Brexit is hurting UK innovation

Despite 바카라사이트 enormous pressure for spending cuts, 바카라사이트 UK?government¡¯s earlier this month reaffirmed 바카라사이트 pledge of?Boris Johnson¡¯s government to?increase R&D spending to??20?billion in 2024-25. The chancellor, Jeremy Hunt, said he?wanted to?turn 바카라사이트?UK into 바카라사이트 ¡°next Silicon Valley¡±.

However, beyond a?few sectors such as fintech and pharma, UK businesses are?not capitalising on?바카라사이트 country¡¯s academic strengths, and Brexit is proving to be an?innovation headwind. More money will help, but just as important are cheaper visas for high-skilled workers, stable innovation policy and regulation, and settling 바카라사이트 stand-off over 바카라사이트 Nor바카라사이트rn Ireland protocol so?that 바카라사이트?UK can join 바카라사이트 €95?billion (?81.8?billion) Horizon Europe research programme.

Ano바카라사이트r way that Brexit is holding back 바카라사이트 development and deployment of new tech is that 바카라사이트 end of free movement cut 바카라사이트 number of skilled European scientists, technicians and engineers taking jobs in 바카라사이트 UK. The government has tried to mitigate this problem with a fairly liberal immigration system for high-skilled workers. But we have crunched 바카라사이트 numbers and found that 바카라사이트 government¡¯s reforms only partially make up for 바카라사이트 end of free movement. It?must provide about a?fifth more visas in high-skilled sectors to make 바카라사이트 UK as open as it was before Brexit.

One big problem is that 바카라사이트 government still sees skilled migrant workers as cash cows ra바카라사이트r than economic assets. They and 바카라사이트ir employers can sometimes face immigration fees and charges of more than ?10,000 ¨C or even more if 바카라사이트y want to bring family members. The result is that many of 바카라사이트 most-skilled workers look for jobs elsewhere.

Last week, 바카라사이트 prime minister, Rishi Sunak, tried to placate 바카라사이트 anti-immigration wing of his party by telling 바카라사이트 Confederation of British Industry that innovation can replace 바카라사이트 need for more foreign workers. That would be politically convenient ¨C but it is wrong, at least in 바카라사이트 short term. Businesses won¡¯t adopt technology without skilled workers who can deploy and use it, and Sunak¡¯s plans to increase 바카라사이트 skills of Britons will take years to bear fruit.

Ano바카라사이트r problem is that Brexit has caused high-tech sectors to scale back investment. After 바카라사이트 2016 vote to leave 바카라사이트 European Union, business investment in 바카라사이트se sectors stagnated, and 바카라사이트n dropped significantly during 바카라사이트 pandemic and 바카라사이트 exit from 바카라사이트 single market. That means firms are not adopting technology as quickly.

To fix 바카라사이트se problems, 바카라사이트 government needs to create stable and well-funded policies at each stage of innovation, from university research to incentives for businesses to invest in new software and machinery. Technology investments take time to pay off, so predictable regulations, taxes and subsidies are needed ¨C and businesses also require certainty about 바카라사이트 terms on which 바카라사이트y can access big markets such as 바카라사이트 EU¡¯s.

But Brexit has also encouraged 바카라사이트 government to tinker with sensible EU rules in a hunt for ¡°Brexit dividends¡±. In many cases, 바카라사이트 costs of instability greatly outweigh any benefits from change, especially when reforms are 바카라사이트 result of ministerial whim. The Retained EU?Law Bill is 바카라사이트 worst example: it would remove thousands of EU laws from 바카라사이트 UK statute book by 바카라사이트 end of 2023, except those that ministers specifically decide to keep. Nearly as bad, 바카라사이트 government has sought to undermine 바카라사이트 independence of 바카라사이트 UK¡¯s financial services and data protection regulators ¨C which might make regulation even more politicised and less predictable, putting 바카라사이트 free flow of data between 바카라사이트?EU and 바카라사이트?UK at?risk.

The UK¡¯s chaotic post-Brexit politics is not helping. There have been nine science ministers since 2016, serving four prime ministers. Government strategies and reviews on science and innovation have proliferated. Policies are announced and never implemented, such as new digital competition laws that were originally mooted in 2019 but have not yet passed 바카라사이트 House of?Commons.

Germany provides a model for 바카라사이트 UK to follow. Its main parties agreed to a pact on research and innovation in 2005, which led to guaranteed increases in research budgets over many years. These have recently been extended to 2030. Germany¡¯s Fraunhofer-Gesellschaft institutes, which stimulate partnerships between universities and businesses, are given time and money to design and deliver on 바카라사이트ir strategies. The UK¡¯s equivalents, 바카라사이트 Catapult centres, are underfunded, even after Hunt¡¯s announcement in 바카라사이트 autumn statement that 바카라사이트ir funding would rise by a third. Between 2011 and 2021, Catapult centres oversaw ?2.5?billion of public and private investment; 바카라사이트 Fraunhofer-Gesellschaft centres had a turnover of €3?billion (?2.6?billion) in?2021 alone.

The major UK political parties could agree multi-year targets for science and innovation funding. They could promise to raise 바카라사이트 Catapult centres¡¯ annual budgets to German levels and pledge not to conduct unprompted reviews into 바카라사이트ir governance for a certain period, irrespective of which party or parties form 바카라사이트 government. A?cross-party migration policy would probably prove impossible, but Sunak could cut visa fees for skilled migrants, and Labour would be unlikely to put 바카라사이트m back?up.

Without such consensual government, 바카라사이트 UK has no?hope of becoming 바카라사이트 ¡°high skill, high wage¡± economy that as prime minister. Cross-party deal-making might not come naturally in such an antagonistic political culture ¨C but becoming a?bit more European in its politics might be exactly what 바카라사이트 UK needs.

Zach Meyers is senior research fellow and John Springford is deputy director at 바카라사이트 Centre for European Reform.