Sitting at the heart of the UK economy, the technology industry is a thriving catalyst, helping to fuel the country’s most successful areas, from healthcare to communication, manufacturing to mobility, and sitting across a whole host of digital and other creative sectors. In today’s article, we’re looking at the ways in which the UK government is supporting investment in UK technology.
The UK has one of the world’s largest technology ecosystems, encompassing thousands of tech start-ups, which help to create and maintain a robust entrepreneurial culture. Gaining serious momentum since 2008, London is and remains the current fintech capital of the world.
In order to keep the technology industry going at such a pace, support, in the form of government funding, is crucial, particularly in the current climate.
What are the statistics saying?
Between 2011 and 2016, £28bn was invested in UK technology. This is significantly higher than levels of investment seen in other countries such as France (£11.4bn), Germany (£9.3bn), Netherlands (£8.6bn), and those in Denmark (£0.9bn).
The Technology Innovation in Government Survey, published in August 2018, highlighted that departments across government were already in the process of using and looking at ways to continue to use emerging technology.
Alongside the implementation of The Government Technology Innovation Strategy, Parliamentary Secretary; Minister for Implementation, Oliver Dowden CBE MP outlined additional measures to continue to support the growth of the UK technology sector, including:
- A review of the use of artificial intelligence (AI) across the government.
- The launch of Spark, a marketplace for technology innovation that will allow the public sector to more easily find and buy innovative solutions using emerging technologies, which will be particularly helpful for SMEs in the GovTech sector.
- Working with the Department for Digital, Culture, Media and Sport (DCMS), taking steps to ensure the safe and effective use of digital identities across the economy.
What investment opportunities have the government implemented?
There is an abundance of support on offer from the government to help fund large UK tech companies, with a focus on various parts of the industry.
Enterprise Investment Scheme and Seed Enterprise Investment Scheme
The UK tech industry is also well supported through the use of effective tax initiatives, such as the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme alongside other FinTech hubs, helping to maintain its growing stature.
In fact, according to 2019 data analysis conducted by consumer research firm NimbleFin, the United Kingdom is the second-best country in Europe for startups.
Since its creation, following on from Chancellor George Osborne’s 2011 Autumn Statement, the Seed Enterprise Investment Scheme has become one of the most respected government-backed schemes to be implemented.
What does the future look like for UK technology?
In March 2020, Chancellor Rishi Sunak laid out the new budget, ‘announcing measures including an increase in overall R&D investment to £22 billion a year by 2024-25, and increasing the rate of R&D Expenditure Credit from 12% to 13%.’
With investment hitting the whopping £1 billion milestone, it shows promising backing in specific areas in the UK tech arena. For example, it was reported that in skills funding, there will be support for STEM teaching, including capital investment for up to eight new institutes of technology and hope for a more long-term commitment to the Aerospace Technology Institute.
The milestone comes as the government confirms a £153 million funding boost through the Industrial Strategy Challenge Fund. Further, and slightly over-matched by industry, the sector can also expect to see £200 million of investment provided by the private sector.
UK Research and Innovation Chief Executive, Professor Sir Mark Walport, said, ‘The UK is a world leader in quantum technologies. The funding announced today builds on the great progress we have made and lays the foundations for a quantum technology industry here in the UK. It will ensure that we remain at the forefront of this exciting and evolving field and that we realise its potential, from improved healthcare to more accurate and reliable navigation, that is fundamental to so many services.’
Helping to address the issue of online safety, the government have also announced £29 million worth of funding, which will be spent across six research centres across the UK seeking to tackle the various challenges around online safety and privacy. This boost of funding also includes £7m for a new online safety research centre of excellence.