Posted on November 22, 2017 by staff

Budget reveals funding for AI, 5G and digital skills


Chancellor Philip Hammond has announced investment in artificial intelligence, electric car technology, 5G mobile networks and education and skills in his Budget – yet the tech sector is split on whether it goes far enough.

Hammond said it was imperative that Britain becomes a world leader in technology and innovation in his speech to the House of Commons.

The Budget included funding announcements of £75m for AI; £400m for electric car charge points; £160m for 5G mobile network development; £100m to boost clean car purchases; £100m to train an additional 8,000 computer science teachers and open a National Centre for Computing; and £76m to boost digital and construction skills.

Hammond also announced regulatory changes for on-road driverless car testing with a view to getting driverless cars on UK roads by 2021.

“A new tech business is founded in Britain every hour, and I want that to be every half hour,” he said.

The Budget also included a new retraining partnership with the TUC and the CBI to boost digital skills in the face of concerns over increasing automation.

Claire Jolly, head of TMT in the North West at Deloitte, said the 5G funding in particular is welcome.

“Connectivity is the foundation for modern businesses in every sector, and this clear, specific commitment to providing next-generation 5G mobile networks is exactly what the Northern Powerhouse needs in order to thrive,” she said.

“It’s highly encouraging to see the Government’s recognition that 5G, in addition to ensuring the high performance of these networks, will form the base upon which businesses can build their digital capabilities.”

Fergus Caheny, head of the technology group at fellow professional services firm Smith & Williamson, said the funding amounts are not enough.

“Any amount is welcome as it puts the issues front and centre,” he said. “However, the aim seems to be to grab headlines, rather than have a material effect.

“Looking at AI, the UK has a commercial and technical advantage over most countries: the investment levels need to reflect this to ensure and maintain our competitive advantage.

“When you consider the hundreds of millions that Google annually invests in its Deepmind AI program, the government cannot sensibly think £75m will achieve this aim.”

Jon Andrews, head of technology and investments at PwC, reflected more positively.

“It’s encouraging to see the government investing in emerging technology like artificial intelligence,” he said.

“This is a good start, but when compared to the potential AI prize, which PwC research shows could add £232bn to the UK economy by 2030, this investment will need to be scaled over time to establish the UK in a leading position.”

Lee Dentith, CEO and founder at Now HealthCare Group, said: “This is a good start and will work towards ensuring the UK stays at the forefront of technological innovation.

“AI is vital in transforming the health of our nation and so R&D investment from PHD student level onwards, will help us and other digital health businesses develop pioneering solutions to tackle health problems.

“We believe in augmentation with our AI and technology strategies to ultimately help ease the burden on the NHS and our GPs. It will be interesting to see how the AI advisory body engages with industry and how big data fits into the bigger picture.”

On the subject of digital skills, BT chief executive Gavin Patterson said: “We welcome the Chancellor’s commitment to ensuring that young people receive the investment needed to thrive in the jobs of the future.

“As a country, we need to build on our strengths as a tech leader and ensure that we don’t just cope with the challenges ahead but that we inspire, lead and shape the future.”

Jonathan Richards, CEO of small business breatheHR, said: “Today’s Budget addressed upskilling and re-training to support those at risk of losing jobs to automation by additional investment; however, it is a drop in the ocean compared the impact it will have on companies.

“Every business owner I talk to tells me the skills gap is their number one concern, especially as we prepare to leave the EU. It would have been good to see more attention given to investment into SMEs as they are such an integral part of the UK’s economy.”

Leon Ifayemi, CEO and founder of SPCE, agreed: “In a speech in which he said he wants a new tech business to launch every half an hour, rather than every 60 minutes, Hammond did not go far enough to support the current batch of small tech firms across the UK.

“There were undoubtedly positive steps forward; but dynamic tech start-ups and scale-ups should have been bolstered by more directed policies to improve access to skills, investment and collaboration in the immediate future.”

Russell Goodenough, client managing director for the transport sector at Fujitsu, addressed the plan for driverless car technology.

“We’re seeing a clear move towards increasingly connected and autonomous cars becoming the norm in just a few years’ time,” he said.

“The government’s investment in the technology is to be welcomed, and it’s up to everyone in the transport sector to come together to agree exactly how this technology will work in the UK.”