The UK's Chancellor Philip Hammond released his first Autumn Statement which brought some clarity on where the country stands with its economic and business strategies before it leaves the European Union.
Among the central plans is the £23 billion investment in infrastructure, productivity and innovation, in order to boost the country's competitive advantage. Particularly, investment is going to be focused on the tech sector development, low-emission vehicles, broadband, and the deployment of 5G networks. Innovation and R&D initiatives were warmly welcomed by many industry practitioners. Amongst whom is Phil Smith, Chairman of Cisco UK & Ireland, a multinational technology conglomerate, who said: 'Our greatness comes from our ability to innovate, whether it's Turing’s code breaking or the numerous British inventions that came together to provide the digital backbone of the industry. We strongly believe that our edge will once again come from our unique culture of innovation in technology, with the potential to vastly improve the productivity of the UK industry through digitisation.'
The reliance on innovation can indeed support Britain through times of turbulence. According to research data acquired by Sky, 70% of UK firms are planning to increase or maintain their spending levels on innovation following the Britain's decision to leave the EU. Based on the autumn statement, it will be easier to do so as £400 million will be provided through the British Business bank to spend on growing innovative firms. Another £2 billion will be invested in R&D as part of UK's industrial strategy. Regarding taxation, corporate tax will be slashed to 17% by 2020, plus, the government will review the R&D tax incentives to further benefit scientists and innovators.
There is, however, also a downside. The slowdown in country's GDP growth is inevitable, with forecasts having downgraded it from 2.2 % to 1.4%, as a result of the uncertainty surrounding the Brexit vote and higher inflation. Additionally, £23 billion for innovation are to come from public net borrowing - if added to all measures to support the weaker economy, the public sector net debt is expected to increase by £220 billion by the end of the parliament and will hit £ 1.945 trillion by 2021, according to the OBR forecast.
However, some received the forecast sceptically, with some Conservative MPs saying that the figures 'are probably still quite wrong'.
Phil Foster, Managing Director of the business energy comparison service Love Energy Savings, pointed out that: 'The revised-down forecasts for growth in 2017 should be taken with a pinch of salt. Forecasts for post- Brexit doom and gloom have not materialised so far. As any business owner will tell you, a lot can change in a year. Next year will be a prime example, with Theresa May confirming that Article 50 will be invoked by the end of March.'
It's undeniable that the country is about to completely change the course of its history, however, as the decision has been made, the government and businesses should work on an effective collaboration to ensure that aside from stagnation, leaving the EU can bring long-term opportunities.