A new government poses challenges for digital business and innovation in Britain

In as much as technology and the digital economy had their moment in the spotlight at all during the recent election campaign, the parties' policies contained few surprises. Our attention was deflected instead to speculation regarding the parties' use of social media to attract votes.

But even now that the results are in, the impact on the technology sector of a Conservative majority and a virtual single-party state in Scotland under the SNP is not entirely straightforward.

Storm over Europe

The Conservative’s key policy statement was to make the UK the “technology centre of Europe”. With barely a 20-seat majority in the House of Commons, however, the biggest challenge will undoubtedly come from David Cameron’s own Eurosceptic backbenchers. For the UK to develop any sort of dominance over the technology sector will require intelligent engagement with Europe and EU policy, such as the proposed Single Digital Market.

While the Number 10 website is certainly very enthusiastic about the prospects of this agenda, will for example the MP for Stone (and known Eurosceptic), Bill Cash, feel the same way?

Education

The Tories have also made commitments to improve education in science, technology, engineering and maths. But the progress achieved during the previous coalition government suggests there’s little to this policy that has been properly thought through. The idea of teaching children to code and initiatives such as the “year of code” is (presumably) based on the reasoning that equipping a generation with these skills will eventually give rise to genuine technological innovation and more business start-ups.

But the criticisms of the Year of Code and the project CEO’s disastrous Paxman interview suggests that a code-first approach to innovation is neither a simple nor easy fix. An analogy to this policy would be to put every high school student through a motor mechanics course, in the (clearly mistaken) hope that these skills will re-ignite the UK car industry’s former glories.

Under new management

The demise of the coalition brings uncertainty to the sector and requires the immediate replacement of Vince Cable as business secretary. Cable’s style and approach to business split opinion, but in any case his successor will not be able emulate it. Will technology transfer programmes between universities and businesses continue to be supported? The long-term support for Knowledge Transfer Partnerships is one example of a university-business partnerships that have benefited the UK economy, but potentially are at risk from a more strident majority Conservative government.

Beyond the policy statements made in the heat of an election campaign, Conservative political ideology itself hints at what the future holds for technology, digital business and innovation. Despite the chancellor’s support for developing a Northern Powerhouse, the focus of George Osborne’s speech at Manchester’s Museum of Science and Industry in June 2014 leaned heavily on 19th and 20th-century technology. Osborne’s hopes rest on politicians’ fascination with creating new “big” infrastructure such as trains and roads in order to regenerate economic growth.

However even the chancellor’s references to the world’s largest supercomputer at Daresbury (infrastructure again) seems to reflect a 1960s “big iron” view of computing power, when supercomputers can be fashioned out of Raspberry Pi devices and commercial cloud computing solutions that provide essentially infinite computing power are commonplace.

Old-world vs new-world technology

The list of recent donors to the various parties tends to reveal the types of businesses and organisations that the parties best understand and represent. Seen like this, the prospect is that Conservative innovation and technology policies will encourage new systems that attempt to prop-up pre-digital and problematic business models. For example, those found in the print and broadcast media sectors. For the Conservatives, copyright is in no way a problematic concept.

Genuine business innovations that threaten these existing business models will almost certainly find less favour under the new government – unless developed by incumbent organisations themselves. Innovations that make use of disruptive technologies, such as peer-to-peer networking, or digital business processes, such as Uber or AirBnB, will also be more tightly regulated. Similarly, the tendency for Conservative governments to favour “big finance” businesses such as hedge funds may see an encouragement of speculative copy-cat technology developments, rather than taking the risk of supporting evolutionary or even revolutionary new approaches.

Gordon Fletcher does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.