DSIT is gone — so what does BIST mean for the tech sector?

Andy Burnham has got his feet under the desk in Downing Street, after a month and a half as prime minister. Yet one of his biggest acts so far in Number 10 occurred during his very first week. The decision to break up the Department for Science, Innovation and Technology (DSIT), despite the protests from the tech sector, stands out as one of the biggest tech decisions of short premiership. With the old department’s responsibilities redistributed between the new Department for Business, Innovation, Science and Trade (BIST), Department for Digital, Culture, Media and Sport (DCMS) and the Cabinet Office, change has been the main order of business.

At first glance, this may look like a return to familiar territory: with the ‘‘Digital’’ brief moving back into DCMS and the old Department for Business and Trade picking up the Science and Innovation portfolios. Yet precisely what has changed this time is important.

What this means for industry

With a change in technology remits between departments just over three years after DSIT was first formed, businesses can be forgiven for finding it hard to keep up. An expanded DCMS will have now responsibility for telecoms, digital transformation, digital inclusion and online harms. The newly formed BIST Department will take charge of cyber, innovation and regulation — with responsibility for AI shared between BIST and the Cabinet Office.

Most intriguingly, Kanishka Narayan MP (Labour) remained in his position as minister for AI — and also received a promotion to the Cabinet — signalling just how vital Number 10 sees the issue. Indeed, Narayan called his appointment a sign of the prime minister’s ‘‘deep commitment to AI’s importance’’. With peers recently calling for the Cyber Security and Resilience Bill to include an amendment allowing the government to deactivate powerful AI systems and switch off data centres, on national security grounds, expect this to be a high-priority sector for the government.

In a way, redistributing the tech portfolio across other departments reflects the way technology is increasingly integrated across all parts of businesses and the economy. Almost every business depends on digital infrastructure, data, software, online platforms, cyber resilience and, increasingly, AI to operate and compete. At the macro level, Burnham is also hoping a new governance framework for science and innovation policy will reprioritise the role of emerging technologies in helping boost lax productivity, investment and growth.

However, any big machinery of government changes bring uncertainty as officials, policy portfolios and ministers take time to learn where they fit in the new structure and departmental objectives.

We’ve identified several initial steps companies can take.

1. Early engagement is critical – With so much in flux, these next few months will be pivotal for introducing your business and making the case for how you can contribute to the new-look government’s priorities.

2. Educate new stakeholders – DSIT’s responsibilities have primarily been given to BIST, so many BIST members will be taking on new remits which have yet to be fully defined. For every Kanishka Narayan MP, there is another minister — like Minister of State for Science, Innovation and Investment Chris McDonald MP — discovering the parameters of a new portfolio (say, for scale-ups or tech investment) on the job. Engaging these new ministers offers a chance to show your company’s potential to support growth and the broader agenda.

3. Build relationships with new civil servants – As is inevitable when a former department is dismantled, civil servants will either find themselves without a bureaucratic home or else with new portfolios to take on. As such, there is an opportunity to forge relationships with new appointees and officials. Former DSIT Permanent Secretary Emran Mian, for instance, has not yet had a new role confirmed; and it remains an open question whether Interim BIST Permanent Secretary Amanda Brooks will stay on.

Split agendas within BIST?

One of the potentially most significant changes is the now-stronger connection between science, innovation and business, as policy priorities, in the government’s strategy. Whilst this can be a positive move by allowing tech companies access take a more visible role in business and innovation discussions, giving tech companies access to a wider funding pool and gaining access to more policy opportunities, it may also bring challenges as the tech sector competes for space within BIST as it takes responsibility for the science and innovation portfolio and for emerging sectors. At the same time, the department retains its prior responsibilities for business and trade.

One of the advantages of the creation of DSIT was the space and access it gave the tech sector. Each department has a limited amount of ministerial and legislative time and one key benefit was that DSIT allowed dedicated resource for tech sector developments and often had ministers with a strong interest in science, innovation and technology to drive it forwards. It is now increasingly likely that the tech sector will be competing for resource, ministerial and legislative time with the rest of the wider department. For example, the tech-related legislation will now either mean an existing priority within BIST is delayed or, and potentially more likely, tech-related developments will be attached onto pre-existing pieces of legislation. This is something we are already seeing in Parliament, with VPNs and online safety being brought into the debate around the Children and Wellbeing Bill and measures to tackle AI being put forwards as part of the Cyber Security and Resilience Bill.

However, one of the ongoing challenges for the tech sector is the continually cross-departmental nature of the policy areas. Even with DSIT as a dedicated department, the majority of policy areas involved some overlap with other departments. For example, the Digital Competition Bill was co-sponsored by DSIT and DBT. This cross-Whitehall work is likely to remain with the new structure, and we expect there to be significant collaboration between BIST, DCMS and Cabinet Office across the tech portfolios. For example, AI policy sits within the Cabinet Office, with some responsibility in BIST, reflecting the role that AI will play across businesses and the wider economy. However, DCMS is also likely to have a strong role, partially due to its digital brief and overall responsibility for tech policy, but also due to the creative industry angle and the continual debate regarding AI and copyright.

This is reflected in many BIST ministers’ having cross-departmental responsibilities. For example, Parliamentary Under-Secretary of State for Reindustrialisation Blair McDougall MP sits in both BIST and the Department for Energy Security and Net Zero, acknowledging the role that science and innovation play in core net zero policy areas such as grid nationalisation and clean energy. The same is true for Chris McDonald MP, who has split responsibilities between BIST and the Department of Health and Social Care, reflecting the overlap with science, innovation and healthcare and directly reflecting some of the Prime Minister’s priorities regarding the role of technology in delivering social care and better public services

Similarly, some of the DCMS ministers are cross-departmental, with portfolios spanning DCMS and BIST. This is likely to reflect the interactions between key legislative measures and the relevant industry implications such as online safety measures applying to a wide range of businesses and the wider regulatory environment.

As is inevitable with any major restructuring, there will tension between different sectors now competing for bandwidth under new or revamped departments. Yet instead of seeing these industries as competing with each, it would be wiser to view them as complementary: with science and technology being viewed as a key way of helping UK businesses to innovate and grow internationally. By placing science, innovation and emerging technologies at an earlier stage in the policy making process and within one department, the tech sector has the opportunity to inform and engage with policymakers and potentially champion the benefits and opportunities for the sector. For example, advances in science, research and digital technologies can strengthen businesses across the economy, from manufacturing and life sciences to financial services. Working in tandem can forge powerful synergies.

Conclusion

The creation of BIST and the dismantling of DSIT represent more than just a reshuffling of Whitehall. It signals a new approach to the science and technology sectors and how these can support government efforts to boost growth. For the tech sector, there will inevitably be uncertainty as new teams, ministers and civil servants settle into their roles.

But the change presents an opportunity. The government’s success will depend on ensuring that the priorities of BIST, DCMS and the Cabinet Office work in harmony. Businesses should engage early, build relationships across departments and demonstrate how technology can support wider ambitions for productivity, investment and growth.

Ultimately, the reorganisation will be judged not by the structures but by the bottom line: ie, in the innovation, scale and competitiveness experienced on the ground by UK businesses and their constituents. The tech sector should therefore see this new uncertainty not simply as a transition to navigate but as an opportunity to help shape a new economic and digital agenda for the country.