UK government aims to transform Britain into the next Silicon Valley and tech superpower

Jeremy Hunt has made his objective clear: he wants the UK to become the world's next Silicon Valley. Speaking on January 27 to Bloomberg and executives from some of the world's leading tech firms he outlined his grandiose vision for the country.

The Chancellor's plans are centred on what he described as "the Four 'E's'": Enterprise, Education, Employment and Everywhere. Hunt is convinced that the Four E's are certain to "unlock our national potential to be one of Europe's most exciting, most innovative and most prosperous economies".

He wanted "to harness the ideas and the expertise in this room to turn the 'E' of enterprise into an enterprise culture built on low taxes, [the] reward for risk, access to capital and smarter regulation".

Further saying, "Being a technology superpower can change our country's destiny. So let's make it happen."

Hunt's speech comes as part of a wider trend in government rhetoric postulating a Britain of innovation and technology. Prime Minister Rishi Sunak first promised to "secure [Britain's] status as a science and technology superpower" when campaigning for the Conservative leadership last summer.

In the week prior to Hunt's speech, Grant Shapps - then Secretary of State for Business, Energy and Industrial Strategy, now Secretary of State for Energy Security and Net Zero - spoke at Davos of creating "a British version of Silicon Valley specialising in digital technologies and deep tech."

The goal of Britain-as-technological-superpower is manifestly a laudable one - but how achievable is it?

Could the UK really become the next Silicon Valley?

Andrew Duncan, Global CEO of Infosys Consulting, seems to think so, albeit contingently on some definitively make-or-break factors.

"The government must address the STEM skills shortage, such as mathematics and coding, and close the UK's long-term research and development [R&D] funding gap."

"Also, the UK needs to harness the power of its data, which is being considered by many as "the new oil. Despite having the largest data market in Europe, organisations have yet to realise its full potential."

'E' is for Education

In his speech, Hunt cited the £2.3 billion of extra funding given to schools as part of the Autumn Statement and Prime Minister Rishi Sunak's recent pledge that all children should be taught maths until the age of 18.

Sunak is plainly eminently serious in his plans to transform Britain into a technological superpower. His most recent reshuffle included the creation of the Department for Science, Innovation and Technology, and Michelle Donelan MP's appointment as Secretary of State for Science, Innovation and Technology. The government has also been unwavering in its commitment to spend £20 billion on R&D by 2024-25.

But 'E' is not for 'EU' - or 'EU funding'

These measures, however, may appear inconsequential to scientists facing the very real, and potentially devastating, loss of EU funding.

The prolonged (but probably ending somewhat soon) stalemate over Northern Ireland has left UK scientists unable to easily access funding as the UK's participation in the Horizon Europe programme has been decidedly precarious.

Horizon is the EU's flagship research and innovation scheme and, most importantly, has a budget of €95.5 billion. Cambridge University, which received €483 million across the 7 years of the previous Horizon programme (Horizon 2020), has received nothing since Horizon Europe began 2 years ago.

While talks between Sunak and Ursula von der Leyen, president of the European Commission, that occurred this week do indicate that a deal over Northern Ireland may be nearing, the release of a Treasury report on February 21 entitled 'Central Government Supply Estimates 2022-23' triggered immense furore from the scientific community.

The report revealed that £1.6 billion explicitly marked for scientific research - either the Horizon programme or its replacement but unspent due to the dispute - was instead being returned to the Treasury.

Maths matters

Also impeding the government's aims is the vast shortfall in the STEM skills necessary for technological innovation.

In December, the House of Lords Science and Technology Committee released a report following an inquiry into the skills deficit, citing a 'missing middle' of people with technical skills at Levels 3-5, poor take-up of apprenticeships and insufficient lifelong learning.

Unsurprisingly then jobs are going unfilled. The Institution of Engineering and Technology's Engineering Kids' Futures report (December 2022), estimated a current shortfall of over 173,000 workers in STEM sectors, averaging 10 unfilled positions per business, and quoting the government a price of £1.5 billion every year.

Surely also dampening the mood at Downing Street is the dour response to the planned changes to R&D tax credits have received from businesses. Coming into force in April, the most significant of changes will be to loss-making SMEs as a cut in tax relief from 14.5% to 10% will eliminate invaluable funding.

AstraZeneca's recent announcement that Ireland, not previously-intended north-west England, is to be the site of its new £320 million factory is not a positive omen for the success of British R&D - if Jeremy Hunt's lofty vision is to materialise a lot needs to change.