Budget 2018: New technologies and innovation

Building on the government’s long-term commitment to R&D, and the Industrial Strategy ambition to raise total R&D investment to 2.4% of GDP by 2027, the Budget includes significant additional support for cutting-edge science and technologies that will transform the economy, create highly skilled jobs, and boost living standards across the UK.

Long-term support for research and development – The Budget allocates £1.6 billion to strengthen the UK’s global leadership in science and innovation. This reinforces the UK’s commitment to a strong environment for international scientific collaboration. Since 2016, the government has invested an additional £7 billion in research and development, the largest increase to R&D in 40 years.⁷⁵

Industrial Strategy Challenge Fund – As part of this investment in R&D, the government will increase the Industrial Strategy Challenge Fund by £1.1 billion, supporting technologies of the future. This includes:

• Up to £121 million for Made Smarter to support the transformation of manufacturing through digitally-enabled technologies, such as the Internet of Things and virtual reality

• Up to £78 million for the Stephenson Challenge, supporting innovation in electric motor technology, making vehicles lighter and more efficient than ever before

Quantum technologies – The government will invest a further £235 million to support the development and commercialisation of quantum technologies, including up to £70 million from the Industrial Strategy Challenge Fund, and £35 million to support a new national quantum computing centre. These technologies will transform capabilities in computing, sensing and communications, bringing promising new approaches to solving global problems such as disease and climate change. This investment is in addition to the government’s recent £80 million extension of the Quantum Technology Hubs and takes overall funding for the second phase of the UK’s world-leading National Quantum Technology Programme to £315 million. (32)

Nuclear fusion – To maintain UK leadership in nuclear fusion and support the government’s Clean Growth Grand Challenge, the Budget announces an additional £20 million in 2019-20 for the UK Atomic Energy Agency to accelerate its ground-breaking work on the development and commercialisation of fusion technologies. (31)

Artificial Intelligence and data-driven innovation – The government has already taken action to ensure the UK is at the forefront of emerging digital technologies, including through the Industrial Strategy Artificial Intelligence (AI) and Data Grand Challenge, and an AI sector deal of up to £950 million. The Budget sets out the following next steps:

• the Office for AI and Government Digital Service (GDS) will review how government can use AI, automation and data in new ways to drive public sector productivity and wider economic benefits. This will feed into the innovation strategy being led by the Cabinet Office

• the Data Science Campus at the ONS and the GDS will conduct an audit of data science capability across the public sector, to make sure the UK public sector can realise the maximum benefits from data 

• the government established the UK’s pioneering Centre for Data Ethics and Innovation to ensure that people have confidence in how data and technologies, such as AI, are used. The Budget announces that the Centre has been commissioned to study the use of data in shaping people’s online experiences, and the potential for bias in decisions made using algorithms

Global AI and future talent fellowships – To attract, retain and develop world-leading research talent, the government will invest up to £50 million in new Turing AIFellowships to bring the best global researchers in AI to the UK, and £100 million in an international fellowship scheme.

Catapults – To support entrepreneurs and businesses to access and adopt cutting‑edge technologies, the government is confirming £115 million to extend funding for the Digital Catapult, which has centres in the North East, South East and Northern Ireland, and the Medicines Discovery Catapult in Cheshire. This builds on the £1 billion in long-term funding already committed to the broader network of Catapult centres located across the UK.

Distributed Ledger Technology Field Labs – Distributed ledger technologies (DLT), such as blockchain, could revolutionise how information is recorded, protected, stored and shared, transforming financial markets, supply chains and public services. To test their potential, the Digital Catapult will run a series of DLT Field Labs, working with businesses, investors, and regulators in a range of areas, including in construction and the management of goods in ports. 

Cryptoassets Taskforce – The Cryptoassets Taskforce was launched at the International Fintech Conference in March 2018. Following extensive work by HM Treasury, the Financial Conduct Authority (FCA) and the Bank of England, the Cryptoassets Taskforce report will be published alongside the Budget. The report will set out the UK’s approach to cryptoassets and distributed ledger technologies in financial services, including actions that will allow innovators to thrive and the benefits of these new technologies to be realised while at the same time mitigating the risks that arise from cryptoassets. This will ensure the UK maintains its international reputation as a financial services centre with high regulatory standards. 

Science and innovation at the heart of government – To stimulate the use of cutting-edge science and innovation in government, the Budget announces a new £50 million per year fund designed to address the most pressing challenges in areas such as public health and cyber security. The fund will focus on joint programmes between government and industry, and will begin in 2021-22.

Supporting innovation across the country – The government will invest an additional £120 million through the Strength in Places Fund. This will support clusters of science and innovation excellence across the UK and enable them to further develop their strengths. This funding extends the existing programme until 2021-22.