The UK’s autumn budget, unveiled by Chancellor of the Exchequer Rachel Reeves, raises a number of talking points as to how it will impact tech; with optimism being matched by fears that it fails to address key areas of growth for the industry.
What were the highlights?
The key takeaway from the Chancellor’s statement was a renewed commitment to growth across the tech industry. This broad commitment includes:
- a £520 million investment for a new Life Sciences Innovative Manufacturing Fund,
- record funding for research and development across the board (reaching £20.4 billion by 2025-26) including in the automotive, aerospace, life sciences, energy and creative industries; and
- an investment of more than £500 million to drive the rollout of high speed digital infrastructure to rural areas.
Innovation continues to be one of the government’s key pillars for growth, with funding specifically aimed at supporting R&D, scientific breakthroughs and the adoption of technologies, including AI. The continued implementation of tech throughout the public sector will be vital for bringing key services like the NHS into the modern age.
Additionally, a £300 million commitment was made to a new digital skills programme in England, aimed at closing the digital skills gap.
Cause for concern?
Whilst the government announced plans to publish an Artificial Intelligence Opportunities Action Plan (a roadmap to drive growth and deliver better outcomes for people across the UK using AI), there was no specific commitment to invest in emerging technologies. This is out of step with other nations such as the US, China, and Japan, each of whom have recently committed to substantial investments in AI infrastructure.
Perhaps the most glaring omission from the budget, however, was cybersecurity. Prior to the budget being announced, there were hopes that the Chancellor would announce new investment in national cybersecurity defences, as well as possible tax benefits for tech companies adopting cybersecurity measures. However, cybersecurity was not mentioned once in the 77-minute long announcement and only received limited reference in the wider document, which is a concern as the number of cybersecurity attacks continues to rise.
The UK government’s recent decision to designate data centres as Critical National Infrastructure showed a commitment to cybersecurity, but it would have been helpful to see economic incentives to support further investment. The UK is home to more than 25% of Europe’s data centre capacity which are the engines of modern life, powering the digital economy. This is an area of real growth, with the data centre market growing nearly 20% in the last year.
A matter of perspective?
It is also important to note that, regardless of the budget, the UK tech sector continues to outgrow the wider economy each year, having now reached a market valuation of over $1.1 trillion, establishing itself as the leading tech ecosystem in Europe.
The UK remains at the forefront of a diverse range of sectors within the industry, pushing the boundaries of what can be done with tech. Looking forward, there can be a lot of hope and optimism, with ever increasing numbers of new startups being accompanied by the wider adoption of existing technologies, helping to keep the UK at the forefront of digital innovation.
