The UK’s tech sector has been one of its great successes over the past two decades. The emergence of Silicon Roundabout in East London, numerous start-ups valued at $1 billion or more and sizeable inbound investments have demonstrated defiance in the face of Brexit-related uncertainty. The new UK prime minister will need to continue to foster an attractive ecosystem if the UK is to maintain its reputation as a tech hub. Doing so will require shaping new policies to address private and public concerns.
Plotting a Way Forward: Content Regulation and Online Harms
Concerns over the government’s white paper on online harms have been raised throughout the tech sector, particularly in relation to duty of care proposals and the range of companies which could fall under the scope of future legislation. The regulatory approach adopted by the new government will need to deliver a balance between expectations of the government and citizens with the preservation of the digital economy. New legislation should not drive companies to adopt measures which could do more harm than good, such as cutting off access to some parts of the Internet. Additionally, the implementation of the Age Verification Scheme, due to come into effect in mid-July, has sparked doubts over the schemes effectiveness – particularly in regards to data concentration and cybersecurity. If this process is not approached with caution, a fumbled implementation will raise further questions over the government’s ability to regulate online harms.
Designing an Immigration System That Keeps Talent Coming
The immigration system is a rising concern for tech entrepreneurs, scaleups and companies expanding into the UK. Most Conservative leadership candidates are in favour of either reducing immigration, or implementing skills and salary thresholds. Tech companies already find themselves in competition for talent and surveys suggest many EU nationals working in the tech sector are considering leaving. A more stringent immigration regime risks diverting investment and a talented workforce elsewhere.
Building a Workforce Fit for the Future
As new business models underpinned by technology emerge, the government will need to ensure people of all ages and backgrounds are equipped with the necessary technical skills required to adapt to the future. One such example is the government’s £18.5 million retraining fund, intended to support adults to find new employment or develop in their careers and upskill in data science and AI. The new prime minister will also need to ensure diversity in the tech workforce. Despite the growing body of research emphasising the benefits of diverse workforces, many companies have been slow to address this issue.
Balancing London’s Innovation Hub Against Regional Growth
London has long been at the centre of growth within the UK’s tech sector and has created a lively ecosystem by encouraging innovation, collaboration and entrepreneurship. However, the high cost of doing business in London risks hindering future growth. Emerging local industrial strategies led by local enterprise partnerships could provide a solution by expanding the reach of the UK’s technology scene and leveraging technologies like videoconferencing and virtual and augmented reality to keep employees connected. The growth of regional tech hubs could play a key role in mitigating international competition aiming to unseat London as Europe’s tech capital.
Striking a Balance Between Leading and Following on Taxation
With pressure for large tech companies to pay more tax, some countries have started to impose local digital taxes, while others are advocating for EU-level and G20-level action for fiscal policy. In the zero-sum nature of digital taxation where countries and trade blocs are essentially competing for the same pots of money held by tech companies, the new prime minister will have to think strategically and act at the right moment. Act too soon and a national tax could disincentivise growth and investment; act too late and the UK could find its share of tax revenue greatly diminished.
Establishing a Position on Infrastructure
As the international storm over Huawei’s role in 5G infrastructure rages on and the national security controversy that cost Gavin Williamson his Defence Secretary role recedes, the UK will soon have to take up its position on Huawei’s involvement in the UK’s 5G network. Siding in favour of Huawei could jeopardise security cooperation with other countries, while moving away from the firm could increase the cost of 5G rollout. This will be a controversial issue for the new prime minister, especially at a time when public finances are strained.
In addition to the uncertainties of Brexit for the tech sector, Theresa May’s successor will face numerous challenges in an attempt to foster growth while pushing for regulation and protecting individuals and their rights. Companies should be eager to engage with the new prime minister and his cabinet to ensure regulation does not hamper the tech sector’s continued growth.
Author: Tiernan Kenny, International Public Policy Manager, Access Partnership