CIO Essentials: Budget reality

Helpful? Certainly. Well targeted? You decide

It was, to the surprise and delight of many in the industry, a tech-centric Budget.

For years the government has spoken boldly about the UK's need to build a new Silicon Valley (which, let's be honest, can't do much more to London property prices), but hasn't followed up words with actions.

Even the super-deduction (now ended) only covered heavy machinery, leaving IT investment out in the cold.

That's why Jeremy Hunt's announcements about sweeping investments in quantum computing and artificial intelligence - plus tax breaks that specifically cover IT equipment - were so welcome.

That said, the plans aren't perfect. Let's take a closer look at the tax break, which allows companies to deduct the full cost of certain equipment - including IT equipment - from their pre-tax profits. In theory, great: big savings on new laptops, printers and servers.

Except...most firms did large-scale replacements of their IT equipment three years ago, when we all had to work from home. And the tax break only covers equipment, not systems. And even if it did, most IT costs are opex rather than capex.

Will the tax break help? Absolutely. Will it have the impact the industry was hoping for? Unlikely.

However, it is great to see the UK supporting its 21st century strength in R&D, instead of just propping up legacy industries that are increasingly moving overseas. We have sorely needed that, especially since losing access to Horizon post-Brexit. These are the first in a long series of moves we need if the government is serious about turning the UK into a science and techology superpower.

It would be remiss to close without mentioning AI in the workplace. The war between frontrunners Microsoft and Google is really heating up, both having added AI to their enterprise systems this week - ironically at the same time Microsoft cut its ethical AI team.

If I were a betting man I'd put my money on Microsoft, which not only has the power of (the now well-recognised) ChatGPT/OpenAI to draw on, but also a massive enterprise installed base. Google made gains during the pandemic, but even if Bard turns out to be more useful than Copilot, that's a lot of momentum to beat.

Time will tell.