UK commits billions to 'industries of future'

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British Prime Minister Theresa May has pledged to spend billions of US dollars on national research and development to try to spur post-Brexit productivity and economic growth.

On Monday, as part of the run-up to finance minister Philip Hammond’s budget on Wednesday, May announced a 1.7 billion pound (2.2 billion US dollars) fund to help regenerate cities and a 2.3 billion pound boost to research and development spending, due in 2021/22.

"This is a new long-term approach to shaping a stronger and fairer economy for decades to come," she said in a Times newspaper article. No further details were given.

Amid stiff international competition, Britain is looking to carve out a new global role as a leader in "industries of the future" such as artificial intelligence and driverless cars after it exits the European Union in March 2019.

VCG photo

Badly damaged by a botched snap election and with Brexit talks running behind schedule, May is looking to stir up some economic optimism to help her fragile minority government through Britain’s most uncertain period since World War Two.

The central challenge of Wednesday’s budget will be to improve Britain’s persistently weak productivity, which lags international rivals and is seen as a major limiting factor on economic growth.

The new funding is linked to Britain’s "Industrial Strategy" – a push to create more skilled, high-paying jobs that was first announced by May after she took office last year to help fortify Britain’s services-reliant economy against Brexit-related shocks.

May has already set a target to increase R&D spending to 2.4 percent of economic output by 2027 – a level in line with Organisation for Economic Cooperation and Development (OECD) averages.

The funding announced on Monday would take spending to 12.5 billion in 2021/22, building on an existing commitment to raise public research spending to 12 billion by 2020/21.

Britain's Prime minister Theresa May arriving at a European Union summit in Gothenburg, Sweden, on November 17. /VCG pho

The transport-focused "Transforming Cities Fund" will try to better link up Britain’s cities in search of productivity improvements and foster greater collaboration and innovation.

"This will help make sure people across the country have better options to combine different modes of transport - supporting projects which will improve connectivity, reduce congestion and introduce new mobility services and technology," said business minister Greg Clark, who is leading the Industrial Strategy initiative.

After nearly 18 months of policy formulation, Clark will announce the government’s industrial strategy proposals on Nov. 27.

Source(s): Reuters