Britain must act or be left behind in the technology race with China
In the wake of its abrupt U-turn on zero-Covid, China signalled at Davos it was open for business and urged the world to abandon its ‘Cold War mentality’.
However, with news last week that the US has halted licences for its companies to export to Huawei and it is joining forces with Japan and the Netherlands to restrict exports of chip manufacturing tools to China, the tech war is far from over. If anything, it’s intensifying.
With the UK unlikely to match the scale of the science and technology budgets of the US, China, or EU anytime soon, it is important to consider our country’s role in the global technology race. What unique value can we add as the West seeks to close the technology gap with China, and how can we protect and leverage our existing strategic assets?
The British science and technology industry is absolutely something we should be proud of - our world-class universities and incredible science base is second to none. But it is vital to zero in on technologies that are fundamental to our future and our position in the world.
This is not about quantity – it is about targeting R&D spending into areas of strategic strength where we are already making considerable headway. AI is one of these areas, with many companies leading here on British soil.
This is particularly important when it comes to China, which has made the advancement of AI a strategic priority. With its unbridled access to troves of intellectual property and people’s data, the threat of its AI program cannot be underestimated. Just last week Chinese Search Giant, Baidu, announced its intention to launch its own ChatGPT. As FBI Director Christopher Wray warned at Davos, if left unchecked, technology like this will be weaponised.
With this growing threat, our AI companies and the technology they produce are important in geopolitical terms. If developed and supported further, the UK will have something vital to bring to the table in conversations with allies, and be a real strength to deter our enemies.
However, if the UK is to truly declare itself part of the AI arms race, it must pay more attention to the scaling challenge and translating brilliant AI research into brilliant business. To date, some of the UK’s most successful companies have been acquired by deep-pocketed foreign acquirers once they reach the $300-400 million mark. As such it is crucial that we are doing more to incentivise tech companies to list in London, so the UK can truly become an incubator for technology that will be the envy of our rivals.
In terms of protecting our strategic assets, we have made progress with new powers under the National Security and Investment Act (NSIA). The government has investigated and blocked a dozen foreign deals, including one that would have seen the University of Manchester sell novel computer vision technology to a Chinese firm and a buyout of Newport Wafer Fab by a Chinese-owned Dutch corporation.
However, the NSIA is not being applied consistently and as a result, some of our assets are slipping through the net. For instance, with the world engaged in a chips arms race, the acquisition of Cambridge-based semiconductor firm Flusso by a Chinese entity for £28m, seems short-sighted. Particularly given the lack of a coordinated and comprehensive strategy when it comes to the UK semiconductor sector.
With budgets squeezed, there is also the temptation for our universities to give away our technological know-how in exchange for funding. Last month The Times found that some 42 British universities have links with Chinese institutions connected to "the repression of the Uyghurs, espionage, nuclear weapons research or hacking”.
As a technologist myself, it is this osmosis of information that concerns me more than incorporating foreign technology like Huawei’s 5G equipment, which can be tested and utilised where necessary.
With the deadline for the CFIUS - the US equivalent of the NSIA – to decide whether the UK receives automatic approval on investments in the US - there has never been a more important time to protect our strategic companies, guard our intellectual property and apply the terms of the NSIA consistently.
This is also a race we cannot win alone, and forging partnerships with non-EU science powerhouses should be our priority. During his leadership campaign, the Prime Minister spoke about a ‘NATO-style’ international alliance to defend against Chinese technological aggression, but this is yet to be seen. If we are to steal the march on technologies like AI, we must be working with our allies and inviting the best and brightest to the UK to strengthen our science and research base.
The science industry is of immense strategic and geopolitical importance and we should treat it as such. With the right policies and a brave vision, the UK has the potential to join its allies and become a leading player in the AI arms race.
Dr Mike Lynch OBE FREng FRS