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Budget 2017: Government Targets AI, 5G & Driverless Car Leadership

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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Chancellor Philip Hammond wants UK to be at the forefront of future tech, but is his budget enough?

Chancellor Philip Hammond has once again put technology at the centre of his plans for a post-Brexit Britain, promising to invest £500 million in new and previously committed funds in areas such as artificial intelligence (AI), 5G and driverless cars.

“For the first time in decades Britain is genuinely at the forefront of this technological revolution,” he told Parliament, adding that this innovation would emerge not just at universities and research institutes, but in the commercial sector.

“A new tech business is founded in Britain every hour. And I want that to be every half hour.”

Parliament Government London © anshar Shutterstock 2012

Budget 2017

The Treasury claims growth in the tech sector will benefit the wider economy, create more jobs and increase salaries.

To this end, it plans to “unlock” £20 billion of investment for startups and launch a new fund at the British Business Bank, funded by £2.5 billion from the public purse. Additionally, the Chancellor has promised to replace European Investment Fund cash if necessary.

The government has committed to spending £160 million in 5G research, the first £15 million of which will be used to test networks and a driverless car trial in 2018. Hammond reiterated the government’s calls for a ‘full fibre’ Britain but no new promises were made.

A new Centre for Data Ethics and Innovation will work with government, regulators and industry to lay the foundations for AI, while there will be research funding too.

However the Chancellor said technical education will be essential to realising the full benefits.

There are plans to increase the number of trained computer science teachers to 12,000, a new National Centre for Computing and a National Training Scheme to help people of all ages attain new digital skills.

“To make a start immediately, we will invest £30 million in the development of digital skills distance learning courses, so people can learn wherever they are, and whenever they want,” said Hammond.

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Industry Reaction

The tech industry has cautiously welcomed the Chancellor’s package there are concerns that there isn’t enough funding and that the spectre of Brexit still hasn’t been eliminated.

“This is definitely a fitness-boosting tech Budget but many will question if it’s enough to prepare the UK for the long uphill road ahead,” said, techUK Deputy CEO, Antony Walker. “While the Chancellor has identified the right priorities, the overall economic forecast and tight spending constraints means that the amount of funding available is small relative to the growth potential of the sector.

“The reality for many UK tech businesses is that the Budget measures announced today will not make up for the uncertainty created by Brexit.  To really be ‘fit for the future’, tech businesses need to know what that future holds.

“Putting money aside for a hard Brexit is pragmatic, but does not deflect from the urgent need for progress in the Brexit negotiations, including securing a transition deal on which businesses can make future investment decisions.  This may not be in the Chancellor’s hands, but will determine whether the UK thrives or falters in the global, tech-led future, on the horizon.”

Others were concerned the government would ignore ‘traditional’ technology in favour of the latest, headline-grabbing innovation.

“Commitments to emerging technology such as 5G, AI and data science is to be applauded, but it is important that core technology businesses are not forgotten in the chase for the next shiny toy,” added Tudor Aw, head of UK tech sector at KPMG.

“In particular, the UK has strengths in ‘old-school’ tech sub-sectors such as software, IT services and semi-conductor technology.  Tech investment should therefore be made in education, regulation, tax and other incentives to ensure our strength in the tech sector is broad based and not just those areas that sit at the top of the latest hype curve.”

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