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Technology Planning and Analysis

Expert Comment: Tech gives plaudits and brickbats for UK's Budget

UK Chancellor George Osborne today announced the UK Budget. Obviously the upcoming EU referendum featured, as did a tax on the sugar content of soft drinks, but what about technology? We asked the tech industry what they thought of the Chancellor’s announcements.

Overall, the Budget seems to be a mixed bag, with the “tax break for the digital age” appealing to startups and SMBs, and the new reforms that will make it easier to erect mobile phone masts in ‘not spot’ areas currently lacking cellular coverage are obviously happy news for telecoms. But, many of our experts have expressed concern over a lack of specific tech focus, particularly in today’s “digital age” and in light of the IT skills gap.

 

Promising news for startups

“There was plenty in there for startups and digital entrepreneurs so that's definitely good news. His "tax break for the digital age", giving new tax free allowances to so-called 'micro-entrepreneurs', will hopefully encourage more people to start taking advantage of the huge opportunities available to them through online and ecommerce businesses. For more established startups like us, the small business rates relief will undoubtedly help us grow, but I would have liked to see a reverse in the cut to dividend payments for owners. Away from work, the lifetime ISA sounds intriguing for us, especially as our whole workforce is under 30. The devil will no doubt be in the detail with that one though!”

Aaron Dicks, co-founder, Impression

 

The Northern Powerhouse is vital for continued growth

“Despite much discussion, there still remains a level of scepticism of whether the ‘Northern Powerhouse’, laid out by the government in 2014, will ever become a reality… Transport networks play a major role in the continued socio-economic development of the Northern Powerhouse. Major infrastructure projects like HS2 and HS3 are certainly a much welcomed and needed step in the right direction, but it is important to continue to drive more immediate improvements across both road and rail. Ease of connection to the established Hubs of London and mainland Europe are vital but equally, it is important to encourage the free flow of talent between companies across northern districts like Manchester, Leeds and York. Competition for and the exchange of talent across the region can only further the development of each hub. Internet connectivity is a fundamental requirement for any business. While broadband speeds within the major cities are good, if you have people working from home in the more rural parts of the north, this can prove to be a challenge. The roll-out of high quality rural broadband is a nationwide issue, but it is crucial to the development of the Northern Powerhouse.”

Michael Gould, Chief Technology Officer, Anaplan

 

Mobile masts are double-edged sword
“The Chancellor, George Osborne, has presented the UK with a double-edged sword in his Budget today; on the one side we have a possible solution for the UK’s ‘not spot’ problem, but on the other, much sharper side, we have a reform that could have many environmental implications. By easing planning permission on erecting mobile masts, the UK Government will likely send shivers down the spines of campaigners who have fought long and hard against aesthetically unpleasing base stations from appearing in beauty spots, and even next to schools. Furthermore, it will involve the spending of hundreds or even thousands of pounds on deploying additional mobile masts – money that could be better spent elsewhere.”

Scott Willis, CEO, Zinwave

Connected corridor welcome news

“I welcome the Chancellor's encouragement of connected vehicle technology in the UK. While some people may be terrified about the prospect of autonomous or driverless vehicles on the streets of the UK, in my view it's a reality they'll need to get used to. 

“The Government’s announcement to bring down the regulatory barriers facing autonomous vehicles and establishing a ‘connected corridor’ from London to Dover are the sort of measures that might encourage significant telecoms infrastructure investments. Seamless, high quality and ultra-fast fixed and mobile connectivity is essential for successful and safe deployment of connected vehicles.

“The sooner Ofcom can conclude the Digital Communications Review, the sooner organisations can get the long-term assurance they need to write the big cheques for telecoms infrastructure that will underpin the creation of new digital opportunities, such as connected vehicles.”

Alex Holt, Partner and Head of Telecoms, KPMG

 

Apprenticeship target pointless if apprenticeships aren’t completed

‘‘With National Apprenticeship Week in full flow, I was hugely disappointed to see the issue gain no mention in this year’s budget. Almost a third of apprentices in the UK currently fail to complete the scheme they are on. The government’s target of three million new apprenticeships by 2020 is completely pointless if it only includes those that start an apprenticeship programme, as opposed to those that start and finish one.

“This is particularly worrying for the technology sector – an industry that is crying out for skilled workers. It’s important that the topic of apprentices doesn’t become a tick-box exercise and that we’re providing a number of quality schemes. We must have a bigger emphasis on Government and industry working together to deliver quality, not just quantity.’’

Matt Meckes, technical director, Cohaesus  

 

 

Disappointing lack of tech focus

“Apart from a quick mention of investment in 5G technology and a tougher stance on tax avoidance and evasion by multinational corporations, I’m surprised at the general lack of focus on the UK’s technology sector, especially since the theme of today’s budget announcement was to make ‘Britain fit for the future’. It’s disappointing to see a lack of commitment to resolving the issue that many areas of the United Kingdom remain poorly served in terms of the communications and connectivity services, which are the lifeblood of a modern economy, and suffer from poor Internet access speeds and mobile network coverage as a result.

“I would have also liked to have seen a greater commitment to furthering investment in the tech industry that last year alone raised $3.6bn in venture capital, a greater focus on job creation in the sector and a more precise plan on how to address the ever growing technology skills gap.”

Tim Patrick-Smith, CIO, Getronics

 

ICT skills notably absent

“We believe the government’s pledge for lower taxes on businesses and enterprises will help create more jobs. This is good news for any industry, but the tech industry should be particularly pleased – with the skills gap still a major obstacle in realising the full potential of the British technology sector, the new tax breaks will certainly help.

“However, we need a further focus on developing ICT skills for young people, and that was notably absent from today’s budget announcement. Teaching maths until 18 for all pupils is certainly a step forward, but we cannot underestimate the importance of ICT education in equipping young people with skills they will need for the jobs of the future. In Asia, students studying STEM (Science, Technology, Engineering and Maths) subjects account for up to 20% of the student population, but European STEM students make up just 2%. Given that the tech sector is set to grow much faster than GDP, in the words of the Chancellor himself, we need to do more to ‘act now so we don’t pay later’”.

Martin Ashall, CTO, CA Technologies UKI

 

 

Radical rethink of education is required

“With its strongly promoted tag of being the budget for the next generation, it’s disappointing that the Budget doesn’t do enough to help bring forward the digital economy. The government’s strategy has some merit, but it has previously recognised a digital skills gap that impedes the country’s economic progress and needs to do more. Investment needs to be increased and it would have been good to have seen that reflected in the Chancellor’s speech.

“As an entrepreneur who has built a global technology business, my bigger concern would be that the small amount being invested is actually being spent unwisely. While teaching basic coding has value, it will not deliver the expertise and capacity the UK needs quickly enough. A radical rethink is necessary. Rather than teaching people how to speak to machines, the government must focus more on programmes that will educate people as to the value of making machines speak like people. Making IT more intuitive will widen its use much more profoundly and enable enterprises and the public to advance their digital transformation plans sooner and more effectively.”

Alan Trefler, CEO and Founder, Pegasystems

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Kate Hoy

Kate Hoy is Editor of IDG Connect

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