Alan Mak is MP for Havant and Founder of the APPG on the Fourth Industrial Revolution.

Each industrial revolution produces winners and losers, and a significant reordering of nations – some rise as their economic and political power grows; others decline as they are overtaken by more nimble and productive competitors.

Today’s largest manufacturing country, China, headed the global output league table nearly two centuries ago, before being ousted by Britain in the First Industrial Revolution. Britain’s reign only lasted until around 1900 as the US overtook us during the Second Industrial Revolution, which saw widespread adoption of technologies such the telegraph, railways and electricity.

America retained its front-runner status during the Third Industrial Revolution – the digital age that includes personal computers, mobile phones and the internet.

Leadership of the Fourth Industrial Revolution (4IR) has not yet crystallised. Characterised by the unprecedented fusion of technologies that blur the traditional boundaries between the physical, digital and biological spheres, breakthroughs – and new products – in fields such as artificial intelligence (AI), robotics, the Internet of Things, driverless cars and drones are already transforming our economy and society. Our competitors are already devising national strategies – Germany’s Industrie 4.0, Made in China 2025 and Japan’s Society 5.0 – to become pre-eminent in the 4IR so they take the lion’s share of new jobs, global investment and national wealth.

Brexit is the opportunity for the UK to review its own economic fitness for the future, and position itself to become a world leader in the 4IR. There is an active role for government, through a market-based, pro-innovation approach, creating more exposure to competition and rewarding firms that invest in new technology. The Big Government approach of the 1970s and “picking winners” should not be replicated.

Today, we need a smart, strategic state focused on creating the conditions for businesses to succeed – access to capital and skilled workers, modern infrastructure, and support in adapting to new technologies – and then stepping back and letting talented British scientists, innovators and entrepreneurs get on with the job.

From full fibre broadband that reaches every home and business to the new Institutes of Technology, our 2019 election manifesto set out many of the foundations we will need to succeed. However, implementing these five new policies would enable Britain to do even better and race ahead of other countries:

British Innovation Principle – a balance to the EU’s Precautionary Principle.

Our 2019 manifesto is clear that EU regulations have been a “barrier to innovation”. As we leave the EU, we should establish a new British Innovation Principle in UK law to provide a pro-innovation counter-balance to the EU’s overly risk-averse Precautionary Principle. Enshrined in the Lisbon Treaty and pervasive throughout EU law and practice, the Precautionary Principle can unreasonably burden innovators with having to prove the absence of danger regarding a particular product, service, or procedure. It does not require regulators to weigh potential risks against the potential benefits that society might enjoy from technological development, and often constrains R&D.

This means Britain is subject to a lop-sided risk assessment process. We can re-balance this with a new British Innovation Principle sitting alongside the Precautionary Principle, and possibly replacing it in the future. This will ensure our competitiveness outside the EU is no longer constrained whilst signalling that Britain is not abandoning health and safety standards.

The British Innovation Principle would place a statutory duty on all public-sector bodies to ensure that, whenever policy or regulatory decisions are under consideration, the impact on innovation as a driver for jobs and growth is assessed alongside any potential risks from technological development.

Increase our overall national R&D investment to three per cent of GDP

There is a widely-recognised link between R&D investment and productivity increases – and an emerging consensus amongst business groups and the science community that Britain needs to invest more this area.
The Prime Minister has vowed to double public funding of R&D to £18bn, with total R&D spend rising from £34bn a year to more than £50bn (2.4 per cent of GDP) by 2027, meaning we hit the OECD average. This is the fastest ever increase in domestic public R&D spending, and very welcome.

However, global innovation leaders such as South Korea spend more than three per cent of GDP. Most of the UK shortfall is in private sector investment. The Government should work with business to develop a roadmap for increasing national R&D investment to three per cent of GDP by 2030. This would allow the Conservatives to demonstrate political leadership on this issue, whilst clearly emphasising that the private sector needs to step up and play its part. R&D tax credits play a key role, and the Government has already pledged to increase the rate to 13% and review the definition of R&D so that important investments in cloud computing and data, which boost productivity and innovation, are also incentivised.

Royal Commission on the 4IR

Just as Greenwich Mean Time became the global standard for time in the 19th century, centred on Britain’s capital, with the right political leadership modern Britain can also determine the parameters of the Fourth Industrial Revolution’s boundaries and benchmarks in the years ahead.

Artificial intelligence, Big Data, autonomous vehicles, algorithms and other 4IR technologies are dramatically changing our legal, moral, political and economic structures, cutting across established norms, the remits of Government departments, and the scope of regulatory agencies. We need a more strategic approach that is informed by everyone affected by the 4IR – scientists, consumers, patients and investors not just politicians and think tanks.

An independent Royal Commission would examine the economic, social, cultural and environmental aspects of the 4IR and make recommendations about how we respond to the new technologies as a society, including how we approach contentious questions such as ensuring privacy, data sharing, digital inclusion and the role of individual autonomy in a world increasingly governed by data and machines. The Royal Commission’s recommendations, and future Government policy, can help us set the standard globally in fields of technology where they are often piecemeal or not yet settled.

Launch a new 4IR Emerging Technologies Investment Fund

A new 4IR Emerging Technologies Investment Fund should be launched to help our entrepreneurs develop and commercialise new inventions. It would use public funds already allocated in the National Productivity Investment Fund and the Industrial Strategy Challenge Fund to attract further private-sector co-investment, creating a growing pool of capital to support our technology businesses.

By supporting the growth of 4IR businesses, the fund will help entrepreneurs create new jobs. A similar fund created by Boris Johnson as London Mayor has worked successfully with £14 million of City Hall seed funding used to attract an additional £64 million of private co-investment. This model should be replicated nationally.

The fund would also help unlock the long-term capital sitting in pension funds and local authority funds to invest in and commercialise our scientific discoveries, creating a vibrant science-based economy post-Brexit. The UK has a world-leading venture capital and private equity sector, and we should utilise their expertise to craft a 4IR-focused Fund that helps Britain to commercialise innovations at the cutting-edge of science and technology.

Review our education system with the same focus as our defence & security needs

The Government should conduct a Future Skills Review (FSR) at the start of each Parliament, taking a strategic look at what skills are currently being automated out of the job market, and evaluating the readiness of our education and training systems to prepare our workforce for the jobs of the future.

Just as the Strategic Defence and Security Review (SDSR) examines the country’s longer-term defence requirements, and the Comprehensive Spending Review (CSR) sets out our longer-term spending priorities, a new FSR would look at how we future-proof our skills base.

The Government’s new National Skills Fund will provide £3 billion for individuals and SMEs to access high-quality education and training, including to help people retain as the economy changes. The FSR would help ensure our financial commitment through the Skills Fund is reaching the right people and helping them adapt for the workplace changes that will happen.

Rebooting our regulatory system, investing more in our science base, setting the standards that the world will follow, funding our entrepreneurs to turn ideas into products, and looking strategically at the future skills our economy will need are the key ingredients which will ensure Britain becomes a world leader in the 4IR, not just a participant.
To fully Unleash Britain’s Potential, we have to set ourselves the strategic goal of being a world leader in the 4IR. Brexit gives us the opportunity and the impetus to re-think how we fund and structure our science and technology research, development and commercialisation. We must not waste this opportunity.