Dear Gordon, here's how to spend that £17bn

Prime Minister Gordon Brown has earmarked £18bn for investment to help UK Plc get through the economic downturn - and with only around £1bn spent so far there's still plenty of cash on the table. Speaking in an interview with The Observer, Brown revealed "digital infrastructure" is one area he's looking to invest in. But what are his options? Here silicon.com looks at five tech investments that could help the UK weather the economic storm - and sail out the other side…

1 - Switch on next generation broadband

Much head-scratching has been undertaken by politicians, analysts and industry suits about the issue of next generation broadband infrastructure in the UK, with our creaking copper wires having given us a laggard's reputation in the global broadband speed stakes.

Luckily, there are several solutions out there - which range from being very expensive to very, very, very expensive - which explains the private sector's reluctance to put its hand in its pocket and start ripping and replacing.

That said, last summer telco BT announced it will invest £1.5bn in deploying fibre to 10 million homes by 2010. But that still leaves plenty of UK households facing a fibreless future.

The government advisory group on broadband - the BSG - estimates the cost of a partial fibre deployment, taking superfast lines to the curbside cabinets, would cost an affordable £5.1bn.

The cost of a full fibre to the home deployment is still probably too steep for this fiscal stimulus - estimated at £28.8bn. That said, if the government were to commit a section of that sum, the private sector may be persuaded to add its own cash to the mix and the magic figure of £28.8bn may not be so unattainable after all.

Alternatively, the government could go for the budget FTTC option and then spend extra on next-gen wireless technologies to cover the last mile. This patchwork compromise of wired and wireless techs was recommended by a government-commissioned independent report into next-gen broadband in the UK.

As well as future proofing our national digital infrastructure, superfast broadband would also be able to give other next-gen technologies a leg up - for instance, smart metering could piggyback on the infrastructure.

2 - Create a nation of techies

Skills shortages are a perennial issue for the UK IT sector - getting enough of the right skills seems to be a problem for many employers - which all too often are reluctant to help themselves by investing in training.

Recognising the importance of attracting new blood to the tech industry, the government gave the green light for a National Skills Academy for IT last year. The Academy's aims are on the modest side, however: it hopes to train 10,000 people in the first three years of operation.

Considering sector skills body e-skills UK calculates that more than 140,000 new IT and telecoms professionals are needed every year to meet the UK's demands, 3,333 new bodies annually is not even close to being enough. The Academy is being funded by £8m of government money, matched by the same level of private investment - so think how many more techies could be trained by a government investment of even a small portion of Brown's £17bn.

If the UK is to transform itself into a knowledge economy, tech skills are going to be essential, and are already increasingly a component of more and more jobs. Moreover as the downturn bites, and more people from other industry sectors are made redundant, reskilling and upskilling these workers to invest in a future tech workforce would surely be money well spent.

3 - Become a VC

People don't stop having ideas in a downturn but the cash they need to get their start-ups off the ground dries up. That's where the government could step in to help, with measures such as tax breaks for UK-based tech start-ups, and grants supporting tech R&D work conducted on Blighty's soil.

The government is already seeking to establish a series of University Enterprise Networks in the hopes of nurturing homegrown entrepreneurs but hard cash is what's really needed to boost tech innovation and create the long term wealth associated with it - as seen in Silicon Valley.

Using the £17bn pot as a VC fund available for UK-based start-ups and entrepreneurs to bid for could be the radical move needed to encourage tech innovation.

The PM could then...

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