Hammond's Budget 2017 in tech: £500m investment package for 5G, full-fibre and AI

philip hammond flickr cc foreign commonwealth office
Image credit: Flickr/Foreign and Commonwealth Office

Nods to 5G and full-fibre echoed promises made in last year's budget, but chancellor Philip Hammond did announce a replacement for European Investment Fund lending "if necessary".

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Chancellor Philip Hammond committed a £500 million investment package for technologies including 5G, full-fibre broadband, and artificial intelligence in his budget today.

The chancellor opened this year's budget by saying that the world is "on the brink of a technological revolution, one that will change the way we work and live and transform our living standards for generations to come." Britain, he said, is "genuinely at the forefront" of this technological revolution, in research departments, universities, commercial enterprises, factory floors and business parks.

A "range of initiatives" will be delivered in the £500 million commitment, with £75 million to go towards pushing the UK forward in the race towards artificial intelligence technology, and £160 million for establishing 5G networks, as well as a commitment to rolling out a full-fibre network, with echoes of some of last year's announcements

The government will also introduce a regulatory body to examine the ethical impacts of artificial intelligence, the Centre for Data Ethics and Innovation.

A new "geodata spatial commission" will seek to "develop a strategy for using the government's location data to support economic growth" also.

The chancellor further committed £400 million towards electric car charging infrastructure and £40 million to electric car charging research and development.

In the technology startup world there has been a general air of uncertainty about what will become of the European Investment Fund when Britain leaves the European Union, and now Hammond has committed to replace this lending "if necessary".

In last year's Autumn statement, Hammond said that Britain doesn't invest enough in innovation and would need to plug the gap to the tune of £2 billion for R&D by 2021. Subsequently a new £2.5 billion R&D investment fund was committed in this budget.

Last year, a parliamentary committee warned that a looming digital skills crisis to the tune of millions threatened to restrict the productivity of the UK.

Britain's productivity rating was just downgraded by the Office for Budget Responsibility (OBR) along with a 0.5 percent drop in forecasted economic growth this year. The pound fell roughly 0.2 percent lower against the euro and the dollar following the announcement.

But Hammond promised that boosting productivity was a priority for the government. He went on to promote STEM skills, adding that computer science is "at the heart of this revolution" and so the number of trained computer science teachers will treble to 12,000 with an additional £40 million fund to train new maths teachers.

He also acknowledged the need to retrain or upskill workers with the "skills they need for the future". This centres around a "historic partnership" between the government, the Confederation of British Industry and the Trades Union Congress for a national retraining scheme, with digital skills a priority. There will also be a £30 million investment into digital skills distance-learning courses.

The Conservative party has for the last few years made a show of its openness towards technological change and attempted to cast itself as progressive in digital. However, the reaction to the technology investment has been mixed so far.

Matthew Adam, CEO of digital education provider We Are Digital, said he welcomed the plans but believes they were "not so much a leap in the right digital direction but more a necessary conservative step".

"With the UK economy now expected to grow by 1.5 percent in 2017, a downgrade from the 2 percent forecast made in March, coupled with the challenges of Brexit, the need for the UK to sit at the forefront of digital skills and inclusion is more pressing than ever," he said. "We need to be able to grasp, with both hands, the digital opportunities that present themselves to us in order to make us a true global digital force.

"The reality is we simply can't afford not to."

But Fergus Caheny, head of the technology group for accountancy and tax firm Smith & Williamson, believes that the floated investments in AI, 5G, clean cars and electric charge points will not be enough to actually deliver.

"Of course, any amount is welcome as it puts the issues front and centre," Caheny said. "However, the aim seems to be to grab headlines rather than to have a material effect. Looking at AI, 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."

Cyber security training consortium the SANS Institute, which is working with the government on the newly launched Cyber Discovery programme to encourage infosec talent in secondary schools, welcomed the boost to computer science teaching.

"While the country continues to innovate, we're left with huge gaps within our workforce," commented James Lyne, head of research and development at the organisation. "So it's vital that we provide the pipeline of students to take up those roles when they leave school and university." 

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