TRANSFORMING THE UK
TELECOMS MARKET
Forthcoming telecommunication legislation is likely to have a significant
impact on the UK electronics industry, as Dr Andy G Sellars explains
Forthcoming legislation is likely
to have a profound effect on the
UK’s telecoms market and, by
extension, the electronics companies
in the supply chain. This legislation
includes the National Security and
Investment Bill and the Telecom
Security Bill.
As a non-profit research and
technology organisation helping
UK companies develop advanced
electronics, the Compound
Semiconductor Applications (CSA)
Catapult has followed these
developments closely, consulting
widely with our industrial and
academic partners.
National Security and Investment Bill
The National Security and Investment
Bill aims to bring the UK in line with
other major economies by protecting
intellectual property and assets of
strategic national importance. The bill
had its first reading in Parliament in
July 2020, and its second reading in
November 2020.
The bill identifies 17 ‘key sectors’
of strategic national importance.
Many of these sectors are relevant
to telecoms including: advanced
materials; artificial intelligence;
communications; computing hardware;
cryptographic authentication; data
infrastructure; quantum technologies
and satellite and space technologies.
Companies operating in these
sectors must notify the Secretary of
State for the Department of Business
Energy and industrial Strategy (BEIS)
when they intend to transfer a
sizeable proportion of their assets,
exceeding 25%, to an overseas entity.
The bill gives the Secretary of State
power to intervene and block the
acquisition.
The UK punches well above its
weight in terms of research and
innovation, and has a vibrant start-up
culture. With less than 1% of the
world’s population, the UK authors
15% of the world’s highly cited
publications, and is consistently
ranked second only to the US for
Above: The National
Security and
Investment Bill is
currently passing
through the UK
Parliament
start-ups. However, there have been
cases where critical UK innovations
have been transferred to foreign
ownership and offshored, with the
consequential loss of value to the UK
economy and the loss of sovereign
access to the technology.
The author was invited to give
evidence to the Foreign Affairs Select
Committee as one of the expert
witnesses during the consultation
phase. Most questions focussed on
the balance between national security
and the UK’s economic interests.
There was some concern that the
National Security and Investment Bill
will impede inward investment for
early-stage UK companies. There was
also concern that the bill might be
used for economic protectionism as
part of an industrial strategy rather
than simply for security.
Mitigating these concerns requires
a transparent and non-bureaucratic
process. The bill will ensure that
critical UK innovations remain in UK
ownership, and it has the potential to
encourage a longer-term investment
culture, so that UK start-ups benefit
from patient capital and scale-up in
the UK.
20 26 January 2021 www.newelectronics.co.uk
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