Autumn Budget 2017 - technology sector expectations
With the release of the Autumn Budget fast approaching (22 November 2017), it is time again for my Marketing Manager to ask the question what I’d most like to see from Government, specifically pertaining to technology, a sector I specialise in.
Access to talent
My priority would be to double-down on the sectors access to talent. Technology is a global industry and one in which the UK is a global leader. The UK tech is thriving and currently growing at twice the amount of non-digital sectors and in doing so, creating new jobs at twice the rate. With such explosive growth, the ability to recruit and retain talent from around the world is crucial to the industry’s continued success.
In the wake of Brexit, nearly 18 months ago, the question still remains; will the UKs access to talent be reduced? There is of course two ways of achieving of our needs; train and retrain, or import talent.
Speaking to the first method, in the 2017 Spring Budget, there was an ‘effort to create a culture of retraining the UK’ by investing £40 million in the Department of Education. This will have been used to help retrain UK workers to improve our domestic workforce for the long term after Brexit. As well as this, a new route of education has been announced, ‘T Levels’.
“Education Secretary Justine Greening, recently announced the first three T levels in Digital, Construction, and Education and Childcare, which will help deliver a generation of home-grown talent post-Brexit”.
The goal is to make the T Levels as respected as the more traditional A Levels – this will make both the students feel comfortable taking this education option and employers more aware of a larger pool of talent making the recruitment of the highest level, most suitable staff more achievable.
On top of this, after the UK struggling for many years to develop home-grown experts in STEM areas, the Spring Budget included £300 million of 1000 new PhDs and fellowships to combat this area of weakness. It is my hope that in the Autumn Budget the Government continues this momentum and allow for the development of British talent post-Brexit amid the uncertainty surrounding work place visas and EU investment.
The Autumn Budget will have to include methods to retain the best staff. If the Government is providing all these new opportunities for training, retraining and career development, then it is crucial that the talent is kept within the UK to make the spending worthwhile to reap the full benefits of the investments.
Speaking to my second point on importing talent, the vote to leave the European Union (EU) begins a major shift in UK migration policy. There is still a chronic shortage in digital skills which is why European talent remains so important to continued growth. According to a techUK report, EU-born workers comprised 4% of digital sector employment in 2009 but 17% of the sector’s growth through to 2015. It is therefore essential that Government creates a frictionless post-Brexit migration system that is in tunes with the public’s expectations around immigration control but also attuned to the sectors growth needs.
Research & development
Another area that we should hope to see represented is efforts to encourage innovation and investment in research and development. This would allow for the UKs technology sector to grow internally.
“Investment in digital businesses rose across Britain last year according to the 2017 Tech Nation report. The report also revealed that the UK leads the way in Europe, attracting £28bn in technology investment since 2011, compared with £11bn in France and £9.3bn in Germany”.
The industry has been supported by boosting research and development by the process of R&D tax relief. However, unexpectedly, many companies are not taking advantage of their entitlement, and so missing out on the gains. The main reason why companies don’t apply is due to the fact it is not widely known in the industry that their activities are eligible for the tax relief. If this were to become more widely known, it will mean that the sector is getting more income, meaning that more money can be invested into future research and development which can they can then gain tax relief from, triggering a multiplier effect for the long term.
Investment & retention
Lastly, it’s difficult not to notice the number of UK tech companies being snapped up by their US counterparts. The latest example being UK founded artificial intelligence businesses such as Autonomy, DeepMind, SwiftKey and VocalIQ. When it comes to scaling up, our tech businesses often look west.
The US -- Silicon Valley, especially – either has deeper pockets or more appetite for businesses at this stage, and are able to provide the huge investment required and offer a significant platform for its use.
I am not sure I have a ready made solution but we need to provide an economic environment that will encourage UK investors to keep the ownership of these large successful businesses in the country which in itself generate activity and innovation.
Overall, in the upcoming Autumn Budget 2017 we hope that the attention that the technology sector was shown in the Spring Budget is continued and enhanced into this period to further fuel the fastest growing part of the UK economy.