As part of London Tech Week 2022, Tim Ryan, head of DAC Beachcroft’s national technology and media practice, joined a techUK panel entitled The UK Innovation Strategy one year on – are we winning the global race for tech Innovation? Together with fellow panellists from Cisco, BT and BVCA, Tim discussed the exciting progress we have seen in the tech sector over the last year, as well as challenges which still remain.
This article sets out a brief summary of the Strategy, together with commentary on what the future may hold for tech businesses and innovation in the UK.
Why is the Government keen to prioritise technology innovation?
According to Government, the UK is experiencing an exceptionally critical period regarding technological advancements. Several factors have contributed to a sense of urgency in terms of prioritising innovation, which the Strategy defines as “the creation and application of new knowledge” in the interests of prosperity, productivity, and wellbeing.
These factors include Brexit, the COVID-19 pandemic, and increased global competition for technological advancement, as well as rapid transformative industrial change through disruptive technologies such as quantum technology and artificial intelligence.
What types of challenges face UK technology businesses today?
The Strategy notes that several fundamental issues, many of which are shared by other nations, pose challenges to tech innovation. These include workforce skills gaps in STEM fields, as well as “brain drain” suffered when talent moves abroad. Likewise, the UK’s current regulatory system may in certain scenarios favour incumbent businesses over innovative new entrants. Additionally, limited access to proper financial investment as well as insufficient professional (including legal) advice can also hamper progress.
To address the challenges noted above, what policy areas are a priority?
The Strategy sets out four key objectives, or “pillars”, and it is through these pillars that Government aims to establish the right underlying policy environment, as well as the appropriate balance as between public and private sector leadership. If delivered, these pillars will help the UK to become as a global hub for innovation:
- Pillar 1: Unleashing Business – to fuel innovative UK businesses, for example by improving financing opportunities, infrastructure, and pro-innovation regulation.
- Pillar 2: People – to make the UK an attractive place for talent to live and work, through new skills and training programmes as well as reformed visa routes.
- Pillar 3: Institutions and Places – to ensure research, development and innovation institutions serve the needs of businesses, by way of enhanced R&D financing and other support.
- Pillar 4: Missions and Technologies – to tackle major challenges faced by the UK and the world, for example climate change and access to healthcare, and drive capability in key technologies.
With regard to “Unleashing Business” (Pillar 1) in particular, what are the key action points?
Developing a world-leading ecosystem would, according to Government, encourage and enable UK businesses innovation: a key element of this ambition is ensuring that new technologies get to market in an efficient way. The Strategy makes clear that to accomplish this goal, access to support should be simplified and bureaucracy should be minimised, so that good ideas can be successfully leveraged and commercialised.
This requires action in a wide variety of areas and sectors, including in respect of financing opportunities and public investment in R&D. Recent progress in this area includes the launch of the Finance Hub through the British Business Bank, the Government-owned business development bank.
Other objectives include new investment in infrastructure, reform of regulatory regimes and competition laws, as well as improved safeguarding of intellectual property. Likewise, government procurement processes, public sector innovation, and international trade policies are also high on the priority list for reform.
Insights from DAC Beachcroft’s technology and media practice
DACB’s technology and media team serves clients nationally and internationally, ranging from multi-national companies and Government departments to fast-growth and scaling technology companies. Often, we sit alongside our clients from the inception of an idea, all the way through to its eventual roll-out, whether at enterprise or scaling level. An instrumental part of our practice, therefore, is not only understanding the technology that sits behind our clients’ businesses, but the laws, policies and commercial drivers which influence the innovation process from research through to commercialisation.
Naturally, Government policies and legislation play a critical role to mitigate risks associated with new products and services. For example, new medical devices must be safe for consumers, and financial technology apps must adhere to data protection laws, amongst other things. But when considering how best to create and sustain an environment that encourages technology innovation, balance is key. This requires open communication between policy makers and industry, and a willingness to explore new options together.
The regulatory ‘sandboxes’ set up by the Information Commissioner’s Office (ICO) and the Financial Conduct Authority (FCA) are good examples of how businesses can test innovative ideas within a safe environment, all the while informing regulators of how technologies could be used in practice. Looking forward, we are particularly excited to see Government establishing a Cryptoasset Engagement Group to work more closely with the industry on how best to regulate cryptocurrencies and assets such as NFTs, in respect of which we advise a range of clients.
By way of further example, our experience in advising the NHS throughout the COVID-19 pandemic made it clear that UK tech companies can play an essential part in protecting public health, as well as stimulating the economy. The private sector was fully engaged in Government’s response to COVID-19, enabling the Vaccine Taskforce and other departments to leverage enormous experience and capability. Such collaboration also provides businesses with new knowledge and skills, which can then be redeployed into the private sector.
Ultimately, research, development, and innovation should be viewed and valued as a critical national asset. And, in order to build a sustainable innovation ecosystem which can support businesses of the future, UK Government, academia, and industry must work together.
You can download a copy of The UK Innovation Strategy: leading the future by creating it from the gov.uk website, here.
DAC Beachcroft’s team of specialist technology and media lawyers is one of the largest in the United Kingdom. Our work ranges from assisting scaling technology businesses with fundraising to large-scale outsourcing contracts for international corporates, as well as specialist business advisory work for cryptocurrency, health technology, digital media, and A.I. businesses.
To discuss this article or to obtain more information on DAC Beachcroft’s technology practice, please contact Tim Ryan at firstname.lastname@example.org.