All business eyes have, as usual, been on Philip Hammond’s budget. Of course, all companies are concerned about aspects of the budget – the tax levels, any new elements of red tape that are being introduced – but high-tech companies are especially interested this year.
It was widely heralded that Hammond would throw plenty of tit-bits to the high-tech sector and those waiting for the good news were not disappointed. The morsels came thick and fast: £160m for 5G mobile networks; £100m for an additional 8,000 fully qualified computer science teachers supported by a new National Centre for Computing £75m for artificial intelligence and, news that would gladden many a schoolchild’s heart, extra incentives for maths.
Hammond said that the high-tech industry was already thriving in the UK, with a new high-tech business founded every hour. “I want that to be one every half hour,” he says.
The drive for 5G – and how it’s funded – is a tricky problem. Just last week, BT chief executive Gavin Patterson was bemoaning the difficulty the company was having in building the business case for the technology. It certainly didn’t sound like the technology was coming round the corner any time now.
You only have to look at BT’s slow rollout of broadband and the fact that many rural communities are still struggling to get a connection to realise that overhauling the infrastructure remains a challenge.
Other mobile operators know this, Mark Evans CEO of Telefonica UK welcomed the government’s intentions and investment but warned : “To truly realise this ambition we need greater and urgent collaboration between operators, national and local government, enterprise and communities. We need a framework that facilitates the efficient and effective deployment of improved mobile networks which will deliver a better connected experience for everyone. Only then we will be able to become a world-leading digital economy.”
The intention is clearly there but, as with other aspects of the Budget, it’s the external factors that get in the way. There’s a parallel with housing – it’s one thing talking about encouraging new building, but the reality is that housing developments are fought tooth and nail by existing communities.
It’s one thing talking about the need for 5G. No-one disputes its importance, the technology heralds a rosy future where the entire population has access to fast connections at all time. The reality, as Mark Evans intimates, is that vendors won’t make the investment to make this happen. Sure, there will be 5G networks available by 2022 but large-scale? We live in a land where rural communities don’t have access to 3G networks, let alone 4G. There are parts of the country not 30 miles from London that don’t even have voice connections yet, we’re a long way from the world that Hammond is hinting at.
The other issue is where are the people who are going to develop these high-tech industries. If you talk to anyone in technology for a period of time and they will soon tell you that their biggest problem is finding skilled people.
It’s hard to gauge how many people are needed: it depends what’s meant by technical skills, whether it means programmers or staff with some digital knowledge, but however it’s defined, it’s in the thousands, probably tens of thousands. Earlier this year, a British Chamber of Commerce survey suggested that 76% of companies were suffering a shortage of people with the right technical skills.
Earlier this month, the government announced that it was doubling the number of Tier 1 Exceptional Talent visas enabling more IT staff to come here. It sounded great, until you realized that meant an additional 1000 people, not enough to make a dent in the numbers needed.
And, yes, it’s good news that Hammond has committed more money to train more computer scientists and, thus enable more IT teaching at schools, but that’s producing a generation that’s 10 years away from the workplace. It would have been more useful if the chancellor had said that there would be free migration for all technical staff so that businesses could continue to recruit or that there would be a massive retraining exercise so that existing employees could learn a new set of skills, but there was little of this.
Whenever George Osborne, Hammond’s predecessor wanted to show the level of investment in construction he was making, he’d don a hard hat and high-vis jacket and be photographed on a site. I’m pretty sure that in a few months time, Hammond will be seen at a technology company’s office, pointing earnestly at the screen, and talking up the investment that’s being made.
It’s one thing to throw money at high-tech – and that’s to be welcomed – but it needs more, much more, than that. It needs a mindset that’s geared towards training, a mindset where companies need to spend to invest, a mindset by local authorities to think about networking and the benefits it will bring.
A boost in mobile communications would boost all of us, let’s hope we have the mindset to deliver it.