Budget: UK chip strategy still nowhere to be seen. Money for quantum, AI? Sure The UK government is upping investment in quantum by £2.5 billion ($3 billion) over the next 10 years, and also putting up £900 million ($1.08 billion) for AI Research and the country’s own exascale computer. In his 2023 Spring Budget, the nation's finance minister, Chancellor of the Exchequer Jeremy Hunt, had few surprises …
The problem with a semiconductor strategy is that the government will have to talk to grown ups - people in the industry who understand this sort of thing. People with carefully calculated and justifiable costs and timescales that don't line up with the government's view. They might not say nice things, they might tell some uncomfortable truths and they might not sign an agreement never to say nasty things about the government. The required strategy might be, god forbid, something that they can be measured against. I'd bet that it's being kicked down the road for the next government.
>Hope that the press will not write about the failure few years later or at least it won't be a front page.
I'm not sure whether it works the same way in the UK, but around here it's usually "hope that when it fails a few years later, the other party will be in charge, and then you can blame them".
Yeah - NHS, railways, etc. Whichever party is in opposition always has plenty to say about what the incumbent government should do about such things, then when they get into power they proceed to do nothing (at best) or fuck it up (they usually manage this).
Plus of course nothing they say in their manifesto, even specifics, can be relied on to happen as manifestos are more a confection of whichever lies they think will play well with the electorate rather than any statement of actual intentions.
I remember a government semi-conductor strategy of long ago. I think they even got the EU to adopt it in due course.
In order to boost home-grown production imported components would be taxed. Just components as components. Components already mounted on PCBs wouldn't be. What would be a really important boost for local production? A strong local market in the form of a strong PCB assembly industry. Looking at any PCB the chips on it would be stamped with all sorts of countries of origin. That wouldn't change overnight. Any local PCB assembler wanting to produce a board with a putatively locally made WonderWidget3 would still have to buy in a handful of SN74xx, 555s, 741s or whatever from abroad (who's going to set up a new factory just to produce commodity stuff?). So the local PCB assembler is facing foreign competition selling the board with WonderWidget3 and all the rest already assembled without paying the tax that he'd have to pay to get the rest of the components.
Beware of someone from the government here to help.
Our assemblies are extremely expensive and their ordering process is painful and still stuck in the 90s.
By the time you get an order sorted with our own assembler, you'll have the assembled boards from China already delivered and done to perfection for fraction of the price.
You would really only consider doing it in the UK if you had IP concerns.
The company I currently work for does some robotics stuff and as such has had several PCBs manufactured over the years. Previously my boss used UK suppliers because he wanted fast turnaround times, cost about £100 per board for a delivery time of 3-4 weeks.
When I started working here I mentioned that I had gotten a PCB made in China as part of a hobby project and I paid £20 for 5 boards with a delivery time of just over a week... the company now gets all of its PCBs made in China. We only do small volume one-off projects so we prefer to assemble them ourselves, but if we wanted them to the Chinese supplier will pick and place all of the components and it'll still be here faster and cheaper than a bare PCB from a local supplier.
and that industry could change the lives of thousands in the UK, if ever the handbrake was released and the pedal pushed to the metal.
Empowering the disempowered by stuffing a living wage in their pocket while creating something we could export around the world, isn't exactly the Tory policy of the last forty years.
So. A massive investment by the Tory party in a technology that will provide about a dozen jobs nationwide for those capable of operating a mop and bucket, to clean the data centres, and a few hundred highly skilled jobs.
I really do hope the highly skilled spend all their money on fast food and taxis, so the peasantry might get a sniff of that trickle down money, and not just stuff it into their unlimited pension pot.
The Tory chip strategy is to chip away people incomes and SME profits by raising taxes.
The economic genius that runs in the party, that is the path to growth is through high taxation and high spending will have the whole world in awe.
One day.
Now being serious, why do we need chip strategy? You can go to aliexpress and buy as many chips you want, no questions asked.
Arguably the two biggest success of Western capitalism were the USA's New Deal and the UK's post WWII rebuild. They weren't achieved by giving money to the wealthy and waiting for it to trickle down, but by massive government spending. Contrariwise, the 'low tax small state' approach has not produced significant growth anywhere on earth or at any time in history. Trickledown has failed for nearly half a century at this point ... how much longer do you want to give it?
I'd also argue that the UK isn't 'high taxation' --- it's not a single slider control that affects everyone more or less equally. Nearly 40% of the country doesn't pay income tax at all and an awful lot of people pay large amounts of it, including yours truly, but this doesn't usually include the truly wealthy, who usually pay the square root of sweet fuck all. For them the country is a tax haven.
The reduction of corporation tax to 18% by Osbourne was intended to stimulate growth by letting companies keep more of their profits so they'd be able to invest. What most of them actually did was to buy their own shares to boost the share price and trigger bonuses, increase director pay and increase dividends. We had the lowest investment rate of the G7 in 2019, despite having had the lowest corporation tax for the prior two years, and we still linger near the bottom of the G7 for both investment and growth since Covid.
'low tax small state'
To an extent it is what we have currently. Big corporation have many ways to avoid paying taxes and the state pretends to be small, so they don't get challenged for doing this.
However, for SMEs situation is completely different - they face high tax and the might of the state if they do something wrong.
Now that SMEs make up majority of the economy, you can see why we are not seeing any growth.
The problem with semiconductor funding is that its a known quantity and it lacks any prospect of windfall profits -- its like social spending, spending on 'the people', it lacks any kind of get rich quick angle. (Even the $50 billion Biden is dangling is but a mere drop in the ocean compared to what the South Koreans and Chinese propose to spend).
So its back to "pie in the sky" type projects, the sort that can be done in the metaphorical garden shed on pocket change. This isn't new, its the way that the UK has always gone about things -- the bootleg product that becomes the winner, it happens (and then its milked and milked and milked to the point it becomes embarrassing)(see 'Mini').
ARM was also an example of a low rent project that became a winner. Fabless, of course, because fabs cost real money (and the original ARM was designed to be integrated into ASICs). It got big, international, monetized and sold off.
This article describes the relevant strengths and weaknesses of AI research in the US, China and EU
https://datainnovation.org/2019/08/who-is-winning-the-ai-race-china-the-eu-or-the-united-states/
Somewhere you have to leverage in where UK will be relevant in this.
The answer is not much. Yes we have some talent, but China, US and EU has more and the UK due to its immigration policy finds it very hard to attract from outside. The money and resources look large, but only from a parochial viewpoint. Compared to the resources the other 3 can bring to bear they are quite modest.
The only advantage the UK might have is the ability to drive the program with a clarity of purpose. However we are talking about a country who has shown an inability to create one high speed rail line without backsliding and recriminations. Long term industrial policy has also been a continual sacrifice for short term expediency. The present government has shown it unable to rise above internal cabals, outside lobbying and lack of technical clarity to create the kind of long term policy required
The truth is it would make more sense to collaborate with our nearest neighbor (and the only one likely to accept us) than go it alone, but misplaced jingoism means it is unlikely to happen in this parliment
China has spent fortunes placing it's most able younger generation into intensive education at home (50+hr weeks not unusual) followed by entry into Western universities and institutions.
The reason for doing this is self explanatory - learn "how" to do stuff and take it back home again.
The universities love it because "cost not an issue" when such students are funding their leather chairs and offices. It has, however, meant a lot of the effort placed into developing foreign students does not breed talent and ideas to stay here. Meanwhile, "local" students are given increasingly un-realistic bills to the point where going to a university is out of the question for many. On today's rates, I would never have gone.
Today's rates would not BE todays rates if the universities weren't forced into selling their experience offshore due to terrible decisions made around organisational funding over the last 15 years or so.
Working with nearest neighbours and (formerly) largest trading partners, to say nothing of longstanding political and economic shared interests is so bloody obvious it hurts. But, noooo, stupid nationalism raises it's head and disrupts the good deal we had...
Foreign students subsidise domestic students and have done for years. Increasing restrictions, especially on Chinese students, will see courses cut and universities slimmed down. Add in the loss of EU research money and UK universities are screwed. Isolation makes nations small-minded, insular, backward and parochial. With the planet switching back to nation state tribalism and a new cold war, the UK will be a bit player and government will be managed decline, regardless of the party in power. Brexit means game over. They broke a G7 nation, and still pick up million quid cheques for giving speeches.
Breaking equivalency on goods will see us cut off from the next generation of tech and IoT too. You will be banned from importing or using any of it, in the name of national security.
It's difficult to see anything positive we can excavate from the bomb crater the Tories will leave behind them when they are eventually kicked out of office.
Maybe time for everyone to work on the apologies they will owe their kids in the future. Before the Brexit referendum, Sterling was $1.65, we had good access to any migrant labour we needed and the City of London was a financial powerhouse. We had the sweetest spot in the EU courtesy of Thatcher's opt outs, excellent trade deals with the EU and Commonwealth and the supermarkets were stuffed with food. Coming out of the pandemic, we would have been in really good shape, if it hadn't been for Brexit.
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