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ANALYSIS, ARTICLES

Technology Sovereignty: Why the UK Needs to Invest in & Protect Its Innovation

The UK has long been a powerhouse when it comes to technology. We have some of the best minds in the world working on everything from artificial intelligence to renewable energy. However, there are concerns that we could lose our edge – and our sovereignty – if we don’t take steps now to secure our future in the tech industry.

The COVID-19 pandemic revealed what happens when a country does not have access to technology or the manufacturing abilities to produce necessary supplies. From mask shortages to importing problems, many nations realized that they no longer had complete technology sovereignty.

The term ‘Technology Sovereignty has become widely used. What does it mean?

One man who is urging the government to take this seriously is entrepreneur and investor Jörg Hauser. In this article, I’ll take a look at his argument and explore why he feels so strongly about the issue.

In evidence to a UK Parliamentary Committee Hauser wrote:

“Technology Sovereignty is fast becoming the defining issue of the decade. Countries used to perceive sovereignty mainly in terms of defending its borders. Given the importance of our IT infrastructure which is correctly compared with our water and electricity infrastructure, it clearly relates to national security as well as the basic functioning of our society. Microprocessors are clearly a key component of our IT infrastructure. I believe every country has to ask itself 3 questions when it comes to Technology Sovereignty:

  1. Do we have the critical technology in our nation.
  2. If not, do we have several suppliers from different stable reliable countries.
  3. If still not, do we have unfettered guaranteed long-term (at least 5 years) access to monopoly or oligopoly suppliers from a single country (often US or China)

If the answer to all three of them is NO, we have to act and do WHATEVER IT TAKES until the answer to one of them is YES. If we do not than we must be comfortable with the fact that we become dependent on another nation, however friendly at present, who can determine whether we have the right to use our own IT infrastructure or not. Would we allow this to happen to our water or electricity infrastructure? Probably not.”

Before we ask the first question posed by Hauser we need to define what we mean by ‘critical technology’.

The first step is to analyze whether a technology is currently critical, meaning indispensable (or will be critical in the future) and why, and to what extent access to it could be threatened by external shocks.

There are many factors to consider when determining whether a technology is critical. Here are some key questions to ask:

  1. What are the benefits of the technology?
  2. How difficult is it to replace or substitute the technology?
  3. What are the costs of losing access to the technology?
  4. How important is timing when it comes to accessing the technology?
  5. How dependent are we on other countries for the technology?
  6. Are there any security implications associated with the technology?
  7. What are the ethical implications of using the technology?

These factors will help us to determine whether a technology is critical and, if so, why.

A different, but also highly relevant question, is to ask in which current and future economic growth sectors the UK wants to have a significant share of the value generated throughout the value chain. The answer to this question provides a more strategic rationale for focusing on specific technologies.

Some of the sectors where the UK has a competitive advantage and could be a world leader are:

  1. Financial technology
  2. Cyber security
  3. Artificial intelligence
  4. Data Analytics
  5. Food and Agriculture
  6. Health care
  7. Clean energy
  8. Connected and autonomous vehicles
  9. Blockchain technology
  10. The Internet of Things

The second step is to develop a range of policy options to mitigate risks and increase the resilience of our critical technologies. For this, we need to set priorities.

What are the most critical technologies for the UK? And what are the most pressing threats to our access to them?

  1. Microprocessors
  2. 5G
  3. Artificial intelligence
  4. Quantum computing
  5. Biotechnology

These are just a few examples of critical technologies which I believe we must set as priorities. The list is not exhaustive and will undoubtedly change over time as new technologies emerge and become increasingly important. At one time the Japanese had a Base Technologies Project which sought to identify areas in which dominance or influence should be sought. The UK should consider a similar approach.

Hauser argues that the UK needs to start investing heavily in its own tech industry if it wants to maintain its position as a world leader. He points to China as an example of a country that is already doing this. “China has a clear plan to dominate the world in AI and other key technologies,” he said. “If we don’t match their ambition and investment, we will be left behind.”

What else should the UK do to ensure it remains a leading force in the tech industry?

  1. Increase investment in research and development: The UK government needs to increase its investment in research and development (R&D) if it wants the country to remain competitive in the global tech industry. Currently, the UK spends around 1.7% of its GDP on R&D, which is lower than the average for developed countries (2.4%).
  2. Create more incentives for businesses to invest in R&D: The government also needs to create more incentives for businesses to invest in R&D. This could include tax breaks or subsidies for companies that are undertaking R&D activities.
  3. Attract and retain talent: The UK must continue to attract and retain top talent from around the world. This includes both highly skilled workers and entrepreneurs. The UK’s immigration policies will play a key role in this.
  4. Foster a culture of innovation: The UK needs to foster a culture of innovation and creativity if it wants to remain a leading force in the tech industry. This means supporting startups and small businesses, as well as encouraging larger companies to innovate.
  5. Invest in infrastructure: The UK needs to invest in its infrastructure. This includes both physical infrastructure (e.g. broadband) and digital infrastructure (e.g. data centres).
  6. Invest in education: The UK must strive to spread the skills and knowledge needed in key sectors amongst our domestic population. Education is the backbone of any society. It helps to create knowledgeable, skilled citizens who can contribute to the growth and development of their country. In the UK, education is highly valued and considered to be a fundamental right. As a result, the government invests heavily in education, ensuring that all children have access to quality schooling. This commitment to education has helped to make the UK one of the world’s leading economies, and it has also played a role in shaping the country’s technology sovereignty. The UK’s world-class universities produce some of the most innovative thinkers in the world, and many of these thinkers go on to develop new technologies that are used all over the world. In addition, the UK’s strong research and development sector helps to ensure that new technologies are constantly being created and improved upon. All of this makes it clear that education is vital to the UK’sstatus as a leading technology nation.
  7. Protect key companies from being bought by overseas concerns. The UK has a woeful history so far on this.
  8. Work closely with trade unions, academics, and the wider civil society to identify key companies for investment and legal protection and develop a Technology Sovereignty strategy.
  9. Support the growth of the UK tech industry: The government needs to support the growth of the UK tech industry through policies and regulations that encourage innovation and investment.

Technology sovereignty is a complex issue, but it is one that the UK cannot afford to ignore. I hope that I’ve given you some of the key reasons why it is important for the UK to maintain technology sovereignty. First, it ensures that critical infrastructure and data are protected from outside threats. For example, if a country’s power grid is controlled by a foreign company, that country is essentially at the mercy of that company. If the company decides to cut off the power, the country would be in a very difficult situation. Second, technology sovereignty helps to create jobs and spur economic growth. When critical technologies are developed domestically, it creates opportunities for local companies to grow and thrive. This in turn leads to more jobs and more money circulating within the economy. Finally, technology sovereignty helps to ensure that a country is not reliant on other countries for its critical technologies. This is especially important in times of geopolitical tension or conflict. If a country has its own critical technologies, it can still function even if other countries are cut off. For these reasons, technology sovereignty is an important concept for countries to protect their key companies.

I hope I’ve also indicated some of the measures our country can take to maintain our Technology Sovereignty. By taking steps to increase investment in R&D and education, attract and retain top talent, foster a culture of innovation, and invest in infrastructure, the UK can ensure that it remains at the forefront of the global tech industry.

It’s time for the UK to start investing in its future.

By Patrick Harrington as part of our Future State series

Do you agree with this article? Should the UK be doing more to secure its place in the tech industry and not become overreliant on other nations? Let us know your thoughts in the comments below!

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