In a recent article, the dangers of a Liz Truss-style fiscal accident in the US were highlighted, referencing a previous incident in 2022 that led to turmoil in the gilt market. The US shares some similarities with the UK, such as high debt levels and political instability, but its robust economy would likely require a larger crisis to disrupt the Treasury market, such as a Trump-led rule of law crisis.
The discussion then shifts to the importance of having individuals with a background in science and mathematics in government. Examples are given of politicians in Singapore and the UK who have such backgrounds and have played important roles in shaping policy. The UK’s former Minister for Universities and Science, David Willetts, is cited for his work in mapping out key technologies of the future and how to build an industrial policy around them.
Willetts’ review of the “Eight Technologies” and subsequent industrial policy in the UK sheds light on the challenges facing the economy, including the lack of expertise in key areas and the effects of neglecting innovation-focused departments. This has led to an economic model that lacks investment in innovation and accepts inadequate budget plans, such as those proposed by Liz Truss.
The discussion then turns to the UK’s approach to regulating new technologies like artificial intelligence (AI). The current government’s reluctance to regulate AI has created a policy gap that the Labour Party is seeking to address with a coherent framework. This has led to a policy battle within the Labour Party, between those who prioritize innovation and those who are more skeptical of the impact on jobs.
The impact of AI on the workforce is a key emerging question that needs to be addressed, with initiatives like the Martin School at Oxford and MIT’s Future of Work project providing valuable insights. The UK should aim to play a role in shaping international standards for AI, as it did with mobile phone standards in the 1980s, to ensure that new technologies are commercialized and financed effectively.
In conclusion, it is suggested that the UK should work towards a more cohesive approach to AI regulation and innovation, influenced by successful examples from the past. By engaging with the EU’s new AI framework and supporting innovation packages, the UK can position itself as a leader in the AI space and contribute to a more stable economic environment in Europe. Liz Truss’s call for an economic NATO in Europe further emphasizes the need for collaboration and strategic planning in the region.
