TechUK calls for next government to introduce ‘industrial strategy’ for AI

Tech companies have urged the next government to adopt an “industrial strategy” to accelerate the take-up of artificial intelligence (AI) across UK businesses.

The recommendation is one of seven urgent policy interventions identified by the UK’s technology sector for the first parliament of the next government.

With the Labour Party leading in the polls, and an election expected by the second half of the year or sooner, technology companies hope to convince a future government to boost the adoption of digital technology in the UK, and industry trade group TechUK argues in a manifesto released today that the UK needs to update its AI Strategy with a focus that goes beyond regulation towards delivering AI across the economy.

Antony Walker, deputy CEO of TechUK, said technology and digital innovation is going to be “absolutely essential” to meet the objectives of the next government. “There has been enormous support about the impact of AI,” he said. “We live with the fundamental issue that AI adoption and uptake is not straightforward. If we want to win the AI race, we need to look at the nuts and bolts of the deployment and adoption process.”

Walker added that regulators, government and the technology sector must work more closely to promote greater investment in technology innovation.

The UK has built up a competitive business environment that is easy to operate in, and supported by strong demand for tech products and services, according to a survey of business leaders published to support the seven-point plan, which updates a UK Tech plan published by the group in June 2023.

However, higher energy costs, business taxes, the impact of regulation and high interest rates are barriers to growth, the research found. Structural problems that make it difficult for small tech companies to access government contracts and the lagging digitisation of the UK economy are also holding companies back.

Technology manifesto

TechUK’s manifesto, Seven tech priorities for the next government, calls on ministers to intervene to promote affordable computing and cloud services.

It also calls for measures to promote the take-up of AI skills, incentives for research and development, lower energy and infrastructure costs, and access to finance for tech startups.

TechUK argues that with cloud-based AI and digital technology predicted to play a key role in every business by 2030, new approaches are needed for planning, energy costs, capital investment and regulation if the UK is to take full advantage of digital technology.

“To meet this new dynamic, the UK must take a strategic approach to AI more akin to a traditional industrial strategy, covering not only regulation, but also the infrastructure and enablers needed to deploy the technology effectively and accessibly across the economy,” it says.

The strategy will need to recognise that the development of AI policy is “iterative”, and will need close consultation with technology companies and regulators.

Priority areas include ensuring that “regulation and liability is fairly apportioned across the supply chain”, speeding up the delivery of key infrastructure including datacentres and computing capacity, and support for mentoring small businesses to help them take up digital technology.

Although ministers have recognised the need to move more quickly on planning permission for energy infrastructure to support an expanding need for datacentres, TechUK argues the UK needs to go further.

It calls on the next government to treat services including datacentres, supercomputers and cabling required for priority technologies as Nationally Significant Infrastructure that would qualify for significantly quicker planning approvals.

The UK also needs a long-term strategy for R&D incentives that will give businesses more confidence to invest in research and development, it said.

The trade group argues for bringing capital investment into the scope of R&D tax credits – a move that it claims could generate a net £4bn to the economy over the next 10 years .

The manifesto calls on the government to shake up its procurement processes by setting up a Technology Procurement Delivery Body to spread best practices across the public sector.

Establishing timelines for removing legacy IT – a move that TechUK said could save an estimated £2.3bn annually – and supporting startup companies accessing government contracts should be priorities for a new government.

Healthcare

Digitising healthcare will be essential to the future of the NHS, and will help the health service focus more on prevention, according to TechUK. Its manifesto supports the introduction of Citizen Health Accounts that enable people to manage their own healthcare data and share it with private and public sector healthcare providers.

Ministers of a future government are also urged to extend the voluntary pricing and access scheme, modelled on existing agreements with pharmaceutical companies, to digital healthcare. Although the move would see a rise in day-to-day spending on healthcare, it would lead to long-term savings through preventative healthcare offerings, the manifesto claims.

Digital skills

Ministers are also urged to develop a digital skills toolset that will allow jobseekers, employees and teachers to keep up to date with the latest advances in computing in an attempt to tackle a shortage of people with digital skills.

With a significant proportion of small companies failing to deploy software to streamline their work, the manifesto calls for financial and learning initiatives to help companies go digital.

The introduction of electronic invoicing and digital tax by regulators and government will also encourage the take-up of technology in small businesses, said TechUK.

Its manifesto also calls for the next government to expand the use of digital IDs to access government services, placing them on par with other forms of ID, such as passports or driving licences, within six months, in a move it says could cut the cost of providing government services.

Another measure is the creation of an Online Safety Sandbox to help companies develop and test technology to ensure it meets the requirements of the Online Safety Act, which is designed to protect children online, prevent fraud, and tackle disinformation and misinformation.

Scale-ups

The manifesto calls for government support to help small, fast-growing tech companies expand, including easier access to visas for overseas workers and new forms of financing.

TechUK also calls for an overhaul of the UK’s regulatory system, with a new mandate to regulators to support growth.

The trade association says the UK’s main political parties are increasingly looking to the tech sector to drive economic growth, reform public services and meet net-zero targets.

The manifesto aims to remove barriers to the growth of technology companies and address the threats to their success, said TechUK.

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