Mapping the production, diffusion and drivers of future technologies

We propose to map and track the state of technological change in the UK, understand its drivers, impacts and help to improve the UK's productivity record via our collaboration and engagement with industry and policymakers. We focus on the role of frontier or 'future' technologies, such as AI, robotics, clean tech, blockchain and quantum. The contribution of these technologies to UK productivity will depend on the twin channels of their production and use (diffusion), the determinants of which we will seek to model theoretically and empirically.
We will build up quantitative evidence on economic activity in the UK's 'future-technology-producing' and 'future-technology-using' sectors. First, through description - which will include both sectoral and geographical elements; and second through building evidence on the extent to which financial or skills frictions constrain investment. We are therefore addressing two of the challenges set out by the PIN workshop: understanding and improving innovation diffusion; and understanding and improving regional and local productivities. An innovation in our approach is that we will use a range of emerging databases on technology-oriented firms linked to text-based information on their activities to build a comprehensive empirical picture of the future technology sectors. We will also use these databases to track the diffusion of technologies in novel ways, and plan to conduct a survey to shed more light on the barriers to diffusion, for SMEs in particular. We will work together with leading industry and policy stakeholders with expertise on new technologies, relevant data and techniques. Our empirical exercises will be guided by a conceptual framework that will model the effect of frictions in the financial market and the labor market on innovation, diffusion and economic growth.
Our project deliverables will consistent of four main components:
1. Future sector data and measurement network: Together with our project collaborators, we will host two major research meetings involving academics studying future technologies and relevant stakeholders from policy and business (e.g. NESTA and Be the Business). The first of these would seek to bring together the key stakeholders and set the agenda for research; and the second would involve presentations of our findings and developing an ongoing research agenda. We would also hold intermediate less formal working sessions.
2. Report: Our core deliverable after 18 months will be a report containing (i) a review of the relevant literature, empirical and theoretical; (ii) new descriptive statistics of the size, geography, structure and performance of the future technology sector in the UK (comparing and contrasting with traditional SIC based estimates); (iii) a conceptual framework to inform the drivers of the production and adoption of future technologies - by building a minimalistic model, the theory will aim to guide the empirical exercises using new data we collect or consolidate; and (iv) empirical modelling of production and adoption of future technology using new firm level databases and a survey, including external (to the firm) measures of the supply of finance/skills where possible.
3. Agenda for future academic research with new co-authorships from the project team: extending theoretical work and testing its predictions using our new data, and identifying areas where additional data are required. We envisage that the project will lead to the development of at least 2 academic papers, most likely one more focused on the FTP firms, and one on the FTU sectors, with paths to causal identification.
4. Data: Where the data we are using are purchased, we will seek to provide resources and guidance for researchers wishing to build on our analysis. According to standard academic practice, we would share our own generated survey data on an anonymised basis to interested parties, via the UKDS as appropriate.

Here we set out who will benefit from our proposed research, and how.

Our work will be directly relevant for any policymakers involved in the design and evaluation of the UK's national industrial strategy and related policies, since the technologies of the future impact on and interact with all foundations and grand challenges in the UK's industrial strategy white paper. In addition to BEIS, this will include HMT, Cabinet Office, and also DfE and DCMS. The newly formed Industrial Strategy Council is currently developing metrics by which to evaluate the industrial strategy, and new sources of data and empirical relationships could be useful for informing their work. Members of our team are in regular contact with civil servants in these departments and we would seek to share work in progress and collaborate where possible. Moreover, our work will also be of relevance in the development of local industrial strategies and the GLA, is of our collaborators, are currently developing theirs. We have strong links with NESTA and IGL from our existing work, and we will seek to work closely with them in developing our ideas and approaches. Our work will also be of interest for international institutions such as the Organisation for Economic Cooperation and Development (OECD), who have begun working with some of these databases, and with whom our team have established links. Via our workshops, informal meetings and report, we hope to maximise the policy relevance and impact of our work.

Businesses are increasingly engaging with the productivity challenge - and this is relevant for the future producers and future users. Our collaborators Tech Nation and CognitionX have extensive contact with innovative firms that they support. CognitionX itself is a start-up in itself, providing an expert AI platform to other businesses, and disseminating knowledge via its annual "CogX festival". The GLA conducts SME outreach via its London Growth Hub, and will help ensure that our work remains policy relevant. Moreover, our research team has established links with "Be the Business", a new business community supported by the UK government, that is helping firms with the adoption of productivity enhancing technologies and business practices. Through these direct and indirect channels, our objective is that we can have real impact on businesses, growing the tech sector, improving diffusion and ultimately raising productivity and living standards.
Due to the scale of the productivity challenge and its implications for economic growth and the public finances, productivity is increasingly of interest to the wider public, and this is reflected by increased media coverage of the topic in recent years. We will therefore plan to reach the broader UK public mainly through writing blogs or articles and media appearances. The public can benefit from our work by gaining a better understanding of the technologies of the future, and how they are related to workforce skills. In our diffusion work, we will seek to communicate real world applications of future technologies to make them more tangible.

Finally, we seek to have impact on other academics working on these issues, through the publication of discussion papers and ultimately published articles. Via this project we will make a direct contribution to the work of the Productivity Insights Network, and also other groups working on similar issues, for example ESCOE and the What Works Centre for Local Economic Growth (the project team has strong pre-existing links with these groups). The project team is drawn from across institutions, and will help build a network of academics working on the technological change, innovation and diffusion of the technologies of the future. We will build on this through attending seminars or conferences and presenting work.