AI and experiments – let’s make 2018 Britain’s year of innovation
It has been a rather frustrating year for those interested in hearing from the government on a long-term vision for the British economy.
With most of the year dominated by Brexit negotiations – plus a mid-year pause for a surprise election – it took 11 months for a roadmap for UK growth to be set out, let alone an earnest start to the journey.
But there have been glimmers of hope. The launch last month of the UK’s industrial strategy had a crucial emphasis on innovation. It set an ambitious 2.4 per cent of GDP target for UK R&D investment within 10 years, backed up by substantially increased government spending.
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It also set out to address two of the UK’s most important underlying issues: tackling its poor productivity, and making a renewed commitment to an overhaul of skills provision, based on lifelong learning and preparing the workforce for the jobs of the future.
The first four sector deals for the UK’s industries were also announced. At the start of 2017, business minister Greg Clark’s solution to the pitfalls of picking sectors to prioritise in his industrial strategy was a new “open door” policy – a challenge to the UK’s industries to come together with specific requests of the government.
But it appears this approach is still giving preference to sectors that are established, defined, and well organised: life sciences, automotive, and construction.
The open door hasn’t yet reaped significant dividends for less established sectors, like tech, creative industries, and digital. A sector deal on artificial intelligence (AI) suggests that a different approach may be in the pipeline – one which could really get an effective support package in place for emerging, and fast-developing sectors.
So what should come next in 2018?
The focus on increased investment in innovation is an excellent starting point. But there is plenty of detail to work out.
Part of the solution to low productivity must involve raising the amount that UK businesses spend on R&D. Essential to this will be understanding what inhibits the diffusion of innovation from firms at the innovation frontier to others.
In other words, what can be done to encourage “ordinary” firms to implement innovations which are already in the market, but are not yet being used to boost productivity?
For AI, there’s a lot to build on – an investment in data skills, a government office for AI to offer coordination support, and a Centre for Data Ethics and Innovation. A new Regulators’ Pioneer Fund should help the UK capitalise on its strengths by helping regulators dealing with the swift-moving development of tech like AI, and its impact on consumers and the public.
But the key will be how these new institutions work together, along with the private sector, to create a world-leading environment for businesses, while also promoting ethical decisions about the use of AI.
Developing the pipeline of skills for these jobs in sectors like AI should feature heavily next year. Nesta research shows that the UK will need more workers with science, technology, engineering and maths (STEM) skills, but it also strongly points to the importance of creativity and the arts.
Nesta research also suggests that solely focusing on growing the STEM workforce will lead to future skills gaps in other critical areas, such as problem-solving and strong interpersonal skills.
A siloed education system which develops scientific capabilities at the expense of a broader range of innovation skills is unlikely to meet employers’ future needs.
Innovation inevitably involves risk, trying out new ideas, and then learning from failure. One way of mitigating this is by taking an experimental approach to policy and practical programmes, testing out new initiatives and rapidly evaluating them, then scaling up those that are working and acknowledging when they are not.
Of course, this is not easy for governments with one eye on public acceptance of innovation, and its potential drawbacks.
However, Nesta research has shown that the majority of the UK population is positive about innovation, and in particular the societal benefits that it can bring.
Our research indicated strong support for public spending on innovation, with 70 per cent of the population rating the UK’s level of spending as about right or too little.
In 2018, it would be great to see the start of an honest conversation – including risks and tradeoffs – about the country’s future, aiming to engage and excite a much wider section of the UK’s population.
This year saw a fledgling start to building the UK’s new industrial strategy, but it’s time to harness the urgency of our imminent departure from the EU.
Our government and businesses must act together, with the public’s involvement, to grow our economy through investment in innovation.
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