Today’s budget included a £40 million boost to Internet of Things (IoT) research, £600 million for spectrum for mobile phone coverage and £100 million for driverless car development.

Chancellor George Osborne’s nod to “what is known as the Internet of Things” in his budget this afternoon could be transformative for the technology and manufacturing industries.

Chancellor George Osborne holds the famous red briefcase Credit Flickr/HM Treasury
Chancellor George Osborne holds the famous red briefcase Credit Flickr/HM Treasury

Osborne proclaimed: “This is the next stage of the information revolution, connecting up everything from urban transport to medical devices to household appliances.”

His comments show the government’s commitment to the concept of mass connectivity in the UK, a concept that relates both to consumer devices – like connected kettles and washing machines – as well as industrial tools like smart factory floors that can predict failure.

The concept of the IoT could be likened to the dotcom phenomenon in the 1990s, where small businesses and entrepreneurs piggy-backed on the arrival of the internet. Back then pioneers like Baroness Martha Lane-Fox, co-founder of, found themselves convincing parliament how powerful the internet would be for the UK, and the world.

In today’s budget Osborne referred to technology on six separate occasions. Although details on how the £100 million on driverless cars, £40 million on IoT research and development and £600 million on spectrum and free public wifi in areas like libraries would be spent were limited, their presence highlights a commitment to ensuring the UK keeps up with our international peers.

As BT's managing director of research and innovation, Dr Tim Whitley, says: "We are experiencing the next generation of the internet, and the UK is at the vanguard. Digitisation and the heightened connectivity of people, processes, data and things has the potential to generate value in excess of £33bn for the UK economy.

The IoT is a "tremendous opportunity in every sector and for businesses of all sizes", he adds.

It is likely that independent tech bodies like Innovate UK and techUK will be charged with slicing up the budgets over the coming year.

But even with the massive cash injection, with tech giants like Samsung, Google and Apple playing for keeps in the driverless car race, the UK will need to work hard to stand its ground.

In light of the budget announcements, the UK tech body Digital Catapult's chief executive, Neil Crockett, said: “The IoT is a key area of growth for the UK's digital economy; a factor recognised by the government with today's investment announcement.

“We are proud to be a partner in this project, enabling collaboration between innovators, organisations and academics who, together, can put the UK at the forefront of a new wave of business models that will make the UK more competitive and a better place to live. It means that the UK can be IoT leaders rather than just IoT consumers.”

Possible research projects that will receive cash:

  • Hypercat: The UK standard for the Internet of Things is working with businesses to create a protocol to solve the interoperability issue that could hold back national adoption of connected devices. Without a universal standard, devices will not be able to communicate data to each other, rendering them useless on a mass scale. The consortium's chief executive today said: "We see IoT as the natural next step in unlocking value from data to improve both citizens' lives and increase the UK's GDP."

  • Bristol’s smart city: Bristol is Open is the world’s first openly programmable city with a dedicated network that is technologically agnostic, meaning any startup can use its data for apps or public services and any device could be connected.

  • Greenwich’s GATEway project – a electric shuttle is being trialled around the Thames peninsula

  • Bristol’s Venturer project – its driverless Bobcat trial is ongoing in the city

  • Milton Keynes and Coventry’s UK Autodrive – the two cities have partnered with Jaguar Land Rover, Arup, Oxford and Cambridge University and insurer AXA to test insurance liabilities with driverless cars

Underperforming fibre - and targets are too low

Poor bandwidth will certainly prove an obstacle to the IoT, and one networking firm said today's reference to fibre is not quite up to scratch.

Greg Mesch, chief executive of network firm CityFibre, said: "For too long, businesses across the country have struggled to grow and compete, suffocated by combination of both access infrastructure and lack of bandwidth. All the evidence shows that high-speed digital connectivity is essential to the success of a country.

"We welcome the government’s ambition for ultrafast broadband, encouraging investment in faster connectivity to homes and businesses nationwide. However the target of at least 100 megabits per second is too low. As the British economy becomes more digitally based, it is vital that even faster Gigabit speeds are achieved.  

"In infrastructure terms, the UK communications market is under performing, with one of the lowest shares of fibre-connected buildings in Europe, a result of a decade of underinvestment by BT. Investment in fibre infrastructure is critical for sustainable economic growth and future prosperity. Therefore, it is vital the government does all it can to encourage a competitive environment for fibre investment."