February’s cabinet reshuffle saw the creation of a new Department for Science, Innovation and Technology (DSIT), headed up by Michelle Donelan. The new Secretary of State says the department will promote growth, encourage the creation of new jobs and bolster innovation.
For the first time, the five technologies of tomorrow: quantum, AI, engineering biology, semiconductors and telecoms, will be brought together under one umbrella department. Also included within its remit will be life sciences and green technologies.
But what exactly does it mean for UK startups and scaleups operating or planning to operate within the sector?
Big hopes for small tech firms
Certainly the government is demonstrating its commitment to tech. The Secretary of State set out her plans for the department while visiting the Rosalind Franklin Institute, the new medical research centre at Harwell in Oxford. There, she committed additional funding of £40m to the centre, part of a planned £20bn annual investment in tech and innovation. The goal, Donelan says, is to make the UK the most innovative economy in the world and a science and technology superpower
It’s something that couldn’t come sooner for the sector. 2023 has already seen the UK suffer setbacks in the tech sector including the closure of tech incubator, Tech Nation. So, for the most part, it’s a move that has been welcomed by the science, tech and business communities.
What will DSIT do?
Prime Minister, Rishi Sunak, has highlighted six ‘priority outcomes’ for DSIT:
- To increase the level of R&D to make the UK the most innovative country in the world.
- To deliver gigabit broadband to make the UK a place that will attract business and develop talent.
- To put public services at the forefront of innovation.
- To strengthen international collaboration on science and tech.
- To deliver key legislative and regulatory reforms on tech.
To boldly go…
One start-up sector that’s hoping to benefit is the space industry, still reeling from the failed launch of Virgin Orbit’s Cosmic Girl. The UK’s budding space sector gained prominence in 2022 with the building up to the satellite launch, and despite its failure, the industry in poised for huge growth in 2023 with a host of companies preparing for launches and many new start-ups in the offing.
Government funding and support will no doubt play a key role in developing these new companies to address the country’s challenging in its space endeavours.
Will startups benefit?
Not everyone is convinced that the department will be good for startups. Alterations to the R&D Tax Relief system have already left some start-ups unhappy as SME deduction rates were cut from 130% to 86%. It begs the question that if the government is making noises about helping start-ups, why is it at the same time limiting tax relief to those same start-ups. Is it that focus will be on bigger business and multinationals? That remains to be seen.
One company that is optimistic is Plexal – an innovation firm that partners with the government and industry to help tech start-ups secure funding.
CEO, Andrew Roughan, said of the initiative: “The directive from the top of government is clear, and at Plexal we look forward to working with the new department to unlock the full potential of the UK’s start-up ecosystem to fulfil the innovation agenda.”
JPP Law
We support businesses at all stages of their lifecycle but many of our existing clients are technology based start-up or scale up companies. Businesses at this stage of the lifecycle need very specific legal support to guide them through investment, innovation challenges and rapid growth. JPP Law has the expertise to help. If you would like to discuss the legal aspects of your business, please feel free to book an introductory call.
