Chancellor Jeremy Hunt has revealed that the UK plans to invest £500m over the next two years into universities, sciences, and innovation centres to drive growth in AI and tech sectors.
Scientific advancements are pivotal in driving sustained growth, enhancing lives, and addressing societal issues. The UK, home to numerous top-tier universities, already stands out for providing the highest proportion of GDP support for business Research and Development (R&D) in the OECD, through both tax incentives and public funding. Building on this foundation, the government is taking additional steps to maintain the UK’s position as a leader in science, innovation, and technology.
University spinouts, recognised as some of the UK’s most innovative firms, significantly contribute to the national economy, with their investment surging by nearly five times since 2014. In a move to further leverage this area of strength, the government is embracing all suggestions from the Independent Review of Spinouts and detailing its implementation plans. Numerous universities and investors have already supported the review’s proposals. To aid aspiring founders in the UK’s universities in showcasing the commercial viability of their research, the government is allocating £20 million towards a novel cross-disciplinary proof-of-concept research funding scheme.
The government is also bolstering employer-led training in England, enabling adults of all ages to engage in high-quality apprenticeships. This initiative has redefined apprenticeships, positioning them as a superior alternative to traditional higher education routes. In the 2021-22 period, approximately one-third of all apprenticeship starts were at Level 4 or higher, a significant increase from just 4% in the 2014-15 period.
The government remains committed to collaborating with businesses to enhance the apprenticeship system, ensuring it aligns with the requirements of learners, employers, and training providers. Supporting initiatives to boost growth sectors, the government is allocating £50 million towards a two-year apprenticeship pilot. This programme aims to investigate methods for fostering training in these key sectors and tackling obstacles that hinder access to high-value standards.
Dr Hilary Leevers, Chief Executive, Engineering UK, said: “The chancellor highlighted the importance of skills in his autumn statement, yet there was little to address widespread issues in the skills systems. We welcome the modest announcement of £50 million for engineering apprenticeships but are concerned that this is limited to a two-year pilot to explore ways to stimulate training in these sectors and address barriers to entry in high-value standards.
“As outlined in our recent report ‘Fit for the Future’, we need large scale investment in getting more apprenticeships for young people off the ground now and to ensure that the country has the engineering and technology workforce it needs for the future. We urge the government to take a bolder approach.”
Alexia Pedersen, VP EMEA at O’Reilly, said: “Amidst ongoing economic challenges, the government’s budget plans to stimulate job creation and economic growth are essential. Alongside these measures, the critical importance of upskilling and providing support to individuals returning to the workforce, equipping them with the necessary skills for the digital era cannot be overlooked. The talent gap between available jobs and required skills has been widely discussed, highlighting the need for government intervention to invest in ongoing education and upskilling programmes in emerging technologies such as cloud computing, artificial intelligence, and cybersecurity.
“The government needs to prioritise education when outlining measures to alleviate day-to-day living costs. Investing in the future economy means investing in the people and knowledge that drive innovation. By facilitating the transition from benefits to employment through the ‘Back to Work Plan’, we can strengthen the job market and foster sustained growth.
“Strengthening the connection between businesses, individuals, and education is crucial to fostering a lifelong learning and development culture. By providing individuals with hands-on experience through partnerships with businesses, we can reap greater long-term benefits for the job market.”
IET Head of Policy Stephanie Baxter said: “It is very welcome that the Government has recognised the importance of engineering apprenticeships to filling critical skill gaps in the UK innovation and technology sector.
“In addition to the £50m investment through the Apprenticeship Growth Sector Pilot announced in the Autumn Statement, engineering employers say they need agility within the fund for upskilling and reskilling to allow their workforce to be agile and adaptive to new technologies such as AI and Digital Twins.
“The Institution of Engineering and Technology is therefore calling on Government to allow employers to use unspent levy funding to provide short tailored courses (micro-credentials) in cutting edge technologies.
“It is also important that the Chancellor has committed to wider infrastructure investment to support the UK meet its net zero targets. However, manufacturers in the UK are facing critical skill shortages in the face of rapid technological advancement: 21% report skill shortages in adapting to new equipment. This hinders our ability to harness digitalisation and new technologies for innovation. Therefore, government must ensure that the investment addresses these skill gaps to gain maximum benefit from the investment.”
Professor Sir Jim McDonald FREng FRSE, President of the Royal Academy of Engineering, says: “Engineering harnesses the power of science and technology to benefit people and the economy, generating the jobs of the future. I am pleased that the Chancellor has recognised this in his Autumn Statement, introducing measures to support research and innovation and to help grow more spinout companies based on the world-leading work being done in UK universities. Just nine universities have hosted more than half the UKs spinouts over the last decade, so it is vital that we streamline the process and help promising new companies to scale up and grow right across the UK.
“Investment and support are essential if the government is to realise its ambition of securing strategic advantage through emerging technologies, from AI, telecoms and semiconductors to engineering biology and quantum.
“However, our strategic advantage in research can only be translated into tangible economic benefits through real products and services and I commend the Chancellor’s support for advanced manufacturing, including the development of green industry, together with targeted regional investment.
“Engineering expertise is crucial to our nation in addressing the most pressing global challenges through rigorous engineering system thinking and fostering innovation. Training future engineers is therefore vital to the economy and I am delighted to see funding to help increase the number of engineering apprentices.
“Earlier this year the government set out an ambitious science and technology framework for the UK. We are seeing some progress on this agenda but it is a long-term and wide ranging endeavour that needs sustained effort and funding over the coming years.”