The fourth industrial revolution, powered by the Internet of Things (IoT) & big data, will reside in the cloud.
There was much talk last week about supporting the UK tech sector and innovators. The leader of the opposition Labour Party in the UK, Jeremy Corbyn, even referred to the “white heat of technology” when addressing the Confederation of British Industry (CBI) annual conference of business leaders in London on 21 November, citing Harold Wilson’s famous speech in 1963 and said the government “needs to prioritise investment-led growth”.
This requires money to be put into digital infrastructure as many inventions of the future will rely on cloud computing and the Internet, upon which it rests, to come fully to fruition.
It was therefore heartening to see the UK government later announce a £1bn ($1.2bn) fund for digital infrastructure projects and 100 per cent business rates relief on new fibre during the 2016 Autumn Statement outlining the government’s finances just two days later on 23 November.
During his CBI speech at the Grosvenor House Hotel, Corbyn called for “3 per cent of UK GDP to be spent on research and development (R&D)” in future, “in-line with the CBI and G20’s stated aims”, and to catch up with France, Germany and Japan. He also talked about the need to “rise to the challenge of the fourth industrial revolution” and hinted that a bit of optimism was needed to grow the economy out of potential post-Brexit trouble.
The fourth industrial revolution
“We now face the task of creating a new Britain from the fourth industrial revolution, powered by the Internet of Things (IoT) and big data, to develop cyber physical systems (i.e. driverless cars, etc) and smart factories,” said Corbyn at the CBI, as he tried to talk up the potential of technology to improve economic performance in the UK.
What is not in doubt is that the IoT, big data, 3D printers, robotics, artificial intelligence (AI) and so forth, much discussed at the 2016 CBI annual conference and what might be termed cognitive technologies, rely on cloud computing to a greater or lesser extent to achieve their full impact, to be fed data, and to operate successfully.
The third industrial revolution was the Internet in the 1990s. Steam power in the 19th century and electricity afterwards were the first two revolutions, cited by Corbyn.
The mood to invest in technology and infrastructure was evident in the 2016 UK Autumn Statement when the Chancellor, Philip Hammond, announced £500,000 for financial technology specialists and a network of regional fintech envoys. These will be supported by an annual 'State of UK FinTech' report that will provide key metrics for investors as the government seeks to reverse the post-Brexit decline in this sector.
According to Innovate Finance Britain’s vote to leave the EU has seen venture capital (VC) investment decrease by 26 per cent up to Q3 2016 to $532m so far this year v $1.1bn in 2015.
Other stimulation measures announced by the UK government in the last ever Autumn Statement on 23 November were to:
- Invest £2bn ($2.5bn) annually in UK R&D by 2020.
- Examine how innovative UK startup firms can get long-term investment to scale up with a ‘Patient Capital Review’ to be chaired by Damon Buffini, ex-head of buyout firm Permira. As the Prime Minister, Theresa May, said in her own CBI speech when previewing the move: “There is no point having great ideas, products or startups if you can’t get the investment you need to grow.” The aim is to ensure the next DeepMind doesn’t need to sell out to Google to gain funds for growth.
- £400m ($500m) will go into venture capital funds via the British Business Bank to unlock £1bn ($1.2bn) in finance for growing firms.
Whether these measures will be enough to stimulate growth against the expected Brexit-induced inflation and tough economic times for Britain remains to be seen, but the government is betting on infrastructure and the technology sector to help it stimulate growth and productivity.
Cloud computing will inevitably be a part of this dash towards the “white heat” of technology but whether the UK government’s thinking is proven to be cloudy or lucid will be up to history to decide. Wilson’s initial use of the phase warned against the disruptive challenge of automation and the start of computerisation, and the need to harness these forces for human good. But the technologies changed the face of post-war Britain regardless – just as the digital disruption evident today from mobile and data services, startup neobanks, crowdfunders, social media, AI, blockchain and other such nascent technologies could do again. The cloud will be a prime ingredient in this fourth industrial revolution.