Phillip Hammond MP plans to keep every aspect of the technology supply chain in Britain, he announced at the launch of an All-Party Parliamentary Group (APPG) on the Fourth Industrial Revolution yesterday.
The chancellor told the 250 parliamentarians, industry leaders and academics at the event in the House of Commons that others had previously "exploited" the technology invented in the UK, a situation he wants to change. Mr Hammond now wants to "shift the productivity paradigm decisively in our favour".
"I very much look forward to working closely with the group to ensure the government is not missing any of the twists and turns in the progress of this development — as sadly we have so often managed to do in the past — and to miss out for Britain on big step changes in technology," he said.
The APPG was founded by Alan Mak MP as a forum to ensure emerging technology trends are quickly reflected in legislation, and to shape policy that provides political solutions to the economic and social challenges technology brings. Mr Mak echoed the call of Mr Hammond to ensure the UK profits from its innovation.
"If we want the words invested in Britain, manufactured in Britain, discovered in Britain, made in Britain, to be our hallmarks for the 21st century, commercialisation has to be front and centre of our industrial strategy," said Mr Mak.
Mr Hammond told the audience under the Terrace Pavilion marquee that beyond the grey skies over the river Thames in front of him he envisioned a bright future for the UK tech industry, and that the country could "make sure that we are able to commercialise innovation".
"I won't bother reciting the many inventions and discoveries that we all know came from here, but sadly in the last 100 years or so we've mostly seen developed commercialised exploited taxed elsewhere in the world," he said.
"The challenge is can we put in place the supporting infrastructure to deliver the capital, the talent, the enterprise [and] the regulatory environment which allows the things that are invented here, as Alan said, to be developed here.
"To be innovated, to be commercialised, to be produced here — and yes why not since I'm the chancellor — ultimately taxed here, that would be very nice thank you very much. That is our challenge.
"The fourth industrial revolution representing a step change in technology and a step change in the way we work, the way things are made, the way value is created, gives us the opportunity to shift the productivity paradigm decisively in our favour. We're leaders in our region, and now we need to make sure we're early adopters, commercialisers, ahead of our competitors."
Up to 15 million of current jobs in the UK could eventually be automated over time, Bank of England chief Mark Carney estimated in a speech last December, but Mr Hammond was unconcerned about the risks of automation.
He referred to the example of the proportion of the US involved in agriculture, which fell from 41 percent in 1900 to two percent in 2000 over a period in which agricultural output rose dramatically, without marking a long-term increase in US unemployment rates. He also recalled his concerns for the future of the shorthand typists in his office when the transformative potential of personal computers first became clear.
"The shorthand typists have gone, but I don't see people sitting around idle," he said. "As one area of human activity is rendered redundant, other areas are created, and the kind of technological revolution we're on the brink of will create as many jobs as it destroys."
A predicted 65 percent of children entering primary school today will work in jobs that don’t yet exist, a challenge Hammond wants by supporting skill sets for the future.
"Investing in our technical education roots, an area where the UK has lagged behind for many years — arguably since the First World War — is the clearest possible commitment that we could make to this agenda.
"We will now proceed to test with a £40 million package of pilot schemes, lifetime learning approaches to see what works best and how we can ensure that the next generation are able to continuously learn throughout their working lives."
He reiterated his concern about Britain's productivity expressed in his autumn statement speech. The country currently produces 30 percent less in total than the US and Germany do in the same period of time. The £23 billion national productivity investment fund created in the autumn statement last year and an additional £2 billion public investment in R&D by 2020 are his principal attempts to improve this.
He said his plans to further cut corporation tax to 17 percent and make the R&D tax credit regime more easily accessible would support this, and that business-friendly regulation would also play a crucial role.
"We want to have a regulatory environment which is resolutely, aggressively even, pro-innovation," he said. "It's no good developing driverless vehicles if no one will let you test them on the road [...] we are going out of our way to make sure that all our key regulators have as a part of their core remit, the fostering of innovation.
"What is really exciting is for the first time in my 60 years the UK is really well positioned to ride this revolution from its head, rather than following it in its wake, and that means a huge new opportunity for the British people."
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