Chancellor Philip Hammond has announced the most tech-friendly Budget ever. It wasn’t only the headline figures that mattered though, welcome as they were, including more than £500m of funding, with a range of initiatives to boost artificial intelligence (AI), driverless cars, computer science education, broadband, 5G, tech startups, open data, digital skills and R&D.
More than that, the chancellor put technology at the heart of solving the UK’s productivity crisis – and as such, right at the centre of attempts to make Brexit an economic success.
Hammond identified Britain’s woeful productivity gap as its biggest economic challenge – it will be after Brexit, and it would be if we weren’t leaving the EU. The Office for Budget Responsibility (OBR) even revised downwards its forecast for productivity growth after UK productivity fell by 0.6% in the first six months of 2017.
As a result, the government is investing in what it sees as the next-generation technologies with the most promise to unlock greater productivity. More productivity means more competitive businesses; it means companies will (in theory) put up wages, helping to address the decline in real earnings since the 2008 crash.
That in turn alleviates pressure on welfare spending, which eases social inequality, which helps consumer spending, which boosts GDP in the sort of positive growth cycle every government tells us it’s capable of delivering.
Nobody is pretending technology is a panacea – it’s not going to deliver all those benefits on its own – but it’s clear the government sees tech as central to its hopes and plans to ensure Brexit is not the disaster many in the IT sector (and beyond) fear it will be.
The OBR agrees – committee member Sir Charles Bean told the Guardian the forecaster does not agree with doom-laden predictions that AI will destroy jobs. The government has taken that on board and sees such technologies as an investment that delivers growth in productivity in the way that investing in plant and machinery would have done 50 years ago for a manufacturer. It would be good to see similar tax incentives for corporate investment in technology, but that’s for another day.
As the CBI has pointed out, we need more than funding for next-generation technologies – firms need to improve their game on implementing established IT too. But for the first time, tech is not simply an economic nice-to-have – the government has placed it at the heart of its political strategy too. All they have to do now, is deliver.