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Self-driving cars and AI received a fillip in the budget, with a £270m investment fund for “disruptive technologies that have the potential to transform the UK economy”.

The newly-formed Industrial Strategy Challenge Fund will support collaborations between businesses and the UK science base, the Chancellor Philip Hammond announced.

The fund will invest £270m in 2017-18, he said.

The first wave of projects will include funding development of batteries for electric cars, new medicine manufacturing technologies to help get drugs to patients faster, and robotics systems used in dangerous situations such as offshore energy, nuclear reactors or deep mining.

Mr Hammond told MPs the money was to “keep the UK at the forefront of disruptive technologies like biotech, robotic systems and driverless vehicles”.

In November’s autumn statement, he announced £390m for the development of electric and autonomous cars.

Of this, £100m will go to new testing sites for self-driving vehicles, on top of the £100m previously announced for trial areas by George Osborne.

It is unclear whether there is an overlap in funding between the projects. At the time of writing, the Treasury has not responded to a request for clarification.

Dr Graeme Smith, chief executive of Oxford-based driverless car technology group Oxbotica, said: “We are at a real inflection point in the development of autonomous technology.”

The company, which creates machine learning systems that allow robotic cars to learn from the mistakes of other vehicles, is involved in some of the projects that have benefited from the first tranche of funding to develop testing areas for driverless vehicles.

He added: “The UK has a number of nascent world class companies in the area of self-driving vehicles, which have a huge potential to change the world, whilst creating jobs and producing exportable UK goods and services.

“We have a head start and now we need to take advantage of it.”

Copyright The Financial Times Limited 2017. All rights reserved.
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