With May's local elections in the rear-view mirror we are now firmly on the road to a General Election.
The almost persistent question of when the election will be has meant the UK has had a highly political year, with politicians effectively on a permanent campaign footing.
However, while Westminster has been focused on politics, outside the bubble the speed of innovation and invention in the tech sector has gone into hyperdrive.
Headline grabbing presentations of the capabilities of new generative AI models have gone alongside quieter but just as revolutionary developments in biotechnologies, self-driving cars and green tech.
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UK economic performance has been lacklustre, and most forecasts don't expect a significant an improvement in the near future. Yet despite this a consensus is growing that in the medium term the UK is in a position to seize on the benefits of the coming global technological revolution.
UK businesses and universities are at the forefront of innovation in AI, biotech and new drugs discovery, green technologies, fintech and more. The global market in each of these sectors is predicted to explode over the next decade. This gives the UK an opportunity to secure a significant rise in economic growth and living standards.
However, UK success is not a given and there is a concerted effort from the UK's allies and strategic rivals alike to develop their own business and research capabilities in the technologies that will define the economy of the late 2020s and 2030s.
As the saying goes, if you are not at the table, then you are on the menu and the UK needs to develop a sophisticated and comprehensive economic growth strategy to enable our businesses to compete.
Such a strategy will have to be realistic, well informed and able to recognise and accept the trade offs that will be needed to make it work.
techUK has set out our view of what this could look like in our comprehensive UK Tech Plan published last June, and further built on this in our Seven Tech Priorities narrowing down on some immediate actions the next Government will have to take early on to get this strategy right.
As the election draws closer there still has not been enough detail coming forward from our political parties on what the trade-offs for achieving such an economic strategy will look like in practice.
Building on insights from our members, there are three areas we would like to hear more from our politicians as the election approaches:
- How can we deliver a highly competitive business environment?
- Could the UK build the next trillion-dollar tech company?
- Where is the right balance on regulation between growth and the securing confidence of the British people?
How can we deliver a highly competitive business environment?
The consequences of Brexit means that we need to work harder for investment that might otherwise have come to the UK as a default. Additionally, it has become clear from both the Conservative and Labour Party that the UK won't match the expansive tech subsidies that are being deployed in the US and EU.
In this context we will need to work harder and smarter to secure investment. Politicians will also need to take tough decisions, sometimes in the face of public opposition, on planning, immigration, education and skills policy as well as maintaining the UK's commitment to invest in R&D.
Already the UK is losing its competitiveness as lab costs in our major tech hubs have risen higher than in competitor countries. Access to talent remains a persistent concern with high costs for hiring from abroad and training domestic talent. And while we have seen improvements, the tech sector still is not as diverse or inclusive as it could be.
Additionally, we see costs for businesses and their employees becoming a top concern. In techUK's most recent survey bringing down energy costs and reducing the cost of living were seen as the top threats to their businesses that senior leaders in tech companies asked the next Government to address.
While the UK will continue to attract investment, to achieve the significant rise in investment and job creation in advanced tech sectors we need to accelerate economic growth. The next Government will also need to take a ruthless approach to competitiveness, ensuring that pound for pound the UK is one of the world's most competitive destinations to grow the companies of the future.
This will require confronting vested interests, as well as crafting a message and policy solutions that sells the benefits of technological innovation to the public as an opportunity for everyone.
Could the UK build the next trillion-dollar tech company?
New technological breakthroughs are likely to see some companies able to scale extremely quickly. The UK is already the unicorn champion of Europe and has shown an ability to build large, high value tech companies.
The next step however is to be able to ensure that these companies grow further, become true global champions, and retain the UK as their base of operations. This would bring significant investment with country-wide benefits. For example, Novo Nordisk, the Danish company behind a new generation of weight loss drugs single handedly lifted Denmark's GDP, helping the country avoid the short recession that befell the UK.
To do this, the UK will need to maintain a competitive environment for tech start-ups but also move to developing a process for scouting for the companies that could go on to become global champions, offer them proactive support to grow and champion their success.
The recent Harrington Review of Foreign Direct Investment criticised successive UK Governments for not developing a proactive offer for international investors. This needs to change, but not just for companies looking to invest in the UK from abroad, but also for domestic companies who started in the UK and want to scale and grow here. This is something techUK's new Scale-up group is looking at closely.
Alongside this the next Government will also need to look again at our relationship with the EU.
A pragmatic stock take and plan to reduce trade barriers to our nearest and biggest market will be needed. This does not mean re-joining the EU, but seeking to give British-based companies a bigger market to sell to while retaining regulatory independence in areas of comparative advantage. This can be done while continuing to deliver innovative new trade policies, for example tech bridges, to growing markets such as Singapore, Australia and India.
There is a huge opportunity here with techUK's survey showing 77% of tech business leaders were likely to or already had plans to expand into foreign markets. However, threading the needle on trade will be complex, difficult and require near constant engagement with exporting companies.
Where is the right balance on regulation between growth and the securing confidence of the British people?
Clear and effective regulation can be a major advantage. The UK Fin-tech sandbox and supportive regulatory environment for financial technology has been credited as part of the success of the UK's fintech sector which accounts for over 10% of the global fintech market and generates over £11bn in revenue in the UK. The fast passage of the Automated Vehicles Bill has also helped secure investment in the UK automated vehicles sector, including a $1 billion dollar investment into techUK member Wayve AI, the largest AI deal ever in Europe.
However, while the UK has seized the advantage in some areas we have lost ground in others. The slow regulatory process for lab grown and cultivated meats has been seen as a missed opportunity for UK agri-tech, making it hard for them to take part in a global market estimated to be worth half a billion dollars by 2030.
New technology will need an ambitious approach to regulation, but we will also need to secure the trust of the British public otherwise there will be a hesitancy to adopt new products.
Getting this right while maintaining the independence of UK regulators is tricky. techUK has suggested a new pro-growth framework that encourages earlier and more consistent engagement between regulators and businesses as well as a commercialisation of tech taskforce that scans for opportunities to bring new high potential technologies to market quick and safely through a rolling series of task and finish policy sprints.
While there are major opportunities here, politicians and regulators will likely have to increase their risk appetite and be ready to defend decisions and stick to the plan when things go wrong or in the face of significant resistance to change.
How can you keep up to date?
As the General Election approaches techUK's new General Election Hub will provide a location for aspiring politicians to learn more about the tech sector and share their views.
techUK members can also use the hub to keep up to date on the latest news and to share their suggestions for what the next Government should focus on when it comes to technology and securing Britain's advantage in the global technological revolution.
Make sure to check out the hub here and let the team know how you want to see this develop as we head towards election day.