The government must think strategically and “pick its battles” if it wants to make the UK a global technology superpower, new research says. A focus on digital ethics and data flows, drawing on the existing strong regulatory expertise, could help Britain find its niche, the report from tech trade organisation techUK argues.
Geopolitical changes such as supply chain disruption and sanctions against China are likely to have the biggest impact on Prime Minister Rishi Sunak’s “next Silicon Valley” ambition for the UK technology sector. The problem, according to the techUK report ‘Open and Secure: Charting a path for UK tech in a world of resurgent competition’, published today is that the UK isn’t alone in that ambition.
The authors also argue that, outside of the EU, the UK is also in a weaker negotiating position. Even with the recent accession to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and a number of trade deals with Australia, New Zealand and others, the UK is relatively isolated with minimal economic influence.
The government’s own figures show that the UK tech sector employs some three million people and has a market value of about $1trn. British start-ups and scale-up have attracted £100bn in investment over the past five years. But maintaining this level of growth will be tricky in a highly competitive environment dominated by much larger global players such as the US, China and Europe.
UK tech must pick its battles
“The UK has many strengths, including being Europe’s largest tech sector, however, the size of the UK’s economy and population mean that it is unrealistic to think that it can be a leader in every emerging technology,” the report from techUK says. it recommends that the government “picks its battles” to carefully select areas where it can lead.
Outside of the EU and with no US trade deal on the cards in the near future, the report authors suggest the UK instead use its own capital to leverage partnerships with a range of international allies outside of full trade agreements. It also needs to build up government support through coherent and coordinated policy, as well as regulatory and trade support, they added.
The report highlights a few key areas the UK can focus on including taking a strategic approach to influence development of international standards in new technologies such as quantum technologies and artificial intelligence. It can also promote the regulatory strengths and pro-innovation agenda when talking to international partners, particularly on issues where the UK can change views or steer international development – such as data flows and digital ethics.
This was evident to an extent in the recent AI regulatory framework, which takes a standards-driven, pro-innovation approach to the technology. It places control over regulation in the hands of individual industry regulators rather than a top-down, legislated approach.
The report also suggests working closely with industry and international standards bodies, being ready to act as a leader on existential issues such as climate change and AI weapon systems that need international cooperation, and says Britain should use its global reputation to advance high-priority issues.
R&D investment required across tech in the UK
To achieve this superpower status the UK must also spend at least 2.4% of its GDP on R&D, get involved in Horizon Europe and create a skills strategy for priority sectors. This includes utilising the immigration system better to make it easier for companies to attract the brightest international talent.
Sabina Ciofu, associate director for International Trade at techUK, said technology companies increasingly find themselves in the middle of geopolitical tensions and under intense international competition from countries seeking a competitive edge in technology and digital services. “While it is a complex picture for companies of all sizes to navigate, tech SMEs are particularly under-equipped to deal with the impact geopolitical shifts and big power competition are having on supply chains and growth prospects,” she said.
“In the report, we are calling on the government to continue to fight the good fight for international cooperation, to double down on UK tech strengths in areas where it can lead in the global arena, but also to provide greater guidance and direction to companies faced with a more fractious and divided world. We are looking forward to working with the government to secure the future of the UK technology sector.”
This includes ensuring the country follows a strategic plan that presents a coherent policy across domestic and international levels. It includes reviewing outdated pieces of regulation that can slow down progress but updating others to ensure they reflect ethical standards.
This comes as music industry body UK Music and actors union Equity called for an update to existing copyright legislation to reflect the impact of artificial intelligence and technology on the creative industries. Suggesting a need to balance rights protection with innovation.
The techUK report says an ethical and pro-innovation regulatory landscape at home, backed up by “robust action internationally” to ensure global standards are being adhered to should be a priority for the government. “This will support other countries adopting the UK approach and avoid other digital sectors with lesser ethical standards achieving market dominance elsewhere.”