UK announces £370 million Science and Technology Framework
At the beginning of the year, Jeremy Hunt declared that the government was announcing ‘growth sectors which [would] define the century’, alongside Rishi Sunak pledging that Britain would become the world’s next Silicon Valley. Following this, the UK government has invested in a £370mn Science and Technology Framework, placing tech at the centre of Britain’s agenda. Claire Trachet, tech industry expert and CEO/founder of leading business advisory Trachet, comments on the effects the new framework will have on the tech industry and investment in the UK.
According to the government, the framework – crafted by ‘industry experts and academics’ – will be an investment into the main technology areas that the UK has global leadership in, which includes: AI, quantum technologies, engineering biology, semiconductors, and future telecoms. The aim of the new initiative will centre around various actions, such as: advancing public and private investment for research and development, while also expanding the existing skill base and funding for tech start-ups.
The announcement comes at a crucial time for Britain’s tech sector, following the collapse of both Britishvolt and Tech Nation as a result of losing essential government funding. Founder and former CEO of Britishvolt, Orral Nadjari, publicly stated that the company could have been saved had the government given only a third of the £100 million ($124 million) pledged by former Prime Minister Boris Johnson and the Automotive Transformation Fund. These events have signalled how there is an increasing need for government support in the tech sector, specifically for start-ups and scale-ups.
The framework does, however, raise some concerns amongst industry experts who appear underwhelmed by the investment. The government has also allocated £10mn with the hopes of advancing the nation’s ‘next tech and science start-ups’, which they believe have the potential to become the next big tech company, following in the footsteps of Apple, Google and even Tesla. Yet, there remains concerns as to whether these investments are big enough to support such ambitious expectations.
Claire Trachet (CEO/Founder) comments on how the government’s new framework and how it will impact technological innovation in the UK:
“As we have seen with companies like Britishvolt and Tech Nation, funding under favourable terms has become increasingly inaccessible for tech scale-ups, which has led to investors prioritising profitability over growth. Government support is crucial for the recovery of the sector following steep valuation drops last year, which resulted in investors becoming cautious and growth plans being halted.
“This framework is definitely a step in the right direction. The government needs to invest in tech in order to stimulate the economy during these challenging times, especially if Britain wants to hold onto its title as one of the leading countries for tech innovation and growth. This is also a good sign for British startups, who are at the forefront of innovation and need that investment to succeed.
“We are seeing technology helping businesses solve big problems and the growing desire for these advances. In addition, there is a growing number of investors who are sat on a dry powder pile having paused investments due to uncertainty in 2022. This means there are significant opportunities on the horizon, and now is the moment to prepare and get deal ready as optionality will increase in H2 of this year.
“However, it’s also crucial that these promises don’t fall below expectations. Startups and scale-ups need significant investment and government backing to succeed, and the UK can’t afford to have a repeat of what has happened with Tech Nation and Britishvolt. This means that there needs to a much bigger push on investment for these tech and science start-ups from the government.”