Budget 2023: Tech investment, supercomputers and AI

Chancellor of the Exchequer Jeremy Hunt has delivered his budget during a spring statement to the House of Commons and as expected it delivered a number of announcements affecting the tech community.

The main takeaway was the creation of 12 ‘investment zones’ designed to encourage innovation and growth in five key sectors including digital, tech and advanced manufacturing. 

Backed by £80m of funding, the zones will offer five-year tax incentives and resource spending based on the ‘opportunities of each cluster.’ 

Eight of the zones will be in England and the other four in Scotland, Wales and Northern Ireland with a number of mayoral areas already outlined as holding potential for investment zones including the East Midlands, Greater Manchester, Liverpool, North East, South Yorkshire, Tees Valley, West Midlands, and West Yorkshire. 

The treasury policy offer paper says: ‘Investment Zones must be founded on long-term partnership and collaboration – between local actors in a place, and between central and local government – to maximise the impact of coordinated investment and intervention.’ 

Another opportunity for digital businesses was outlined in the chancellor’s new investment allowance which allows businesses to deduct every pound invested in IT equipment from profits (as well as plant or machinery equipment), which the Office for Budget Responsibility says will increase budget investment by 3%. 

Direct investment into emerging tech was also announced in the budget with a new annual £1m prize for the British company that produces the best AI research to help make the UK a better place for investment into the technology. 

This falls in line with previous ambitions set by the Department for Science, Innovation and Technology and Prime Minister Rishi Sunak who has previously announced a goal of attracting the world’s top 100 AI talents to the UK, though has yet to clarify how this will be done. 

The new annual ‘Manchester Prize’ is part of an overall push to AI which will include an ‘AI sandbox’ to trial new ways of promoting investment alongside accepting the recommendations of a survey by Chief Scientific Adviser and National Technology Adviser Sir Patrick Vallance. 

Other announcements include a £900m investment into a new supercomputer facility in the UK with the Chancellor saying: ‘Because AI needs computing horsepower I today commit around £900m to implement the recommendations of the independent future of compute review. 

A rumoured £2.5bn investment into quantum computing in the country was also part of the investment into the tech industry.

Photo: UK Parliament (CC BY 3.0)