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New innovation department could be a ‘gear change’ for tech growth, industry chiefs say

The creation of a new government department for technology and innovation could be a “gear change” for growth in the UK’s tech sector, industry chiefs said today.

Downing Street announced this morning that the government would carve up the existing department for business, energy and industrial strategy into three distinct bodies including department the department for science, innovation and technology. Ministers say the newly spun out department will hone in on turning “scientific and technical innovations into practical, applicable solutions to the challenges we face”.

The move has been hailed as a significant one by tech chiefs who claimed it could shift the weight of Whitehall behind the UK’s tech businesses.

Speaking about the changes, Russ Shaw, chief of Tech London Advocates, said: “Clearer focus on technology and innovation from the top down can only be good for the UK’s thriving tech sector, and it’s important this departmental focus is now complimented with other aspects that will help grow the industry – including cooperation with international tech hubs, progressive regulatory regimes and open channels to access talent from abroad,”.

He added that the creation of the department was a “gear change that shows the Prime Minister is looking to go beyond the rhetoric and ambition we’ve seen set out to date and more clearly commit Government resource and personnel to growing this part of the economy.”

Michelle Donelan will head up the new department moving on from her previous role at the department for digital, culture, media and support, which will now be stripped of its digital responsibilities.

DCMS had previously been charged with overseeing the growth of the UK’s tech ecosystem and controlling initiatives like the digital growth grant, which was controversially handed to a Barclays accelerator last week. The decision drew the ire of tech chiefs and led to the winding down of start-up quango Tech Nation.

Digital lobby group Coadec, which was highly critical of the recent digital growth grant decision from DCMS, said the new department would be “good for British startups”.

“”There’s long been the need for a real innovation voice in Whitehall,” Coadec chief Dom Hallas wrote on twitter. “Bringing research and funding from BEIS with the digital policymaking from DCMS makes real sense.”

The workability of the move has been called into question, however, by the think tank Institute for Government.

The group said that while the change would send an “encouraging signal” to the tech sector it may be less effective in practice.

“Science spending is decided in a very decentralised way through many different arm’s length organisations, competitively. Making it do anything differently is hard work, no matter what the Whitehall structure,” researchers at the group said.

UK Research and Innovation, a non-departmental public body of the government that previously directed research and innovation funding from DCMS, insisted the move was potentially transformative.

“The establishment of the new Department for Science, Innovation and Technology is an incredibly exciting development, signalling the Government’s commitment to building a fully joined up research and innovation system,”  Professor Dame Ottoline Leyser, UKRI chief executive, wrote on Twitter.

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New innovation department could be a ‘gear change’ for tech growth, industry chiefs say

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