Usually, nicknames are what other people give us. In his latest budget, unveiled on October 29th 2018, the chancellor referred to himself as Fiscal Phil. But if he really wants to go down in history he should instead seek to be known as AI Phil, or even IoT Phil, Crypto Phil or if you want a more snappy title: Techy Phil.
On the occasion of his latest opportunity to bask in the limelight, Techy Phil unveiled the promise of a tech Budget.
Among the tech budget related plans:
• A Cryptoassets Taskforce – having the task of setting out the UK’s approach to cryptoassets and distributed ledger technologies in financial services, including actions that will allow innovators to thrive and the benefits of these new technologies to be realised while at the same time mitigating the risks that arise from cryptoassets.
• A new £50 million per year fund designed to address the most pressing challenges in areas such as public health and cyber security.
• Up to £78 million for the Stephenson Challenge, supporting innovation in electric motor technology.
• A further £235 million to support the development and commercialisation of quantum technologies, including up to £70 million from the Industrial Strategy Challenge Fund, and £35 million to support a new national quantum computing centre. This takes overall funding for the second phase of the UK’s National Quantum Technology Programme to £315 million.
• Nuclear fusion – £20 million in 2019-20 for the UK Atomic Energy Agency to accelerate…the development and commercialisation of fusion technologies.
• The Office for AI and Government Digital Service (GDS) will review how government can use AI, automation and data in new ways to drive public sector productivity and wider economic benefits.
• The Data Science Campus at the ONS and the GDS will conduct an audit of data science capability across the public sector, to make sure the UK public sector can realise the maximum benefits from data.
• The Centre for Data Ethics and Innovation has been commissioned to study the use of data in shaping people’s online experiences, and the potential for bias in decisions made using algorithms.
• The government will invest up to £50 million in new Turing AI Fellowships to bring the best global researchers in AI to the UK, and £100 million in an international fellowship scheme.
• Catapults to support entrepreneurs and businesses to access and adopt cutting-edge technologies, the government is confirming £115 million to extend funding for the Digital Catapult, which has centres in the North East, South East and Northern Ireland, and the Medicines Discovery Catapult in Cheshire. This builds on the £1 billion in long-term funding already committed to the broader network of Catapult centres located across the UK.
• The Budget Red Book said: “Distributed ledger technologies (DLT), such as blockchain, could revolutionise how information is recorded, protected, stored and shared, transforming financial markets, supply chains and public services. To test their potential, the Digital Catapult will run a series of DLT Field Labs, working with businesses, investors, and regulators in a range of areas, including in construction and the management of goods in ports.”
• A new £50 million per year fund designed to address the most pressing challenges in areas such as public health and cyber security. The fund will focus on joint programmes between government and industry, and will begin in 2021-22.
• The Intellectual Property Office will support more companies to use their intellectual property to access finance, piloting a new offer to help businesses secure high-quality valuations, and will work with banks to improve their awareness of the opportunities and true credit risk associated with such lending.
But is all this really such a big deal?
A recent report from PwC forecast that AI could lift European GDP by 9.9%. between now and 2030. But China is expected to see a 26.1% lift. The UK needs to aspire to do better than merely seeing a 10% jump in GDP over ten years or so thanks to AI.
AI disruption could leave Europe looking like has-beens
According to a report from Big Innovation Centre and Deep Knowledge Analytics, the UK is on its way to third place in the global rankings for the AI industry.
Is this the Cambrian Explosion of AI in the UK?
The report is not the first to suggest that the UK could find a niche in ethical AI.
After-all, as KPMG says, UK universities are among the best in the world in advancing AI.
But did Techy Phil really unveil a tech Budget?
There were plenty of critics.Among them, Exasol, which has produced research showing that “the UK Government’s Industrial strategy of putting AI and data at the heart of the UK economy has thus far fallen short of our European counterparts. The findings show that:
• Germany’s businesses are 40% more focussed on building AI and Machine Learning into their strategies than UK business.
• Business boardrooms in Germany are twice as likely to understand the value data brings their organisations.
• German businesses are streets ahead in their data strategies, with 87% more businesses in Germany being truly data driven versus the UK.
So, if the UK wants to win the race to third place in the AI stakes, it needs to look at Germany.
But then we get into a thorny area of taxing the giant techs, something that Techy Phil seemed keen to do in the tech Budget.
But techUK CEO, Julian David, was not impressed.
He said: “Proposals for a Digital Services Tax cut across the grain of that positive narrative. techUK remains opposed to any tax that seeks to narrowly target businesses simply because they are digital. The kind of tax being proposed will be bad for investment and bad for the UK economy.
“We welcome the Chancellor’s recognition of the benefits of an international approach but the OECD and the EU Expert Group on tax have said that a national digital services tax is the wrong idea. This is an international tax issue that needs an internationally agreed solution. Work at OECD level is progressing. The UK should show commitment to that process and not encourage others to look to unilateral action.
“The proposal to introduce a tax in April 2020 risks cutting across the OECD’s timescale which aims to reach consensus by 2020. It would be bizarre if the UK were to implement a new tax just as real and substantive international action is being reached.
“This approach risks undermining the UK’s reputation as the best place to start a tech business or to invest. The £500 million threshold the Chancellor proposed is low and risks capturing much smaller companies than anticipated. techUK will engage with the Chancellor’s consultation but it is vital that policy is developed based on the reality of how businesses work, not on theoretical models of how they operate.”