'Not Good Enough': Response To UK Government Investment In Technology
'Stupefaction' is a good word. It could be used for the widespread response to the UK Government's proposals for investing in the technology sector, as revealed by the Chancellor of the Exchequer, Phliip Hammond, today when delivering the Budget. There are a lot of frustrated people claiming space in my inbox. When it comes to technology, this Budget does seem to confirm that the government likes 'hype' over 'nuts and bolts'.
In the Budget, Mr Hammond announced:
- £75m for artificial intelligence
- £400m for electric car charge points
- £100m to boost clean car purchases
- £160m for next-generation 5G mobile networks across the UK
"When you consider the hundreds of millions that Google annually invests in its Deepmind AI program, the government cannot sensibly think £75mn will achieve this aim” said Fergus Caheny, head of the technology group at Smith & Williamson.
While welcoming any investment as putting urgent technology issues front and centre, he added: " However, the aim seems to be to grab headlines, rather than have a material effect. Looking at AI (artificial intelligence) the UK has a commercial and technical advantage over most countries: the investment levels need to reflect this to ensure and maintain our competitive advantage.”
When it comes to innovation and R&D - which work hand in hand with developments in technology - Paul Falvey, tax partner at BDO said: “There was a lot of talk about innovation and a technological revolution but the announcement in relation to R&D credit was a little disappointing to say the least. A 1% increase is not going to encourage companies to be more innovative or invest in future-proofing their business.”
The Confederation of British Industry (CBI) was surprisingly upbeat in its response. But remember to allow for politics.
Here's a good example of how politics can get in the way of plain speaking:
Commenting on the Budget, David Sproul, senior partner and chief executive of Deloitte UK, said: “With the OBR downgrading the outlook for UK productivity, the Chancellor is hoping improving digital and construction skills will provide a much-needed boost....The announcement of a National Retraining Scheme (NRP), in partnership with the TUC and CBI, is a great example of how collaboration between government and business can help address some of the country’s most critical economic and social issues."
“The NRP will target sectors with skills shortages, such as construction and digital, with a £30 million fund to test AI and fund EdTech in online digital skills courses. Our research has shown" he said, " that businesses need more people with digital know-how, with a third of UK business leaders expecting AI to disrupt their industries. Yet businesses also told us they need workers with skills such as complex problem solving, creativity and emotional intelligence – AI will have the greatest impact when it is seen as a complement to human skills, not a replacement for them. " ETC.
He concluded: "The surest antidote to low productivity is investment in the skills of the future. Today’s focus on training is good step on the road to a high growth, high wage economy.”
Meanwhile...in my inbox earlier this week from Deloitte, was what looked like a good report - the Digital Disruption Index.
Deloitte's survey shows only two in ten UK leaders think there are enough school leavers and graduates with the appropriate digital skills; Half say their companies are not providing the training needed to support digital strategies; Over three quarters expect artificial intelligence (AI) to disrupt their industries; 46% expect their workforce to get smaller as they adopt AI.
Its first edition of this index includes responses from 51 organisations with a combined market value of £229bn. The report shows that UK business are struggling to attract and develop digital talent, with three-quarters of executives saying they face challenges recruiting the right digital skills.
Over half of leaders say their organisation is failing to provide the training necessary to support their digital strategy. Some 45% per also say that their organisation does not provide them and other leaders with the resources needed, such as training and coaching through a variety of multimedia channels, to develop their own digital skills.
The survey respondents also believe that artificial intelligence (AI) will have a profound impact on the future of work. "Of all of the digital technologies surveyed – including robotics, cyber, analytics and blockchain – executives believe AI will have the biggest impact on their organisations" it says.
But the Deloitte report points out : "Investment in AI at this stage remains modest though, with only 22% having already invested in it. Of those that have invested, only a third expect to spend more than £1 million in 2017. This suggests that organisations are currently testing with pilots, rather than large scale deployments."
This is set to change dramatically, it says. Half of UK organisations are expected to invest more than £10 million in digital by 2020; In the next three years, 85% of organisations plan to invest in the internet of things; 73% in robotics; 63% in augmented and virtual reality; 62 % in wearables; 54% in biometrics (such as voice and finger recognition); and 43% in blockchain, says Deloitte.
It also says that 42% of respondents do not believe they have a coherent digital strategy in place.
If wishes were horses, than maybe Brexit beggars would ride...but at first glance of this Budget, it doesn't look like there is any real leadership here from the UK government as we head towards a brave new world of technological change.