Science, Innovation and Technology backed in Chancellor’s 2023 Autumn Statement
A raft of measures worth hundreds of millions from compute to quantum and life sciences research to pro-innovation regulation were announced in the Autumn Statement yesterday (Wednesday 22 November).
Department for Science, Innovation and Technology (DSIT) in the 2023 Autumn Statement
Tax cuts for working people and British business headlined the Chancellor’s ‘Autumn Statement for Growth’ today to build a stronger and more resilient economy. The plan to unlock growth and productivity includes boosting business investment by £20 billion a year, getting more people into work, and cutting tax for 29 million workers – the biggest tax cut on work since the 1980s.
In science, innovation and technology, a new £500 million investment in artificial intelligence in compute will support the UK’s world leading scientists and AI researchers to continue delivering extraordinary new discoveries benefiting us all – giving AI start-ups and other businesses access to cutting edge compute that boosts productivity and innovation and helps make our country the best place in the world to create an AI start-up.
Developing this computing power also benefits society beyond lifting economic growth, helping us tackle climate change and power the discovery of new drugs.
Additionally, five new Quantum Missions were unveiled to galvanise academics, industry and private investors to commit time and resource towards hitting significant milestones, like embedding quantum sensing into the NHS.
We are also backing businesses to scale up with new funding, providing clearer rules on stakes for ‘spinout’ companies and strengthening pro-innovation regulation with new regulatory sandboxes offering supervised real-life or simulated tests to trial new products, services or business models to meet safety standards while also fostering creativity and technological advancement.
Science, Innovation and Technology Secretary, Michelle Donelan, said:
I believe that the UK’s incredible science and tech success story is all about having the skills for the future, investment in scale-up and sensible regulation.
The Chancellor’s Statement injects even more fuel into our science and tech economy - and will help to realise my vision for a country where more high value British jobs are driving us faster toward amazing discoveries that will help us live longer, healthier, happier, easier lives.
Among the Department for Science, Innovation and Technology (DSIT) policies announced in the Autumn Statement are:
Tech and investment
Compute
The Chancellor announced a £500 million investment in AI compute over two years as part of an expansion of the AI Research Resource - providing the UK’s world leading scientists and AI researchers with access to cutting-edge computing power that is necessary to process complicated, lengthy tasks.
This investment will help researchers make the extraordinary discoveries, such as better understanding climate change, discovering new drugs, and maximising the use of AI to improve lives.
This will also provide our AI start-ups and other small medium enterprises (SMEs) with access to this resource driving productivity and innovation and helping make the UK the best place in the world to create an AI start-up.
Quantum Missions
The Chancellor launched five new Quantum Missions aimed at securing the UK’s status as a world leader in the technology, by setting clear milestones for inward investment and research in areas like computing, healthcare and navigation.
Quantum technologies – one of the government’s five critical technologies – are devices and systems using quantum mechanics to provide capabilities that ‘classical’ machines like binary computers cannot. They could bring enormous benefits to the economy, such as making it possible to solve complex problems impossible to solve with even the most powerful high-performance classical computers, and opening entirely new frontiers in sensing, timing, imaging, and communications.
With the biggest impacts for quantum technologies expected in the long-term, these missions will help crystallise the activity and investment needed in the public and private sectors to achieve ambitious milestones for this technology.
The Missions, backed by our £2.5 billion Quantum Strategy, are:
- By 2035, there will be accessible, UK-based quantum computers capable of running 1 trillion operations and supporting applications that provide benefits well in excess of classical supercomputers across key sectors of the economy.
- By 2035, the UK will have deployed the world’s most advanced quantum network at scale, pioneering the future quantum internet.
- By 2030, every NHS Trust will benefit from quantum sensing-enabled solutions, helping those with chronic illness live healthier, longer lives through early diagnosis and treatment.
- By 2030, quantum navigation systems, including clocks, will be deployed on aircraft, providing next-generation accuracy for resilience that is independent of satellite signals.
- By 2030, mobile, networked quantum sensors will have unlocked new situational awareness capabilities, exploited across critical infrastructure in the transport, telecoms, energy, and defence sectors.
Semiconductors
We have announced plans to make it easier for semiconductor manufacturers to grow and stay in the UK.
The Chancellor clarified the government’s priorities for the UK Infrastructure Bank (UKIB), to ensure it is able to invest in critical supply chains where the Bank’s strategic objectives can be met, including semiconductor manufacturing. The Bank are actively engaging with the sector and exploring market opportunities. UKIB has £22 billion of financial capacity.
Making chips isn’t cheap, and it takes a huge amount of energy. So, as well as unlocking new sources of funding, the British Industry Supercharger scheme will bring energy prices for eligible British chip makers in line with those in other major economies around the world.
Enterprise creation and scale-up
Full expensing
The Chancellor announced that full expensing – a 100% first-year allowance for main rate expenditure – and the associated 50% first-year allowance for special rate expenditure would be made permanent. This will deliver the largest business tax cut in modern British history and means the UK has the lowest headline corporation tax rate and most generous capital allowances in the G7.
This will enable businesses to invest in technology and the Office for Budget Responsibility says it will increase annual investment overall by around £3 billion a year and a total of £14 billion over the forecast period.
The overall impact of the Chancellor’s growth measures will increase business investment in the UK economy, by around £20 billion a year within a decade, nearly 1% of GDP at today’s level – the biggest ever boost for business investment in modern times, a decisive step towards closing the productivity gap with other major economies and the most effective way we can raise wages and living standards for every family in the country.
Spinouts
University spin-out companies play a hugely important role for the UK economy, with investment increasing almost five-fold since 2014. The independent review – led by Irene Tracey, Vice-Chancellor of Oxford University and Andrew Williamson, Managing Partner of Cambridge Innovation Capital – recommended innovation-friendly policies that universities and investors should adopt to make the UK the best place in the world to start a spin-out company. To capitalise on this strength, the government is accepting all the review’s recommendations and setting out how it will deliver them.
Several leading universities have endorsed the recommendations of the review, and the government will provide £20 million to foster more spin-out companies.
In the past, many spin-outs deals were created from scratch, which is both inefficient and sometimes fails to learn the lessons from previous success stories. Today’s recommendations aim to speed up the process and build on TenU’s University Spin-out Investment Terms Guide by recommending 10-25% university equity for life sciences spinouts, and 10% or less for less IP-intensive sectors, common in software. This will make it easier for investors to back companies, knowing the founders retain a significant stake in the company and its success.
Discovery Fellowship
To deliver against the government’s Science & Technology Superpower ambitions, the government is supporting the new Faraday Discovery Fellowship, which is intended to be backed by a £250 million endowment to the Royal Society.
This significant long-term investment in top research talent will support at least 30 leading mid-career scientists and researchers for up to ten years each, to conduct ground-breaking and discovery-based research in STEM in the UK. Prospective researchers will be able to apply via an application process that minimises bureaucracy.
Research projects will span a broad range of STEM subjects, which could include government priority science and technology areas such as Engineering Biology and Quantum, ensuring the UK remains at the cutting edge of scientific research.
This long-term endowment investment builds on the new £150 million Green Future Fellowship programme, announced recently by the government, which is intended to be delivered by the Royal Academy of Engineering.
Venture Capital skills fellowship programme
To further strengthen the UK’s renowned venture capital industry, the Chancellor has announced a £3 million fellowship programme scheme to develop a new generation of science and tech venture investors.
The scheme – which will be developed and piloted by the Department of Science, Innovation and Technology – aims to produce the next generation of world-leading investors capable of investing in the vanguard of science and tech – helping deliver breakthroughs in such things as vaccines, AI, and robots.
Places for up to 20 people currently working in venture capital will be available in the pilot scheme, which could be rolled out over subsequent years. The Fellowship will provide participants with the training and network to fast-track their careers within the venture capital industry to become leaders within their firms, with the potential to set up their own VC funds in the longer-term.
The programme follows a recommendation from the Prime Minister’s Council for Science and Technology and will complement the world-renowned Kauffman Fellowship in the US which has trained over 800 investors who manage funds worth over $1 trillion – helping to generate growth and drive innovation in the economy.
Battery Manufacturing
Alongside the Department for Business and Trade’s battery strategy, the Chancellor announced:
- £50 million for developing the UK’s battery world-class capabilities, from R&D to industrialisation.
- £11 million to fund collaborative R&D in battery development incorporating technologies such as AI.
Government’s response to the Research, Development and Innovation (RDI) organisational Landscape Review
The government has published its response to Sir Paul Nurse’s Review of the Research, Development and Innovation (RDI) Organisational Landscape. The response sets out ambitious actions the government is taking to evolve the landscape of organisations performing RDI in the UK to be more diverse, resilient and investable. This builds on progress already made since the publication of the Review, including the creation of the new Department for Science, Innovation and Technology and the publication of the Science and Technology Framework.
The response makes a wide range of commitments, such as: maximising the impact of public sector RDI organisations, for example by providing £25 million to provide core small and medium-scale research infrastructure; supporting RDI talent by, for example, establishing world-class Discovery Fellowships backed by a £250 million endowment; and making the UK a world-leader for philanthropic partnerships, demonstrated by the recently announced new consortium of philanthropic funders for UK Biobank. All of this will be underpinned by a data- and evidence-driven approach.
The actions announced in the response will help to drive national prosperity and create a system that is greater than the sum of its parts, spearheading the government’s ambitions to be a Science and Technology Superpower.
Skills
National Academy focussed on mathematical sciences
The government has consistently emphasised how essential it is to build mathematical capabilities in the UK and recognises the importance of providing support to this sector in a long-term and sustainable way.
We have seen the success that the existing National Academies have had over many years in supporting research in their disciplines.
The government will support the creation of a National Academy focussed on mathematical sciences. We will be engaging key stakeholders in the mathematical community on the best way to do so and will be providing further details of this engagement shortly. As part of our commitment to supporting this work, we are willing to back this initiative with up to £6 million of seed funding over the next three years, subject to business case.
Life Sciences
Life Sciences is a key strength of the UK economy, critical to our health, wealth and resilience. As part of the £4.5 billion unveiled by the Chancellor for strategic manufacturing sectors, the government has committed £520 million for life sciences manufacturing to build resilience for future health emergencies and capitalise on the UK’s world-leading research and development.
The Chancellor also announced that we are further backing UK innovation by investing £10 million, with an additional £10 million from Scottish Enterprise, in a world-class Oligonucleotides Manufacturing Innovation Centre of Excellence.
Further to this, the government is providing £51 million to the UK’s largest ever research study – Our Future Health – a world-leading resource for health research. This funding will support Our Future Health to recruit hundreds of thousands of new volunteers and to genotype the first 1 million participants, supporting the development of better ways to prevent, detect and treat diseases.
Regulation
Regulatory sandboxes
DSIT has launched regulatory sandboxes for telecommunications spectrum sharing, engineering biology, and space to support a pro-innovation approach to regulation and standards which stimulates demand for science and technology, attracting investment while representing UK values and safeguarding citizens.
Telecommunications: Spectrum Sharing – Radio frequency spectrum (spectrum) is the range of invisible electromagnetic waves that enable all wireless technology, from mobile phones, and Wi-Fi to aircraft navigation and satellite applications The Wireless Infrastructure Strategy and Spectrum Statement outlined that increased spectrum sharing will be a key feature of 5G, 6G and future networks. The spectrum sandboxes, facilitated through Ofcom’s sandbox framework, will test and demonstrate such sharing between networks, for example, between different private networks used on a localised basis such as in a factory, farm, transport hub or office. This will inform government and Ofcom on the role of more intensive spectrum sharing supported by appropriate authorisation models.
Engineering biology – Engineering biology is the design, scaling and commercialisation of biology-derived products and services that can transform sectors or produce existing products more sustainably. Earlier this year, DSIT established the Engineering Biology Regulators Network (EBRN) and will channel the insights from the call for evidence to guide the EBRN, ensuring the sandboxes effectively tackle the most pressing regulatory challenges faced by the industry.
Space – The government is currently undertaking a regulatory review due to conclude in March 2024. In collaboration with operators and the Civil Aviation Authority, the government will develop the regulatory sandbox and testbed initiatives. This will act as an enabler for both understanding the current regulatory environment and for developing detailed, mutually agreed guidance for these missions going forwards.
Space
Earth Observation investment
The Chancellor unveiled almost £47 million in funding this financial year to boost activity and innovation in the Earth observation sector as the UK re-enters Copernicus from January 2024.
With around 18% of UK GDP underpinned by satellite services, this fund will support businesses that provide and use Earth observation data, including small and medium enterprises, to explore new projects and bolster the economy.
Low-earth orbit satellite development
The Chancellor confirmed £15 million of calls are now open under the £60 million European Space Agency Advanced Research in Telecommunications Systems programme, allocated to the UK’s Connectivity in Low Earth Orbit scheme. This will fund the next generation of satellite communications development and boost the UK’s leadership in the ever-growing satellite market for the next 10-15 years.
It will support UK-based suppliers in developing the technologies needed to build the next generation of low Earth orbit satcom satellites, which are key to offering connectivity in remote and rural parts of UK, bridging the digital divide and levelling-up our country while growing the economy.