Today the Chancellor, George Osborne used his Budget speech to set out his 'industrial ambition' that Britain becomes Europe's major technology hub. We have seen this in evidence already with the government's support for 'Tech City' in East London, where last night Google opened their new 'Campus' centre to provide a workspace and mentoring for start-up technology businesses. In addition to this has been the government's investment in upgrading the UK's high speed broadband and Wi-Fi network.
The Budget presented further good news that the film industry's tax credit, which has helped to generate over £1 billion of film production investment for Britain, will be extended with similar schemes to support video games, animation and high-end TV production industries. This is a move that I and many people across the industry have been calling for and will be a great boost for the UK's creative economy.
This change will hopefully mean that more high end British TV dramas like Birdsong and Julian Fellowes' new series Titanic will be filmed here rather than abroad. It may also mean that our video games industry no longer loses jobs and businesses to other countries that have tax incentives to attract investment and talent.
But George Osborne is also sending out a strong message that in the 21st century Britain needs an industrial strategy, but one that is very different from the model we associate with the economic failure of the 1970s. Then, industrial policy was not about innovation but protection.
It was designed to keep people in work, rather than removing artificial barriers to growth. Industrial strategy in the 21st century should be bold enough to look at fast growing sectors of the economy, where we already have dynamic businesses and a highly skilled workforce, and help them to go further. This is particularly important with industries that are highly international, and were opportunities can easily move to the most accommodating market.
In the case of the creative sector, we already have the talent, facilities and technology to compete with the best in the world, but we were losing business because we weren't operating on a level playing field in terms of tax incentives. The tax breaks offered now for production work in the UK remove that barrier to investment and we should see the benefit from that.
21st century industrial strategy also recognises that there is a considerable advantage to having recongnised centres of excellence in a global economy and government support can help to establish these centres and send a signal to the market to invest.
We should have an ambition for a Silicon Valley in Britain based around and extending out of Tech City. The support of the government for this has helped to persuade companies like Google to invest in creative and digital infrastructure in the UK, rather than in other European countries.
A combination of public/private partnership is also behind the establishment of successful new creative hubs like Media City and the Sharp Project in Manchester, and the Custard Factory and Fazeley Studios in Birmingham. Even in the USA, it was work form the navy, NASA and the support of Stanford University that helped create the research centres that led to modern Silicon Valley. Out of this companies like Hewlett Packard and Xerox were born; followed by the next generation of Microsoft and Apple.