Look at the history of Taiwan’s semiconductor industry and you’ll find its success is no accident. The Taiwan Semiconductor Manufacturing Company, which does what it says on the tin, was planned, commissioned even, by its own government.
If you turn to an equivalent in the UK, the semiconductor group Arm, architect of some of the world’s most important chips, it had a far more chaotic trajectory. Starting with 12 individuals working from a village barn whose first meeting was in the local pub, it seemed to become a tech behemoth partly by luck and happenstance.
Examine its history more closely, however, as James Ashton has done in The Everything Blueprint, serialised in The Times, and there are signs it was spurred on by a strategy: to bring computers into every UK family home through the BBC Micro, manufactured by Acorn Computers in Cambridge. Arm was a spin-out of Acorn.
With an election looming there are growing calls from across the technology sector for more of an industry game plan, more BBC Micro-esque projects. We dumped the industrial strategy in 2021, now we want it back.
The latest rallying cry came last week from that centre of engineering excellence, Imperial College, looking at three sectors in which the UK had traditionally excelled. It said starkly: “The UK is faced with a dramatic slowdown in its rate of economic growth, which is largely due to the declining rate of innovation and competitiveness of key sectors of the economy”.
On a hot July morning academics from the business school and engineering faculty gathered to launch initial reports about the state of telecommunications, biopharma and medical technology. They said that their analysis would help inform any future industrial strategy, and that “turbocharging tech would increase global competitiveness in a painful economic climate”.
Drifting in through the large windows looking out over the grand museums of Exhibition Road were the strained sounds of placard-bearing teachers protesting over pay, as one by one experts told the small audience what was hampering their industries. The reasons are, of course, complex and nuanced, but there were some common threads.
One was the decline of the UK’s manufacturing sector. In biopharma, volumes are down 29 per cent since 2009, with the loss of 7,000 jobs because of falling sales margins and the cost of getting the right regulatory certificates for older plants. This is reflected in the trade balance, which has dropped noticeably: the UK’s ranking has fallen from fourth in 2010 to 98th in 2020.
Another concern for the tech businesses interviewed was how changing regulations after Brexit created red tape. In medtech, for example, devices that were certified under EU rules now have to be rechecked under the UK Conformity Assessed mark. Overall, the academics said, the sectors offered amazing economic opportunities, with the right nurturing or “targeted policy interventions”.
While the UK has earmarked key growth sectors and priorities in tech, look around the world and industrial policy is back with a vengeance. The chips acts in America and Europe, the US Inflation Reduction Act and the EU’s Net Zero Industry Act, are examples, offering mega subsidies and tax breaks.
Just this week China announced the introduction of restrictions of exports on some critical metals used in the manufacture of, among other things, semiconductors. The UK’s own semiconductor strategy was a bit of a damp squib, more a set of aspirations with no significant funding. TechUK, the trade body, recently bemoaned the lack of a long-term plan for the industry, warning there is a “risk of the UK falling behind” in this global race.
Imperial, a world-leading university with a rich engineering history, is forever name-checked as one of the UK’s centres of technological excellence. We should all sit up and listen.
