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March 7, 2023updated 29 Jun 2023 10:34am

UK tech industry figures sceptical about impact of new Science and Technology Framework

The framework aims to boost UK tech, but industry insiders are sceptical about what it will achieve.

By Sophia Waterfield

UK tech industry stakeholders are divided on the Science and Technology Framework launched by Prime Minister Rishi Sunak and technology secretary Michelle Donelan on Monday. Experts told Tech Monitor that the £370m plan doesn’t go far enough in ensuring the nation remains at the forefront of innovation, with some saying previous failings on tech have hit their confidence that the government can deliver on its ambitions.

UK prime minister Rishi Sunak launched the Science and Technology Framework but the tech industry has mixed responses. (Photo by Number10Gov on Flickr)

Launched from the newly created Department for Science, Innovation and Technology (DSIT), the framework will focus on several actions. These include boosting private and public investment in research and development, building on the current skills base and financing tech start-ups. 

Delivery of the framework will begin with new projects worth around £500m in new and existing funding – £117m was previously announced to create hundreds of PhDs for artificial intelligence (AI) researchers. Five transformational technologies – AI, quantum technologies, semiconductors, future telecoms and engineering biology – are on DSIT’s radar to solve challenges in areas such as climate change and healthcare. 

The plan was designed in consultation with what the government describes as “industry experts and academics”.

UK Science and Technology Framework: a ‘step in the right direction’ that doesn’t go far enough

Executives at UK tech vendors told Tech Monitor that while they welcome the government’s framework, it falls below expectations when it comes to addressing some of the main issues facing the sector. 

Tim Warrington, CEO at ServiceRobot, points out that the UK already has some of the “best tech universities in the world”. But there’s nothing there to incentivise start-up founders or tech workers to stay in the country, he says.

“It is not enough and does not address the main issue in the UK with the commercial aspect of setting up a business and tax grabs which the governments are insistent on going through with,” Warrington says. Recent changes to tax rules have seen the government reduce the level of R&D tax credits, while upcoming IR35 reforms will put a greater burden on employers.

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“The UK has no incentives to set up a business here as we have some of the highest taxation in Europe and working visa red tape,” Warrington says. “We are in effect racing to the bottom; all this does is drive companies away.” 

Corporate income tax rates sit at 19% in the UK. However, they are due to increase to 25% on 1 April. The average across Europe is 19.74%, according to Tax Foundation. 

“The UK needs incentives to retain talent and bolster entrepreneurship not cut them off before they begin,” says Warrington. “Tax incentives for the risk of staying in the UK and the ultimate risk of setting up a company here should be addressed above and beyond the framework.”

The UK has already proven it isn’t a ‘technology expert’ 

The mistakes from the Covid-19 pandemic still foreshadow anything the government does with technology, one CTO told Tech Monitor. 

Mark Benson of Logicalis UKI, says that while the UK has a “long history of innovation”, the government must look to external sources for advice and guidance. 

“The government is not a technology expert, showcased by several failed national initiatives such as Test and Trace,” he explains. “To ensure this renewed focus results in action, ministers must recognise the need for external advice and guidance from those within the tech sector.”

Benson also says that DSIT needs to consider how it plans to help younger generations gain the skills for the future workforce: “As a parent, I see a clear need to modernise the education system to embrace technology and its role in children,” he argues.

“Much of the content my children are learning needs to be updated and relevant to my experiences in the tech industry. With most UK industries experiencing a science and technology skills shortage, reforming our education system now is critical. If the government included this in their plans, the UK would truly be moving in the right direction.”

Matt Littler, founder and CEO of ARK Immersive, also thinks the UK government is moving too quickly when it comes to emerging technologies such as quantum and AI. 

“Any investment in innovation is good, but the talk of investment into quantum and AI is trying to run before we can walk,” he told Tech Monitor.  

“There are much more tangible technologies, such as 5G, that need investment, which are already running, and will enable these far-future technologies to be used effectively by the consumer when they arrive.”

Funding is a ‘drop in the ocean’

Industry experts are also underwhelmed by the amount of investment the government has put behind the Science and Technology Framework, which stands at £370m in new funding, bumped up to £500m when projects previously announced are taken into account.

In addition to the PhD funding for AI researchers (£117m) and the £250m for emerging technologies, up to £50m is put aside for co-investment from the private sector and philanthropists and another £50m to uplift to help research institutions improve facilities in the UK. 

The government has allocated £10m to the UK Innovation and Science Seed Fund to boost the UK’s “next tech ad science start-ups” which they say could be the next Big Tech company like Apple, Google or Tesla. Quantum computing research by PsiQuantum, located in the North West, is also receiving £9m. 

Ben Clark, director of an on-campus start-up accelerator at the University of Southampton, Future Worlds, believes that it’s great that the government has taken further steps for the tech sector, but that the funding is a “drop in the ocean”. 

“Everyone knows that in this context, £370m is a drop in the ocean, so we need to ensure it’s part of a much bigger push,” he told Tech Monitor. “One elephant in the room is European Horizon funding – will the Government ensure we remain associated with it to gain access to the funding, and if not, then what is their alternative?”

As part of the announcement, Sunak did confirm a further extension for the UK Horizon Europe fund until 30 June 2023 to support research and development in science and technology. But in an interview with BBC Radio Four’s World at One, Donelan said the UK’s continuing participation in the key science funding scheme would be dependent on the UK being offered favourable terms.

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