Skip to main content

Hammond’s budget: Britain to be the home of tech unicorns

(Image credit: Image source: Shutterstock/violetkaipa)

The world is on the brink of a technological revolution.

A hub of enterprise and innovation, a beacon of creativity… That is the Britain I want to leave my children...

We have some of the world’s best companies and a commanding position in a raft of tech and digital industries that will form the backbone of the global economy of the future.

Bold statements from the Treasurer: statements that very much set the tone for a tech-centric Budget.

Mr Hammond made it clear in the build up to the Budget announcement that AI, driverless cars and 5G were going to be at the fore. He delivered on that promise and also provided a lot more for those in tech to get excited about.

New technologies and innovation 

Let’s focus on the interesting stuff first, R&D tax credits and EIS can be covered by accountants!

1.         Driverless cars are coming. It is no longer a matter of if but a matter of how and when. Early adopters will be in the driving seat (pun intended) when it comes to tapping into the enormous revenue streams that will be available. Mr Hammond appears to be well aware. He quoted predictions for the UK driverless car industry being worth £28 billion to the UK economy with the potential to employ 27,000 people. On the back of these figures he announced that the government wants to create “world-leading changes to the regulatory framework” to get fully self-driving cars on UK roads by 2021.

2.         Alongside the fast-paced driverless car revolution, is the slower electric car revolution. The Plug-In Car Grant will continue but also a £400 million Charging Investment Infrastructure Fund is to be created to speed up the rollout of a wider ranging charging infrastructure, and the government is to commit to the electrification of 25 per cent of its central government fleets by 2022.

3.         Turning to 5G networks, the government believes the UK has an opportunity to become a world leader. The government intends to put a further £160 million in new 5G infrastructure; this will include a project to create facilities where the security of 5G networks can be tested and initial trials to test 5G applications and deployment on roads.

4.         Ordnance Survey (OS) has always been a hugely impressive UK resource that has never been utilised to the fullest extent. This has now been recognised and, “to maximise the growth of the digital economy and consolidate the UK’s position as the best place to start and grow a digital business” the government intends to establish a new ‘Geospatial Commission’. Working with the newly formed Commission, and OS, the intention is to open up freely the OS MasterMap data to allow businesses to make the most of it.

5.         Tech Cities are to grow into Tech Nation. With a focus on AI and FinTech, the government intends to roll out a dedicated sector programme with hubs located across the UK. This will be supported by a £21 million investment aimed at helping regional tech companies and start-ups reach their potential.

6.         Even the UK’s video game sector got a look in, with the government to provide a further £1 million to extend the UK Games Fund until 2020.

The tech workforce

While there was surprisingly no mention of the gig economy in Mr Hammond’s speech there was recognition of the so called ‘Fourth Industrial Revolution’. A number of measures were announced to ensure the nation’s workforce has the skills to keep pace with tech:

1.    Mr Hammond announced a new partnership between employers, unions and the government called ‘the National Retraining Scheme’ to help people adapt to the changing world of work.

2.    He announced major investment in the training of more computer science GCSE teachers.

3.    The setting up of a new National Centre for Computing to produce materials and support schools.

4.    The creation of AI fellowships and an initial fund for 450 PhD researchers to secure the UK’s position as leaders in the global AI market. This will go some way to providing relief to those in research that Brexit doesn’t mean the end of academic funding in the UK.

5.    And to make sure we keep attracting talented international workers, the government intends to change immigration rules to allow top scientists and researchers covered under the Tier 1 (Exceptional Talent) route to apply for settlement.

But is this all talk?

Two key areas where this question can validly be asked: in relation to the rollout of local full fibre networks; and rail passenger communications.

Hammond talked about a new Challenge Fund to encourage faster rollout of full-fibre networks but, as someone suffering in my own home, roll out of even part-fibre and hybrid-fibre has been fraught with delays and poor execution. The government can’t just pass responsibility to private companies to get this done without making sure that they monitor its progress fully and make sure it gets done. It is all well and good saying that they support the very best internet for the people of this country when many of us are still waiting for the second best to arrive!

Similarly, there was a lot to be said about improving internet and mobile communications for rail passengers and a lot of money is to be thrown at it. While this is a great idea in principle, government money may be better spent getting trains away from their stations. While I’m sure many South Coast rail passengers will enjoy accessing Netflix faster, when sat at Portsmouth station, they’d enjoy it more if the train was moving!

There is also the issue of flexibility and speed. Autonomous cars on the road by 2021, great, but do our laws allow it? At the moment, it’s difficult to see how they do. There is a glimmer of hope in this respect. Hammond made clear that he wants to look at the greater issues beyond just the investment and development of tech. The hard print states the desire for Britain to be “leading the world in developing standards and ethics for the use of data and AI, and creating the most advanced regulatory framework for driverless cars in the world”.

What we need to make this work

In short, a flexible and responsive legal and regulatory environment.

Grand statements and bold visions are one thing but putting pen to paper and producing results are another. Tech is very fickle. The next “big thing” can suddenly fade away and just when you think you have a grip on the latest advance, it has advanced even further.

For Britain to be recognised globally as being at the forefront of digital and tech innovation, we need to make sure that the legal and regulatory framework is adaptable and flexible. We need to make sure that there is space for innovation without crushing regulation and new ideas are supported and rewarded rather than feared and punished.

Issues around insurance also need to be addressed. Brexit cannot be used as an excuse for not changing British law, such as those relating to motoring, and we need to focus on not just those tech and digital items that are too big to ignore but also those that no-one really wants to address, think blockchain and cryptocurrencies. 

Britain can definitely be home to future $1 billion tech businesses, the so-called unicorns, but it is not as simple as the government expressing a desire to be known for it. It needs to be made a priority and where there are sticking points and hurdles, the government has to drive the country forward and overcome them. Being at the forefront will allow the UK to prosper for years to come; after all, tech has always been around and always will be… Jethro Tull’s seed drill was once at the cutting edge of it.

James Kitching, Solicitor, Coffin Mew (opens in new tab)
Image source: Shutterstock/violetkaipa

James Kitching is a Solicitor in the Corporate team at Coffin Mew and also sits on the firm’s technology team.