One of the biggest themes of Hammond’s first Spring Budget surrounded boosting productivity. Technology should be at the heart of this.
However, the sums of investment proposed for 5G, full-fibre broadband and disruptive technologies were underwhelming. Indeed, the US Department of Transportation proposed a 10-year plan to invest $4 billion (£3.3 billion) in self-driving cars under President Obama.
Does this represent a missed opportunity to firmly put technology at the heart of Britain’s future success?
In terms of addressing the digital skills gap, this is not the case. It was a major focus highlighted by Hammond in his first Spring Budget.
During his speech at the House of Parliament this afternoon, he stressed that improving the quality of education and technical skills delivers more fairness and boosts productivity.
While championing the success the government has brought to the school system – through continued investment in free schools and record school attendance levels – he did acknowledge that technical education lacks significantly.
Internationally, the UK is near the bottom of the list when it comes to technical talent and is not competing with other global powers. Part of this budget seeks to reverse this.
He announced today that students who decide to engage in ‘technical education’ from 16-19 will be offered maintenance loans for the first time, under a new £500 million-a-year plan to steady the UK and equip future British workers for the realities of a technology-centric Britain.
On top of the maintenance grants, Hammond announced that the amount of training on those courses teaching technical skills will be increased by over 50%. This represents an increase to more than 900 hours a year.
As part of this surge in experienced training, students will be required to complete high-quality, three month industry work placements, which are designed in keeping with what hiring businesses are looking for.
To this end, Hammond will scrap the current route to work system and replace it with 15 “world-class” routes, tailored to business requirements.
He also announced funds of up to £300 million for 1000 new PhD and fellowship positions in science, technology, engineering and mathematics (STEM) subjects.
This is certainly a positive to take away from the Budget. It shows that the government is aware of the huge role digital skills will play in the future success of the UK.
Christian Lane, the CEO and co-founder of Smarter, was not convinced, however. He that said that “the Spring Budget has proven to be disappointingly short on detail and fails to address the very real issue of digital skill shortages in the UK tech industry. While it has touched on introducing coding at Key Stage One, we need to be looking at introducing basic digital skills for everyone, managing and running fast-moving businesses. There needs to be more support for workers needing to up-skill or retrain as more and more jobs become automated.”
However, Hammond did address this, with his announcement regarding lifelong training.
The world is changing and disruptive technologies will begin to replace some jobs in the near future. As a result, retraining those in current employment should be just as important as boosting the technical education of those in school.
The Chancellor seemingly agreed and said the Department for Education will invest £40 million in pilot schemes to find the best approach in re-skilling a generation of workers.
5G and full-fibre
As part of the Spring Budget, Hammond committed £16m to build a new 5G mobile hub at research institutions and £200m to support local “full-fibre” broadband network projects that are designed to bring in further private sector investment.
Connectivity is absolutely essential to the digital transformation of the workplace, and society. The move to invest in improving these capabilities – 5G and full-fibre broadband – have been championed.
Dr Li-Ke Huang, 5G research and technology at Cobham Wireless, for example, said: “The government’s plans to invest in 5G technology are vital in order for the UK to retain its position as a digital leader in Europe. It promises to deliver the quality of mobile internet experience that businesses and consumers are demanding, and will also open up opportunities for a truly connected society, powered by new applications such as machine-to-machine technology, connected cars and smart cities.”
>See also: 5G will be transformative for the UK
However, other technology experts are dramatically underwhelmed. Lee Wade, CEO of cloud and network provider Exponential-e has made the comment that the £200 million investment is “a very low amount to be pledging towards something so vital”.
“Compare the £200 million pledged to the £55 billion on HS2, and think about how much of a difference a similar investment could make to our digital infrastructure,” he said.
Hammond also committed £270 million to put the UK “at the forefront” of disruptive technologies including robotics, biotech and driverless vehicle systems.
This is a welcome investment, but again falls short of what is needed. Academic, Professor Noel Sharkey, a robotics expert at the University of Sheffield shared this concern and suggested the funds were insufficient in light of competition for talent from tech companies.
“We lost our best machine learning group to Amazon just recently,” commented Sharkey.
“The money means there will be more resources for universities, which may help them retain their staff.”
“But it’s not nearly enough. The government says it wants this to be the leading robotics country in the world, but Google and others are spending far more, so it’s ultimately chicken feed.”
The investment does show, however, that disruptive technologies are firmly on the government’s agenda – they recognise its importance moving forward.
Richard Agnew, VP NW EMA at Veeam agreed, and argued the “even talking about futuristic technologies such as robotics and artificial intelligence demonstrates the government’s recognition of the inherent value of the digital economy. All that is needed now is the alignment of systems, training of skilled personnel, and processes to cement the UK’s position at the forefront of technology-led innovation across the world.” No small order.
Ultimately, everything the Chancellor announced in the Spring Budget represents a move in the right direction.
What he has elected to invest in is vital for driving the UK forward. 5G and full-fibre are crucial to enhancing workplace operations and improving citizen interactions with public services. While, the investment in disruptive technologies – like robotics and AI – will be vital to increasing productivity.
However, does a dark cloud of missed opportunity loom over the budget for the tech sector?
Vinay Joosery, CEO of Severalnines has said that amount committed in the budget, does not represent a “substantial amount for tech investment to allow a country to lead its peers in R&D. This number is even more concerning when you consider Brexit. The sudden lack of access to talent and European infrastructure will stagnate the process of UK innovation even further.”
“Sweden spends 3.1% of its GDP on R&D, compared to the UK’s 0.6%, and the government also incentivises starting your own business with ‘market validation’ programs and incubators. Hammond’s offer of £500m is a good start for the UK but a lot still needs to be spent for the country to carry on innovating after Brexit is implemented to keep pace with its European neighbours.”
What can be deemed a great success for the technology industry, is the impetus Hammond’s budget placed on digital skills and bridging this gap. Not only for those yet to make a decision on their future role, but on those who will need to adapt their current role.
More investment will, inevitably, be needed. It is evident, however, that Hammond recognises addressing the skills shortage will be vital for boosting the productivity of the UK economy.
For the tech sector, Hammond’s commitment to technical education will be seen as a victory, as it was at the heart of the Spring Budget 2017.