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May 8, 2015

Tech reacts: 5 responses to the Conservative election victory

The views of TechUK, Intel and others on what the future should hold for the industry over the next parliament?

By Jimmy Nicholls

If there was one thing nobody predicted in this most unexpected of elections it was that the Conservatives would end the night within with a majority in the House of Commons, a result that has now been confirmed.

So what does it mean for the tech sector? Here are some reactions from the tech industry.

1. Tech should be reassured by Tory record

The tech sector in the UK has often felt malnourished compared to its counterpart in the US, lacking the investment, talent and government support that is needed to place it within the same league as the nerds of Silicon Valley.

But according to Antony Walker, deputy CEO of trade body techUK, the Conservative return to Downing Street should be cause for optimism in the sector. "The future of the UK depends on a strong, tech enabled economy and tech companies will be encouraged by signs of political certainty provided by today’s outcome," he said.

"The Conservative party has demonstrated a solid track record on tech and the digital economy across the UK. The new government must look to build on those achievements to make the UK a world leader in the next wave of the digital revolution."

2. Cyber education should remain a priority

The technology sector is enduring a perennial crisis over hiring skilled staff, with few areas are more affected as cybersecurity. Both businesses and police forces are struggling to recruit the sort of people that can defend IT systems.

"Retraining police officers to be more cyber savvy is an absolute necessity," said Raj Samani, EMEA CTO at Intel Security. "Cybercrime needs to be treated with the same level of severity as physical criminality. It’s a sinister and malicious crime that needs to be proactively pursued and addressed."

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How this education revolution would take place is unclear, but Samani believes that a framework needs to be developed. ""If we are to keep up the pace of innovation, educating the next generation of entrepreneurs is key," he added.

3. Budget squeeze in public sector IT

The past five years of austerity economics has seen public spending fall as a share of national income from 44.8% to 40.7%, according to the Institute for Fiscal Studies, with many councils and departments having to slash costs. Such a process is likely to continue in the next parliament.

"Given the Conservative pledges so far, and the past five years, we know that austerity will continue, meaning that government IT projects on the local or national scale are likely to see their budgets squeezed," said Andy Soanes, CTO at IT consultancy Bell Integration.

"For private or public sector organisations, the effects of a poorly planned or implemented project can therefore have even greater repercussions than usual. Patience with delays or extra expense will be at an absolute minimum, and IT teams could well suffer the consequences."

4. A fintech boost is urgently needed

Finance has been a technological laggard in recent years, with innovation sidelined in favour of compliance and reduced risk-taking. Yet consumer uptake of smartphone, wearable and online technology is now pressuring the sector for reform.

"Politicians are still catching up on fintech," said Philippe Gelis, chief executive of Kantox, which makes foreign exchange software. "The Conservatives were the only party to mention fintech in their manifesto, professing to ‘back the FinTech revolution’, but we are yet to see any explicit commitments or detail.

"Nonetheless, with [chancellor] George Osborne’s pre-election budget promising further policies to drive innovation in this sector – including opening up banking APIs and a proposed regulatory sandbox – we’re hopeful that conversations will at least be heading in the right direction with the introduction of a Conservative government."

5. But does it really matter?

Journalist love the drama of an election – which this one has provided in spades – but it is easy to lose sight of the fundamentals of a country as a place to invest and do business in.

"For many entrepreneurs the immediate result of the election will be a distant consideration compared to the day-in-day-out challenge and excitement of running a business," said Anil Stocker, chief executive of fintech firm MarketInvoice. "No matter what the result may have been this morning, the UK is a great place to do business."

However, he added that he would still like there to be more focus on small business from the government, urging it to "do even more to support and encourage small businesses and help them scale into tomorrow’s leaders". He claims such action will ensure the UK financial sector maintains its global position.

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