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Home / News and Insights / Insights / Spring Budget 2023: creating an environment for AI innovation to thrive

This article was first published in Tech+, a newsletter from our tech and innovation team designed to help readers unpack complex topics in the tech space and keep up-to-date with the changes across this rapidly evolving sector. Be the first to receive the next edition and subscribe here.

In the Spring Budget statement earlier this month, the government made a public pledge to lead on the regulation of artificial intelligence and on the future of Web 3 technology. As a result, steps to support the UK’s AI industry were at the forefront of the Budget, which contained several announcements designed to maximise the potential of Web3 and to boost growth and innovation across the sector.

In this article, we outline the plans contained in the Budget including increased research and development funding, training programmes, investment initiatives and improvements to connectivity – measures intended to create an environment in which AI can thrive.

Investment in innovation

Chancellor Jeremy Hunt has previously declared his ambition for the UK to become a ‘science and technology superpower’ in his keynote speech to business leaders at the World Economic Forum earlier this year.

In line with this, Hunt’s Budget announced the creation of 12 investment zones set to further boost the UK’s tech credentials. With four Zones spread across Scotland, Wales and Northern Ireland, and eight announced around research institutions in the East Midlands, Greater Manchester, Liverpool, North East, South Yorkshire, Tees Valley, West Midlands and West Yorkshire, each English Investment Zone will have access to interventions worth £80 million over five years.

Supporting businesses

Additional initiatives designed to encourage research and investment were launched including an ‘AI Sandbox’ which will encourage AI research and serve as a space for innovators to trial tools, models and systems to ensure more efficient approaches to getting ‘cutting edge’ products to market for AI businesses.

Further, as part of the drive to maximise the potential of AI, £900 million is set to be invested in creating a cutting edge ‘exascale supercomputer’ which it is hoped will help researchers with AI and climate change. Quantum computing was also on the agenda, with £2.5 billion earmarked towards advancing quantum technologies over the next decade. The government’s Quantum Strategy sets out a research programme with four goals, namely:

‘ensuring the UK is home to world-leading quantum science and engineering; supporting businesses through innovation funding opportunities and by providing access to world-leading R&D facilities; driving the use of quantum technologies in the UK; and creating a national and international regulatory framework.’

Although not specific to the AI industry, other relevant announcements in the Spring Budget include aims to solidify the UK’s reputation as one of the best places in the world to invest and launch a business by ‘creating the right conditions for Enterprise… based on competitive taxes, access to capital and smarter regulation.’ It is hoped that such measures will act as a draw for entrepreneurs and boost growth in the long-term.

Skills and training

The statement also included measures aimed at developing the expertise necessary to support the growth of emerging technologies, including an extra £100 million for a series of initiatives designed to support the development of digital and technical skills including the ‘Innovation Accelerators’ programme.

Improving regulation

While all these measures doubtless sound promising, the government has much work to do to ensure that data protection and privacy regulations keep pace with technological developments.

To hear more from our Tech team, visit the Technology and Innovation webpage.

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