If the level of capital flowing into the financial technology sector is any indication, the growth in number and size of financial technology start-ups cannot be denied. According to a report by KPMG, global investment in fintech companies reached US $57.9 billion by mid-year of 2018, already exceeding the total investment figures of 2017.
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Advances in technology and changing business models are transforming the global economy across all industry sectors. The measures announced by the Chancellor in Monday’s Budget Speech showcase how the UK Government is seeking to embrace innovation and new and emerging technologies, to ensure the UK’s position as a leader in our evolving digital landscape.
In this bulletin we set out some of the key highlights from the Budget from a technology and digital perspective.
A vision for an economy driven by research and innovation
The Budget is stated to set out “a vision for an economy driven by research and innovation”. In particular:
- The Chancellor announced a further £1.6 billion investment for R&D funding; with £1.1 billion providing additional funding to support the Industrial Strategy Grand Challenges and secure the “UK’s position as a world leader in new and emerging technologies such as artificial intelligence, nuclear fusion and quantum computing”.
- The Government is also seeking to ensure businesses and consumers continue to benefit from these new technologies, including by asking Jason Furman, US President Barak Obama’s chief economic adviser, to lead a review of competition in the digital economy.
- These efforts are further supported by the Government’s Modern Industrial Strategy; a key component of which is the National Productivity Investment Fund (NPIF), established in 2016 to provide additional capital investment in areas critical to productivity – namely digital infrastructure, R&D, housing and transport. The Budget extends the NPIF by an extra year to 2023-2024 and increases the fund to £37 billion.
- The Budget sets out next steps for the rollout of full fibre broadband nationwide, which will see funding for fibre and 5G increase incrementally from £25 million in 2017-2018 up to £290 million in 2023 – 2024 through the NPIF.
- The Government also proposes investments totalling £150 million in global artificial intelligence and future talent fellowships.