Chancellor’s keynote speech at London Tech Week

Hello – welcome to London tech week.

Your success is personal to me.

I had the privilege of living, studying and working in California.

This experience left a lasting impression on me.

I have lived and breathed the adventurous, optimistic and forward-thinking culture.

Ready to take risks.

Be imaginative.

To create new products, services, businesses that could change the world.

And I see that culture here at home too.

I have traveled extensively over the past few months, all over the UK.

And everywhere I go, I meet hungry, ambitious young people, free from shyness and orthodoxy.

And looking at you all, I know we’ll see the same spirit here at Tech Week as well.

So I’m optimistic.

And the statistics show that there are good reasons to be optimistic.

The UK has created more tech unicorns than any other country except the US and China.

We have extraordinary and distinctive strengths in fintech, life sciences and creative industries.

Our corporate and capital gains tax rates are internationally competitive.

And we are known around the world for our agile approach to regulation…

…which acts, where appropriate, to address concerns about large dominant players…

…while focusing on innovation.

You can see it in our approach to financial regulation, where we pioneered:

The regulatory sandbox, Open Banking, and now, an innovative framework for crypto and blockchain.

So we already have an amazing and thriving tech ecosystem.

But we know we need to do more.

Perhaps the biggest question facing us right now is where our future growth will come from.

The answer is innovation.

Just look at our history.

Over the past 50 years, innovation broadly defined has created around half of UK productivity growth.

But since the financial crisis, as in many countries around the world, our pace of innovation seems to have slowed.

But I am convinced that we can turn the tide.

With the rise of general purpose technologies like AI, it is plausible to believe that we are on the cusp of a new wave of innovation.

But we have to make sure we’re ready to capitalize.

To do this, three tools are at our disposal: capital, people and ideas. And we deploy them all.

Capital first.

The UK is already a natural home for growing companies looking to raise funds.

In 2021, even in the midst of covid, venture capital investment in the UK hasn’t just increased – it has more than doubled.

London is the fourth for venture capital investments in the world, behind Beijing, San Francisco and New York.

Our tax breaks for investing in start-ups are among the best in the world.

And these are not only private markets, but also public ones.

In 2021, more than 120 companies have chosen to register in London; confirming that London is the dominant European IPO market.

And we want to go further.

We are reforming our listing rules to make it even easier for companies to raise public funds.

We are revising Solvency II and the cost cap regime to unlock pensions and insurance sector capital.

And through the Future Funds and the British Business Bank…

…we provide direct government support to some of the most exciting and fastest growing scaling companies.

So if you’re an entrepreneur looking for funding, I want you to look at the UK and say, this is where I want to be.

Now our second priority is to equip our people with the skills they need to thrive.

We have some of the best educated people in the world.

And the percentage of college graduates taking STEM courses here in the UK is higher than in the US.

But we don’t have a monopoly on talent.

Nearly half of our STEM researchers are immigrants…

…and about half of our most innovative and fastest growing companies have an immigrant founder.

So we’re making our international talent visa system the most competitive in the world.

Let me give you just one example.

We have just announced a new high potential Individual visa.

If you are a young…

Who graduated from one of the world’s top 50 universities…

You can come to the UK…

With virtually no strings attached…

No job offer…

And stay here, as a family, for two years…

Just to explore. Work. Study. Invent. Determine what you want to do.

And that should send a loud and clear message to the world’s brightest talents:

If you come to the UK, we will support you to succeed.

Nothing like it exists anywhere else in the world.

And that sums up our visa philosophy:

Less “build it and they will come”, and more “let them come and they will build it”.

So capital, people and the third – ideas.

The UK has less than 1% of the world’s population, but four of the world’s top 20 universities.

2nd highest number of Nobel laureates of any nation.

The third highest number of research publications in the world.

But we cannot just rest on our laurels.

We must do more to support private sector R&D.

And that includes taxes.

At first glance, we have one of the most generous tax regimes for R&D investment, measured by how much we spend on it.

But despite huge and rapidly growing expenses, it’s clear that it’s not working as well as it should.

In the UK, business spending on R&D is only three times the value of R&D tax relief.

The OECD average? 13 times.

I will therefore ensure that our tax regime for innovation is globally competitive and creates the right incentives for each of you to invest and invent.

And of course, the government will also do our part.

Over the next few years, we will increase government investment in R&D by nearly 50%.

In % of GDP, this will put us above Germany, France, Israel, Canada, Japan and the United States.

And one technology that will become increasingly critical in the years to come is edge computing.

The extraordinary power of the emerging generation of supercomputers will change every aspect of our economy.

So I’m excited to launch a new review today on the future of computing.

Directed by Professor Zoubin Ghahramani… [GAR-A-MAA-NEE]

Professor of AI at the University of Cambridge and Director of Google Brain……

He will report later this year with recommendations on how we can meet the UK’s IT needs not just this year, but for decades to come.

Let me conclude with one final thought.

My political opponents love to describe me as some kind of tech geek.

As you probably understood this morning, it’s a label I’m really proud of.

I will always be on the side of entrepreneurs, innovators, young people who invent the future.

Because the biggest lesson I learned from my time in California still guides me today, as Chancellor.

What really matters for economic success is innovation.

If we want our country to succeed, we must do what we have always done and embrace new technologies, and the people and culture that create them.

No serious analysis of our prospects could conclude otherwise.

Because if we can do it right…

If we can sustain our capital, our people and our ideas…

If we could encourage this incredible spirit that I see all over this country…

We can then be sure that Britain is on the cusp of a new era of innovation and change.

And ultimately, what gives me this confidence is standing here on this podium and watching all of you.

People of talent, ambition and imagination, relentlessly seeking…

…for that next new idea that will shape our lives and change the world.

Thanks.

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