philip hammond chancellor government budget

Autumn Budget 2017: £500m investment for AI, 5G and fibre broadband rollout

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Chancellor Philip Hammond has revealed the contents of his Autumn Budget which includes investment for new 5G mobile networks, further advancements in artificial intelligence (AI) technology and money for full-fibre broadband connectivity.

Out of the £500m fund, £75m will be put towards the new Centre for Data Ethics and Innovation which will work with government, regulators and industry to “lay the foundations for AI adoption”.

The money will be used to “take forward key recommendations” of the centre, fund PhD researchers and create fellowships to conduct research into the technology.

The Chancellor also announced extra investment in connectivity, focusing on 5G mobile, the next generation of mobile connectivity, and further funding for the rollout of full-fibre broadband.

This would include £385m of investment to improve mobile and internet connectivity for train passengers. The law will be clarified so that people who charge their vehicles at work will not be taxed as a benefit in kind.

“The world is on the brink of a technological revolution,” Hammond said.

“One that will change the way we work and live and transform our living standards for generations to come.

“And we face a choice: either we embrace the future, seize the opportunities which lie within our grasp and build on Britain’s great global success story, or reject change and turn inwards to the failed and irrelevant dogmas of the past.

“Others may choose to reject the future. We choose to embrace it. A new tech business is founded in Britain every hour. And I want that to be every half-hour.

“So today we invest over £500m in a range of initiatives from artificial intelligence, to 5G and full-fibre broadband.”

Earlier this week, Prime Minister Theresa May announced a £1.7bn plan to improve transport links between prosperous city centres and a £2.3bn fund for research and development spending, due in 2021/22 in order to help the economy grow after Brexit.

Science and Technology select committee chairman Norman Lamb said his committee of MPs had, initially, “cautiously welcomed” the move.

He added: “On closer inspection, however, it becomes clear that R&D spend will actually only rise by GBP0.5bn against current commitments for the year before [2020-21].”

Last week, the select committee wrote to Hammond requesting an increase in the UK’s R&D spend of at least £2.4bn per year within the next 10 years.

Lamb said: “At a time of uncertainty when the science community is looking to the Government for leadership, the Chancellor’s plans are a tentative move in the right direction, but much more is needed.

“The science and research sector needs clarity and increasing innovation in the UK should be a top priority as we look to counter static productivity growth and doubts about continued EU research collaboration and its funding.

“Now more than ever, the UK must show itself as a global leader in science and technology.”

Responses

Paloma Cid, transport lead at the IET said: “The government’s plan to bring driverless cars to our roads is a bold and exciting target. Driverless vehicles have huge potential to transform the UK’s transport network by improving road safety, reducing congestion and lowering emissions.

“As we move towards driverless cars appearing on our roads, the public’s acceptance and trust will be crucial, so it will be imperative to win over everyone from car manufacturers to consumers to the benefits of driverless cars.”

Ahmed Kotb, IT and communications lead at the IET said: “The UK has a real opportunity to lead the world with new technologies such as artificial intelligence, so the additional funding will play a crucial role in positioning us on the world stage. As technology continues to impact industry and digital technologies rapidly advance, it is crucial that to fully exploit these exciting opportunities we must ensure that skills development keeps pace with digitisation.”

Tudor Aw, UK head of tech sector at KPMG, said: “The Chancellor has characterised today’s budget as one that is ‘fit for the future’.  In that context, it is hugely encouraging that the tech sector sits at the heart of that future. 

“Commitments to emerging technology such as 5G, AI and data science is to be applauded, but it is important that core technology businesses are not forgotten in the chase for the next shiny toy.  In particular, the UK has strengths in ‘old-school’ tech sub-sectors such as software, IT services and semi-conductor technology. 

“Tech investment should therefore be made in education, regulation, tax and other incentives to ensure our strength in the tech sector is broad based and not just those areas that sit at the top of the latest hype curve.”

EEF chief executive Terry Scuoler said: “The government’s commitment to a comprehensive industrial strategy and support for manufacturing, innovation and new technology is a welcome stiffener for business as Brexit anxiety looms. The Chancellor’s explicit pledge to deliver an implementation plan ahead of Brexit will reassure companies of the government’s intent, giving business certainty amid gathering Brexit jitters.”

Doron Youngerwood, product manager, big data and artificial intelligence at Amdocs said: “With the digital economy so crucial to growth, it’s no surprise the Chancellor has chosen to invest in cutting-edge technologies, such as AI, to maintain the UK’s position as a leader in the sector.

“This is a smart move because AI is becoming more prevalent in everyday life and influencing everything from consumer spending to business decision-making, but the £500m technology investment needs to be spent wisely if it’s going to have any real impact on the UK economy.

“The government plans to address the digital skills gap, but specific investment is required for the training and education of marketers and sales teams who will be responsible for implementing AI-led initiatives.”

Li-Ke Huang, research and technology director at Cobham Wireless said: “With Brexit looming, it is important that the UK demonstrates its ambitions to develop the communications infrastructure to ensure our digital economy continues to thrive.

“The £500m technology investment in initiatives such as next-generation 5G networks is a step in the right direction. Building on earlier government funding for UK universities - King’s, Surrey and Bristol – to develop test networks, the UK is now in a strong position to help define a global framework needed to commercialise the new standard.

“Whilst we can expect China and South Korea to lead the 5G cellular march into and throughout 2018, the UK will continue to excel is one crucial area: R&D. This includes developing the potential 5G air interfaces and enabling the various applications that will rely on the new wireless standard.

“The Chancellor has backed driverless cars as a lucrative use case for 5G, which he ambitiously forecasts will be on our roads by 2021 and tested next year. However, the future success of this and other 5G applications, such as the Internet of Things (IoT), will be dependent on investment in road-testing new networks now.”

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