As the curtain falls on Boris Johnson’s eventful premiership, it presents an opportune moment for the UK tech sector to reflect on the successes and shortfalls of his government when it comes to technology and innovation.
As prime minister, Johnson has been a passionate optimist and diligent advocate for UK tech. Cultivating partnerships with emerging hubs like India has produced promising prospects for UK tech in new markets, while initiatives like the International Tech Hub Network have established the UK as a leader in fostering innovation in emerging ecosystems in collaboration with UK tech.
Earlier this year, Johnson’s government announced a new Digital Skills Council to address the workforce crisis the UK faces. According to the government, 80% of jobs now require digital skills, and experts estimate that the failure to meet this demand for digital knowhow costs the UK economy £63bn in potential GDP.
Recognising that this must change was a good first step – but the issue is far from solved.
Substance to match the rhetoric
Under Johnson, the UK has maintained a strong record on attracting foreign direct investment compared with other European economies. While the prime minister’s Global Britain campaign articulated a positive vision for the UK as a magnet for investment in all industries, the tech sector is waiting expectantly for his successor to produce substance to match the rhetoric.
While full of energy and bombast, consistency and stability have at times seemed absent from the Johnson government’s economic and business strategy. That is a tendency his successor cannot afford to continue.
Tech companies – from established players to startups and scaleups – must feel confident in the UK as a long-term home for investment and innovation.
The two remaining candidates for Johnson’s job, Rishi Sunak and Liz Truss, have a far from easy task ahead of them.
Attracting global talent to the UK sector is imperative. With more than 100,000 tech vacancies advertised in the UK each month, the next prime minister must work to attract talent to maintain the UK’s status as a hotbed of innovation. At the same time, boosting home grown digital skills is paramount to creating a solid pipeline of talent.
The UK desperately needs a diverse workforce offering a variety of digital skills to support growth in the sector.
R&D boost needed
Britain remains an attractive destination for listings and IPOs. In 2021, UK tech IPOs raised a record £6.6bn, and this year London was ranked the second best startup hub in the world with a value of $314bn, second only to Silicon Valley. The next prime minister must demonstrate a commitment to increasing this year on year.
Equally important is the need to deliver on and indeed surpass the current government’s commitment to raise R&D investment to 2.4% of GDP by 2027 if the UK is to keep apace of rivals like Israel (which spends around 5% of GDP on R&D).
A significant part of this R&D drive must focus on developing the UK’s semiconductor strategy. Not only are semiconductors increasingly prized as they become ever more integral to new and emerging technology, but a global chip shortage means a robust capacity to produce semiconductors for a range of uses is now ultimately an issue of national security.
Future leaders must recognise the critical role semiconductors are set to play in the global political economy, and act.
The best prime minister for tech – Truss or Sunak?
So, which of the two candidates are best poised to deliver on these priorities and beyond for UK tech?
Rishi Sunak has indicated his desire for the UK tech sector to be a key driver of future economic and job growth. With a background in tech and investment, Sunak has demonstrated his laudable credentials as an ambassador for the industry – from the £1.4bn Global Britain Investment Fund and the Future Fund to assist startups impacted by the pandemic, to backing significant tech sectors such as fintech, clean tech and digital currencies.
Sunak seems to be displaying the competence and ability needed to restore confidence in the UK as a stable place to invest, list new business and attract companies like Arm, whose vacillation over whether to list in London or New York demonstrates the urgency of this issue.
He has embraced several recommendations from the Hill Review for UK public market listings and the Kalifa Review’s blueprint to strengthen UK fintech on the global stage – including the launch of a new Scaleup Visa. These actions demonstrate a solid understanding of the leadership needed to support UK tech.
Liz Truss has yet to fully set out her stall and articulate a vision for UK tech, but she too has shown herself to be an ardent backer of UK industry and commerce – whether that be in tech or in cheese! From creating the Digital Trade Network for Asia-Pacific as trade secretary to supporting the creation of a Tech Exporting Academy to advising UK tech startups, Truss has also been a friend of the sector.
It is important that she display the strength of her commitment to growing the UK’s status as a leading global hub for tech companies.
Ultimately, whoever wins the race to become the next prime minister, the tech sector must make its voice heard to consolidate the UK’s place as a global leader and continue to strive to be the world’s most attractive base of innovation for science and technology.
Image credit: Simon Dawson / No 10 Downing Street