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Chancellor’s Vision Of Tech As The Future Of UK Economy Is Less Believable After Brexit

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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ANALYSIS: Government outlines ambition to make technology the poster child for Britain’s economy after EU exit, but Brexit and unanswered questions remain

Chancellor Phillip Hammond has declared the technology industry to be the “future of the British economy” and said he wants rapidly growing areas like the Internet of Things (IoT) and artificial intelligence (AI) to be areas the UK can take the lead.

In essence he believes technology can ‘futureproof’ the British economy after the country leaves the European Union. But in truth, his vague vision of a technological utopia on these shores would have been much more believable had Brexit not been on the horizon.

Speaking at Microsoft Future Decoded in London, Hammond promised to nurture conditions for investment and development, including a £1.9 billion programme to improve cybersecurity announced at the same event.

UK tech strategy

phillip-hammond-chancellor-cybersecurityHe evoked images of Britain’s technological heritage and its pioneering role in the industrial revolution, as well as more modern achievements in computing and the recent sale of ARM. And he painted a pretty picture about the future.

“The meetings I’ve had [since becoming Chancellor] have shown the UK is well placed,” he said. “We have more tech unicorns that anyone in Europe, we have the largest data centre in Europe and we are the leader in e-commerce. We do more online shopping than any other nation.

“The question is how do we get in front and stay there? I believe there is a once in generation chance to take the lead in innovation and futureproof the economy of post-Brexit economy.”

Hammond seems to believe the biggest obstacles are addressing any skills gap through education, converting sceptics, and acknowledging the short-term implications that automation and technology might have on jobs.

“As old jobs disappear, previously unheard of ones appear,” he said. “But being optimistic about technological change is not simply a matter of being grateful about technology making our lives easier, it’s about doing all we can to foster innovation because tech has the power to make everyone in society better off.”

Post-Brexit

But the economic conditions that Hammond perceives the UK has or is able to create would all appear to be challenged by Brexit. Sure, our legal system, time zone and our use of the English language are unlikely to be threatened once Prime Minister Theresa May pulls the trigger on Article 50, but others are.

Our “business friendly” climate is currently threatened by trade tariffs, uncertainty and a plunging currency (although this could attract some investors), our academic institutions are facing up to the prospect of decreased numbers of foreign students, and our skilled workforce could be made inferior by anything that stops UK-based tech firms from attracting the best talent.

Even still, it appears unclear what the government wants to achieve. When Hammond became Chancellor he praised the takeover of ARM by Japanese giant Softbank as a sign post-Brexit Britain would still be open for business, but others lamented the fact the UK had once again failed to create anything approaching a Google, a Facebook or a Microsoft.

Is the UK’s technology industry set to remain a creator of businesses that can then be swallowed up by large foreign entities? Softbank has pledged to increase the workforce at ARM, but not all suitors will be as keen and job cuts could happen.

“We know we must fight for Britain’s share of the exciting tech opportunities ahead,” said Hammond.

The UK tech industry no doubt support the government’s words of encouragement, but given so many tech firms believed Brexit would be bad for business, it seems the fight would have been easier had the EU Referendum gone the other way in June. 

London remains the UK’s and arguably Europe’s tech capital that could drive Hammond’s vision of growth. But what do you know about London’s relationship with technology?