When the UK’s new Chancellor Rishi Sunak announced his first budget in March (the first one of many that have subsequently followed) one interesting note was that the UK plans to spend USD1bn on its own ‘moonshot’ agency to fund cutting edge research, development and technology. The idea is to create a blue skies fund that can invest in crazy and high-risk research where the likelihood of failure might be higher than commercial backers would be comfortable with. These in turn may lead to major breakthroughs in areas such as molecular biology and quantum computing. Sunak said the agency would be a UK version of the US government agency Advanced Research Projects Agency (ARPA) which amongst other things lead to the foundation of Silicon Valley.
ARPA was set up in 1958 by US President Dwight D Eisenhower in response to the Soviet Union’s launch of the first Sputnik satellite. At the time ARPA's main mission was pivotal investments in breakthrough technologies for national security.
The UK version of ARPA is the brainchild of Dominic Cummings, the UK Prime Minister's most trusted and influential advisor. Indeed, it has been reported that his WhatsApp profile apparently listed his priorities as ‘Get Brexit done, then ARPA’. Cummings correctly argues that even though a great many of ARPA’s projects failed, the ‘trillions of dollars of value’ its successes created justify the investment.
The formation of a moonshot agency will go hand in hand with the chancellor’s promise of increasing the UK's spend on research and development to USD28bn a year, with the goal of increasing the UK’s spend to 2.4% of GDP, the average that the US and China spend and ahead of 2.2% average spent globally (although still well behind Japan at 3.14% and South Korea at a massive 4.29% of GDP). As Sunak said ‘We are a country of Newton, Hodgson, and Turing’ adding, ‘Ours is a country of ideas, invention and discovery and is truly a national history... To compete and succeed over the next decade and beyond, we need to recapture that spirit’.