Thinktank Warns High-Tech ‘Golden Triangle’ May Deepen Regional Inequalities
Research suggests that investments in new technologies like artificial intelligence (AI) are heavily concentrated in the “golden triangle” of Oxford, Cambridge, and London, posing a risk of exacerbating regional inequalities in England.
While ministers have pledged to narrow the gap between the best- and worst-performing areas, the rapid adoption of generative AI and automation could work against this goal, warns the Institute for the Future of Work (IFOW).
A new “disruption index” developed by the think tank reveals that funds for high-tech innovation in England have predominantly flowed into a small geographic area in the south and east.
The report highlights that the concentration of hi-tech investments in a few small geographic areas significantly impacts the prospects of the larger remaining parts of the country.
According to the authors, both public and private sector investments have followed a similar pattern, and the geographically concentrated nature of these investments has “tightened” over the studied period.
Lead author Bertha Rohenkohl commented, “While it may be true that the UK has the highest levels of hi-tech investment in Europe, this is only the case in two, three, or four specific locations, not on a national average.”
These areas encompass inner London, the home counties of Berkshire, Buckinghamshire, and Oxfordshire, as well as East Anglia, which hosts the hi-tech hub of the University of Cambridge.
From autonomous delivery robots assisting with shopping to AI tools aiding lawyers in reviewing extensive case law, automation and advanced language models like Chat GPT are already revolutionizing numerous roles.
Certain economists posit that these advancements may be considered “general-purpose technologies” with broad-ranging impacts on the economy, akin to the advent of electricity or the introduction of train travel.
Prof Philip McCann of the Productivity Institute at Manchester University said the research underlined the importance of government intervention to ensure that the benefits of this transformation were fairly shared.
He suggested the concentration of political power in the UK was partly to blame for the skewed pattern of investment.
“The UK is still extraordinarily centralised, and has been becoming more centralised over the last 40 years, whereas the rest of the industrialised world has been doing precisely the opposite,” said McCann, who collaborates with IFOW.
One issue is that all the signals in the state—institutional, political, legal, public policy, and so forth—have consistently indicated, “This is where you should invest your money,” creating a cumulative process.
He called on the government to decentralize skills and employment policy to the local level, enabling regional economies to prepare for new technologies.
The researchers gathered data on the location of investments, including venture capital, research and development, and new patents. The complete dataset is only available up to 2020, but Rohenkohl mentioned that more recent data for some factors supports the bias they identified.
“Based on the trends we’re observing, I anticipate that we will observe even greater inequality in more recent years,” she commented.
The report also introduces a “readiness index” designed to identify areas with the necessary conditions, including skills and infrastructure, to support high-tech investment.
The results indicate that regional disparities in this regard are less pronounced, suggesting that the current investment pattern may not be inevitable.
The Labour party has pledged to ensure that AI “benefits everyone” if it wins the general election, although it is still developing a detailed strategy.
Peter Kyle, the shadow secretary of state for science, innovation, and technology, stated at techUK’s policy conference last month, “New technology has the potential to enhance our democracy if used wisely. The prosperity and employment opportunities resulting from advancements in science and computing power could address regional inequality, if we choose to do so.”