by Lucy Young (Research Analyst, Technology)
Technological sovereignty, in the national sense, is where states rely upon nationally owned technology to function effectively, as opposed to imported goods and data. This means there is greater regulatory autonomy, creating a healthier cycle of commodity production and sale within the confines of one's own economy and legal system. Not to confuse this with data localisation, which requires data to be solely stored within the confines of territorial borders, as seen in countries like India and China.The way I see it, technological sovereignty would be beneficial for the British economy, but this is entirely dependent upon the government’s willingness to ensure transparency and more lenient borders.
China is a prime example of a country reliant upon their own technology infrastructure, with the creation and distribution of Huawei technology throughout the world, and in the southern hemisphere especially. According to the White House in May 2020, this was done with the intent to “exploit the free and open rules-based order and attempt to reshape the international system in its favor”. In fact, throughout 2020, it seemed to be Trump’s administration that was exploiting parties in this dispute, as they openly pressured the U.K. to completely stop reliance upon Huawei in favour of other (American) companies. Trump’s own immigration policy is proving beneficial for other innovative nations, driving talent to the UK and Canada.
These countries are joined by the E.U., also moving quickly to enhance their own internal technology market, as seen with the globally supported GAIA-X innovation. But with this new internalised system comes heightened fears that nations like France and Germany will advance past the rest; some may argue there are limited abilities to protect national policy and ensure fair competition within the Single Market Framework - and in response to this, Erixon (2020) identified four variables that come into play, relating to technological sovereignty and political considerations. These are cultural understanding, control over the digital economy, gaining dominance in EU competition, and also ensuring cybersecurity protection. It is evident that Britain’s neighbours hold the reins on training tech specialists to achieve optimal results.
Promisingly, the U.K. has been moving in a direction that enhances British business and innovation. Various U.K. start-ups have been acquired by international giants - with a prime example being the acquisition of British chip designer Arm Ltd by Japanese company SoftBank for $40B. In fact, around 77 large start-ups have been valued at over $1B, making them unicorns. However, it seems that leading growth innovators are France, Japan and China, and most technologically advanced nations are Germany, Singapore and South Korea - thus forcing the U.K. to play catch-up.
As we cut ties with the E.U., it is pivotal that the U.K. adopts a digital framework which would assist and support British companies in ensuring their tech can be the most prominent in the market, resulting in a limited need to outsource. This will prove to be difficult, as Britain is heavily reliant upon foreign big tech, like Apple and Alphabet. One solution to this was outsourcing infrastructure from neighbouring nations, which was one of the main beneficial functions of remaining in the EU, rather than looking across the Atlantic for westernised tech templates.
High achieving STEM students are often found in Iran, Germany and Singapore, thus explaining the U.K. Government’s new fast-track Visa initiative to get more foreign talent on board. A strong market Britain can offer is the medical tech sector; director of HealthIQ, Hassan Chaudhury, claims that the U.K. is leading the way in medical technology because the NHS can’t afford to be lazy about design and testing. This includes Babylon Health (Jersey-based) and CMR Surgical (Cambridge-based), as well as fintech initiatives, Rapyd and Sterling Bank. As a result, 2019 was the U.K.’s most successful year for digital innovation, with greater VC investment than Germany and France combined. Despite this, there are 600,000 tech-related vacancies across the country, likely due to the instability of starting a new life and job in the UK during the transition period of Brexit, or due to lack of skill and training in the U.K.
I believe the tech sector is an invisible industry from a public perspective, especially fintech industries. This is evident in the lack of homegrown talent and training provided in the U.K. Being a software engineer or product manager is a highly specialised role, and one that often requires an expensive university degree, which is where Britain falls short - lack of knowledge to reinforce innovation. While Chancellor Sunak has created R&D initiatives throughout the pandemic, this doesn’t help young people venture into the field to begin with. Developing accessible pathways, and normalising the industry in younger education could be pivotal.
I’d recommend lenient visa regulation and admission for international talent. Arguably, leaving the E.U. relapsed our progress in foreign relations, but this could be an opportunity to collaborate with the South East (especially after the U.K.-Japan deal was executed earlier this year) and other Nordic nations like Norway and Iceland.
Technological sovereignty could be the national, political initiative that Britain needs to thrive independently, perhaps enabling us to follow in the footsteps of Germany and Japan.