It’s over sixty years since the then soon-to-be Labour Prime Minister Harold Wilson promised that the UK would be transformed by the ‘white heat of technology’. While Sir Keir Starmer did not quite embrace tech as a campaigning message in the same way, there is no doubt that technology will transform the country whatever his government does.
What can we expect? What should the government do? And how can the tech sector take advantage of the opportunities a new government presents? We heard from tech leaders to get their views.
Brace for regulation
The new government clearly disagrees with Rishi Sunak’s comment that now is not the time for AI regulation, and is planning a Regulatory Innovation Office. “Labour’s promise to introduce ‘binding regulation’ for AI safety will create ripple effects across the UK private and public sectors,” said Eduardo Crespo, EMEA VP of AI-powered operations platform PagerDuty. “
Crespo highlighted that more than half of IT leaders had reported an increase in incidents caused by ‘bad AI’. “Organisations leaning on these emerging technologies will have to scrutinise their AI strategy here and now,” he added.
The introduction of new regulation will mean that many in the workforce will require additional training to meet the requirements imposed on them.
Nikolaz Foucaud, Managing Director EMEA at training platform Coursera, says that the changes require “a concerted effort across industry and government to nurture digital skills, to ensure that the British workforce is conversant with the technology that it is regulating and leveraging.”
Regulation of AI does not stop it from providing benefits, however. Foucaud continued, “there is much optimism that generative AI will catalyse a productivity increase, with early research suggesting that AI skills can have outsized benefits for less productive workers.” Providing the high-quality training is a core component to realising those benefits, he said the government’s “AI strategy must therefore emphasise skills as much as safety.”
Unlocking the future: an innovation boom
Phil Burr, the head of product at Lumai, also highlighted the UK’s potential as a leader in AI. “We need to nurture the UK’s exceptional AI talent,” he said. “This involves leveraging our many world-leading education institutions to encourage education on AI and help to further develop the next generation of talent.”
Burr feels there are opportunities for AI across a range of business sectors, but to support this, the “new government needs to provide an environment which continues to foster startups and scaleups across both hardware and software,” he said. But he was optimistic about the potential, “the UK has the capability of creating world-leading hardware companies that enable AI in the most energy-efficient way.”
New government, new opportunities
The government has long played a key role in developing businesses through policy and, often, with more direct financial support. Simon Wax, a partner in the Tech and Media team at accountants Buzzacott, pointed out that the new government made several promises, including not just new trade deals, but also of investment in clean and environmental tech and R&D.
Those promises were met by a positive reaction from the markets, he said. “The market reaction to the new Labour government has been very positive. This is in part due to Labour’s promise of fiscal prudence that they preached throughout their election campaign.”
That positivity was echoed by Dale Peters, Senior Research Director at TechMarketView. “Technology will play a key role in the new government’s reforms, which will create opportunities for software and IT services suppliers,” he said. However, he added a caveat: “As we discussed in our latest UK SITS Market Trends & Forecasts 2024 report, any eagerness to transform is likely to be held back by the 3Cs of Caution, Concern, and Complexity.”
Buzzacott’s Wax also sounded a note of caution. A new government might present new opportunities, but that does not mean they need to be taken. “Every business is different,” he said. “My advice to tech founders seeking investment is first to consider why they need the investment in the first place. Is it to grow faster, fund their cash burn, or simply because funds are available?”
Stable but transformative
In practice, it might not be the new government’s tech policy that really makes the difference. Although ambitious government plans for AI regulation, skills, and innovation may be welcome, many will value the stability offered by a new government.
However, although the new government may mean an end to the political dramas of the past few years, it has inherited other difficulties. “Labour has highlighted the importance of private-sector investment, strong industry partnerships, and creating the right conditions for innovation as being key to building a stronger economy,” said TechMarketView’s Peters, before adding that not everything was positive. “It is clear the new UK government is facing an immensely challenging economic backdrop, which will necessitate tough budgetary decisions later this year.”
