source of incredible opportunity – to open new markets, work in new ways, tackle climate change and make links across the globe.’
Karen Meechan, interim CEO of ScotlandIS said: “Scotland has an opportunity to build one of the world’s best technology ecosystems.
“From tech scalers to embedding digital in our learning, business and social lives, Scotland can create a truly digital nation.
“The Scottish Government’s strategy recognises the opportunity, but it can only be delivered with financial backing, strong leadership and a partnership approach with Scotland’s digital sector from the outset.”
Some of this will sound hollow to those, particularly in rural areas, who still suffer from some of the basic tech problems: poor mobile signals and broadband connnectivity.
Connectivity Minister Paul Wheelhouse, admitted this week that the Scottish Government’s superfast broadband rollout will not be finished in the Highlands & Islands part of until 2026, five years later than originally planned.
Scottish Liberal Democrat rural broadband spokesperson Alan Reid said: “The previous minister for connectivity promised to fall on his sword if superfast broadband wasn’t delivered by 2021. It looks like he got out of the job just in time.
“Absolutely no one in the Highlands & Islands will be surprised that the Scottish Government’s promises have turned out to be all hot air.
“The pandemic has exposed the glaring digital divide that exists between rural and urban parts of Scotland.”
There is acknowledgement among regulators that more is needed. Ofcom says millions of homes across the country will be upgraded to faster, more reliable broadband, under new regulations that will help shape the UK’s full-fibre future.
The coronavirus pandemic has underlined the importance of a reliable internet connection. The UK’s copper telephone network – some of which was laid over 100 years ago – has helped deliver superfast broadband to 96% of homes. There have been better services in recent years, without spending more in real terms.
But as demand for data continues to accelerate, the UK’s infrastructure urgently needs an upgrade, says Ofcom. This will require significant private investment in full-fibre broadband, which is much faster and more reliable than the networks most people use today.