The abolition of stamp duty for most first-time buyers dominated the headlines after last week’s Budget.
But an equally important national priority was delivered too: positioning Britain to lead the fourth industrial revolution.
As the chancellor said, this wave of technological change is already transforming the way we live and work, raising living standards, delivering new innovations from 3D printing to internet-connected fridges, and turbo-charging our economy.
The fourth industrial revolution presents Britain with a once-in-a-generation opportunity to kick-start productivity growth.
The chancellor responded with a Budget that not only gets Britain “fit for the future”, but helps us get to the future first: driverless cars on the road by 2021, £500m for 5G mobile networks, full fibre broadband and artificial intelligence, a further £2.3bn for R&D, and new funding for digital skills distance learning courses.
Plans for infrastructure investment, regional growth, and backing for science and technology in the government’s industrial strategy, launched today, will build on the Budget’s success.
But to win the global race for success, we must do even more.
For the last year, I’ve been pushing the government to commit to meeting the OECD average of investing 2.4 per cent of GDP on R&D. This Budget does just that – the biggest increase in R&D spending by any government in the last 40 years – but we need to go further. To keep up with trailblazing nations such as South Korea and Israel, we need to hit three per cent of GDP.
Achieving this long-term goal will require a new era of public-private partnerships, like those recommended in Juergen Maier’s recent Made Smarter UK review.
That’s why I’m proposing that the next Budget includes a new Emerging Technologies Investment Fund.
It would help our entrepreneurs develop and commercialise new inventions by investing alongside private sector partners, to provide the kind of patient capital not currently available through the challenge-based funding system.
While investment is important, to ensure that innovative businesses remain in Britain as they scale up, we also need a world-class workforce that can do the jobs of the future.
The Budget introduces a new national retraining scheme to improve lifelong learning, investment into maths and other STEM subjects, and a commitment to ensure that every secondary school has a computer science teacher.
These are welcome reforms, building on the announcement in the Spring Budget of new T-levels and the apprenticeship levy to fund technical skills.
But as the number of qualifications and schemes grow, and as automation begins to eradicate certain industries, we must take a more strategic look at what skills are needed in our economy. That’s why we should conduct a national skills review at the start of each parliament to look at how we can future-proof our skills base, just as we already do for our long-term defence needs.
From the City’s Big Bang to the launch of Tech City, London has always been a pioneer of British innovation. So it’s right that Tech City received £21m last week to expand and become Tech Nation, with regional hubs around the country to replicate the capital’s success.
We should go further, and reform regional local enterprise partnerships to ensure that these public-private bodies charged with driving economic growth prioritise adapting to the fourth industrial revolution.
The Budget also positions Britain to lead at the global level – so we should aim to set the world’s standards and benchmarks for the future, not just enjoy domestic success.
New global gold-standards for the legal and regulatory frameworks that will govern new technology are urgently needed, whether that’s the ethical guidelines for artificial intelligence and driverless vehicles, or the protection of privacy in the new machine age.
Just as Greenwich Mean Time became the global standard for time in the nineteenth century, with the right political leadership Britain can also determine the fourth industrial revolution’s boundaries and benchmarks in this century too, locking in our world-leading position as an innovative economy.
That would be this Budget’s most enduring legacy, and an opportunity we must grasp as the government launches its industrial strategy.