Wednesday, 15 July 2015

Government Announces New Investments in the Digital Economy

The Government has announced plans to invest some £45 million in improving the lives of UK citizens through digital research and technology.  The investment will be made by way of numerous research centres located throughout the UK.  The Engineering and Physical Services Research Council will provide £23 million of funding; the remaining £22 million will come from other government agencies.

Universities and Science Minister Jo Johnson made the announcement on the heels of Chancellor George Osborne's commitment in the summer Budget announcement to invest more in the digital economy.  Part of Osborne's plan includes the newly announced Digital Transformation Plan, which will provide an overall framework for the government's investment in the digital sector.

Funding for the new research centres will go to University College London and Bath, Newcastle, Nottingham, Swansea and York universities. It is hoped that the funding will help the research centres attract attention from partners willing to contribute investments of their own.  The research will cover everything from managed services to education to entertainment.

Some projects specifically mentioned by Johnson include:

data refinement for use in personal products
open source initiatives to meet the needs of government services
motion capture technology for medical and athletic purposes
game development to improve educational outcomes.

It appears as though the investment will go well beyond simple hardware and IT services for business.  The government aims to invest in a broad range of initiatives that it hopes will improve the economy, the culture, and the entire social structure of the UK.

Long-Term Outlook

Despite a rather sizeable investment in the digital economy, government plans will likely have little effect on to things such as the nation's data centres or data centre jobs.  This new plan is more about research than anything else, leaving the private sector to continue leading the way in real-world economic development.  That is not a bad thing.  Let the government fund the research while the private sector puts the knowledge gained to practical use.  Such partnerships provide examples of how the public and private sectors can work together.

In terms of the long-term effect on the Government's plans, scepticism remains.  There are those who question the ability of local communities to translate funding into actionable results on a consistent basis.  If local involvement falters, the long-term benefits of digital research will be minimal at best.

One way to prevent wasting government investment is to heavily promote local partnerships between research centres and private sector businesses.  Perhaps incentivising business investment would encourage private enterprise to put some money into the game, thereby guaranteeing they play an active role in making sure research yields profitable results.

It is clear that the current government believes the future of the UK economy will rely heavily on digital technologies.  It is committing a significant amount of funding that it believes will further enhance the digital economy and keep the UK at the forefront of technology in Europe. Time will tell if they are right.



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