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Election will shape our digital economy

DIGITAL DEMOCRACY: Chancellor George Osborne’s March budget signalled the government’s pre-election direction of travel on tech. What will polling day bring for tech? Tech London Advocates founder Russ Shaw offers an overview.

Shaw,Russheadshot260Among the many announcements made in this month’s budget, a number of the chancellor’s new proposals were particularly pertinent – and welcome – to the technology sector.

Crucially, the chancellor announced £138m of funding towards the UK Collaboratorium for Research in Infrastructure & Cities (UKCRIC). This obscure-sounding but actually very important project will help ensure that the UK has “resilient and responsive” infrastructure fit to serve our 21st century economy.

The importance of this investment to the tech economy cannot be understated – especially to smaller businesses, 94% of which consider a reliable internet connection critical to the success of their businesses.

Despite being one of the world’s fastest growing economies, our digital infrastructure still lags behind many of our European counterparts: in the European broadband speeds rankings for example, London languishes in 26th place behind Vilnius and Tallinn. Unless this digital infrastructure debacle is addressed, it will continue to represent a serious threat to the growth of our burgeoning technology sector.

Thankfully, along with the UKCRIC investment, the government has also declared their ambition that ultrafast 100Mbps broadband be made available to nearly all UK premises. This is to be delivered through increased private sector investment and competition, coupled with greater deregulation – a strategy that has the best chance of ensuring that the economy is furnished with the high-speed broadband it so desperately needs.

However, no mention has yet been made of a timeframe within which this will be completed, and further investment in this field over the coming years will be required if Britain is to maintain its standing as a leading global technology hub.

Other key announcements in the Budget included a £100m grant for development of intelligent mobility (such as driverless cars), and £40m for demonstrator programmes, business incubator space and a research hub to help develop the internet of things.

The introduction of the ‘digital tax account’ was also revealed, as was funding for digital startup training for tech sector workers, greater enterprise investment scheme (EIS), seed enterprise investment scheme (SEIS) and venture capital trust flexibility, a review of regulation hindering tech innovation and confirmation of the ‘Google tax’.

Plenty to digest here then.

This was a budget that permeated almost every corner of our technology industry and beyond – consumers, entrepreneurs, corporations, innovators, developers and tech industry workers will all be affected. Why? Because from the internet of things to our tax returns, the government has realised the growing importance of the digital sector for the whole electorate.

These announcements will have ramifications across wider society, not just the digital industry itself.

Yet as the May 7 general election approaches, a number of concerns throughout the digital sector remain. Proposed immigration policies from the majority of the major political parties indicate that greater immigration restrictions are set to be introduced, despite our tech industry crying out for visa flexibility to attract more global technology talent to the UK.

Indeed, the recent migration advisory committee recommendations highlighted that British tech-starts are at a distinct disadvantage due to the UK’s immigration legislation. It is of critical importance that the immigration and visa issue is fully addressed in the next parliament, or else Britain faces losing ground in the global tech talent race.

Of equal importance will be the ability of our tech startups to scale up over the duration of the next parliament. Sherry Coutu’s recent Scale-Up Report highlighted that boosting the UK scale-ups population by just 1% could create an additional 238,000 jobs and contribute £38b to the economy within three years.

Given that thousands of new technology companies have been established in inner London in the last few years alone, much of this scale-up wealth will derive from the technology sector. The political parties must therefore ensure that the future of schemes such as SEIS, EIS, venture capital trusts and the British Business Bank – all of whom help finance smaller business growth – are guaranteed.

Over the course of the last parliament, Britain’s technology sector, especially in London, developed from a state of relative obscurity into a vibrant, dynamic hub that is at the forefront of the most innovative technologies today.

With continued government support through effective education, immigration and funding policies, it is my hope that this trend may long continue.

Tech London Advocates is a TechCityinsider content partner.