The UK government will turn around the country’s research and development environment with heavy public investment into the tech industry it claimed in a new Industrial Strategy, to mixed response.

As part of the strategy, the sector-specific digital and technologies plan outlined a regional approach to investing in R&D for “frontier technologies”, semiconductors, AI and quantum among others. It will also put £187 million towards training one million young people with new tech skills to address a talent shortage.

Technology Minister Peter Kyle touted “record levels” of public sector R&D investment, but blamed the “political chaos” of the previous government for declining R&D investments. He claimed funding was needed for technologies “indispensable to our national security", with the hopes that the private sector will follow suit.

The government said it would boost its own R&D funding to £22.6 billion in 2029/30 to address the UK’s declining share of the top 200 global R&D investors and push it to become the world’s third largest economy for commercial R&D in the tech sector, behind the US and China, by 2035.

The industry reacts

The ambitious strategy, which also outlines £4 billion in support for start-up and scale-ups from the state-owned British Business Bank and improved UK Export Finance support to access foreign capital, was largely welcomed by the sector, but achieving its aim of seeing £3 of private R&D funding for every £1 of public sector funding will depend on the speed and clarity of action taken in response.

TechUK’s Deputy CEO Antony Walker said: “In an era of rapid technological change, the government must now work in true partnership with business to bolster investment and digital adoption across the whole of the UK economy and secure the country’s competitive advantage in key markets.”

See also: UK.gov's AI ambitions at odds with creaking, legacy kit and penny-pinching pay grades, MPs warn

Tech talent attraction and upskilling is also a key component of the strategy: Digital, AI and engineering educational ‘short courses’ will be introduced in England; analysis by Skills England will inform a skills strategy for the sector; and a new Global Talent Taskforce and fund will “attract world-class researchers” and improve visa access.

Cisco’s UKI Chief Executive Sarah Walker welcomed the strategy, but called for a broad approach to upskilling: “From traditional IT roles to marketing and supply chain management, almost every job will require AI literacy in the very near future. We need to ensure up-skilling is addressed with equality, to avoid exacerbating economic gaps.”

The AI approach

The strategy’s focus on tech R&D comes ahead of a Cyber Growth review and publication of the National Cyber Strategy. It follows a funding boost for the sector in HMG’s recent spending review, which committed £2 billion to the AI industry, £750 million to a new supercomputer in Edinburgh, and at least £300 million for regional funds across the UK.

The industrial strategy also doubles down on the government’s AI Action Plan, promising to support the newly created Sovereign AI Unit and deliver on the plan’s regulatory recommendations.

The commitments, which include a requirement for all regulators to publish an annual report on AI growth in their sector, come despite the news that the plan’s author, and the Prime Minister’s AI advisor, would be leaving government in July.

However, concerns about the government’s definition of ‘sovereign AI’ are not addressed in the new strategy, said cloud computing company Civo’s CEO Mark Boost.

While he welcomed the ambition of the strategy, he said: “The strategy rightly reinforces the UK’s goal of owning and scaling domestic AI capabilities, but that goal is undermined if the platforms supporting them remain in the hands of hyperscalers governed by foreign laws, including the US CLOUD Act.”

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