Why do we need a digital economy strategy?
Posted on 01/03/2017
The Government's new Digital Strategy puts digital at the heart of business
Today saw the much-anticipated publication of the UK Government’s Digital Strategy. This is the first sector-specific industrial strategy out of the blocks since the publication of a comprehensive Industrial Strategy Green Paper in January, alongside an open call for consultation.
It’s clear that the digital economy in the UK is going great guns. The figures released today show that the digital economy is growing at a faster rate than the rest of the economy and that the usual indicators of economic success – jobs, private investment and inward investment (especially from the likes of US firms such as Google and Facebook) – are very healthy.
So, if everything’s going so well, why does the Government even need an industrial strategy in this fast growing area?
This piece isn’t about to go into the crucial role of the state as risk-taker in innovation. For that, check out Marianna Mazzucato’s quite wonderful TED talk.
Instead, here are some contextual reasons for having a clear, cohesive Government plan for our digital economy:
Signalling enabling and emerging strategic priorities for the UK
The Digital Strategy is useful in that it highlights several strategic opportunities for the UK, which can encourage industrial development, research and private finance.
There are technology priorities (with associated industry, research and funding initiatives) that include:
· Immersive technologies (AR/VR)
· Artificial Intelligence
· Internet of Things
· Personal Data (with the adoption of the GDPR)
These enabling technologies are notable in that they can be applied across a wide range of industries. If you’re interested in undertaking R&D in these areas, then an upcoming Innovate UK Emerging and Enabling R&D funding competition is offering public funding.
The UK now has 4G in a lot of areas. But think what universal, super-fast, always-on, mobile broadband would do for the productivity of some of our key industries, such as finance or the creative industries. Leading the world in the next-generation of mobile connectivity (5G among other things) is a great ambition to have because it drives the take-up of a whole host of new services. This needs Government (R&D funding and regulation) to do quickly.
No citizen left behind
Rather cleverly, this particular branch of the Industrial Strategy is more than just about industry.
Instead of only focusing on business, it lays out a more ambitious plan “to create a world-leading digital economy that works for everyone.”
The Government has announced plans to work with banks, charities and tech groups to enable millions of people to be digitally literate. The UK already leads Europe at getting online and hopes that a digitally literate UK will bring increased productivity, competition and reduced costs for our public services. Co-ordination of this training can only really be achieved with Government encouragement.
A skilled workforce
For the last 20 years, the UK has been the place to go to if you wanted to build a digital start-up – especially if you are in the business of finance, media or cyber-security. Today’s strategy acknowledges the growth of these sectors (it highlights that there are more fin-tech businesses in London than in New York, for example), and is trying to figure out how, in a post-Brexit scenario, does the UK effectively grow suitably skilled home-grown talent – as well as developing new ways of being highly attractive to digital entrepreneurs in a post-Brexit world.
Getting coding into schools from Key-stage 1 is already a commitment – to be bolstered today by a new Digital Skills Partnership and after-school clubs in cyber-security. And the announcement of a review looking at whether the current Tier 1 visa system is optimal for digital start-ups, recognises that there may be more creative ways to issue UK visas. One way of doing this may be by basing applications based on start-up share equity.
Making every business digital
The Government wants to make the UK the best place to start and grow a successful digital business. Some of that comes via an existing tax regime that incentivises private investment, such as the Seed Enterprise Investment Scheme. And today’s announcement that there will be extra support such as a new fin-tech accelerator (with the imprimatur of the Bank of England) demonstrates that the Government recognises the future value of digital innovation in important sectors.
And this is essentially the key message of the Digital Strategy – that our UK digital firms are effectively business-led R&D for the nation. This is especially the case for our disruptive, digital start-ups.
Helping them to scale up and to thrive will enable other sectors to embrace the digital disruption that will make our existing economy much more productive.
There’s much in today’s publication that champions this notion and stresses that there’s potential for digital disruption to help productivity in sectors across the geographical spread of the UK – not just in London. Government initiatives such TechNorth and the Digital Catapult that have a focus on regional growth of the digital sector are central to UK success.
So how can you take advantage of today’s Digital Strategy announcements?
Whether you run a digital business or not, if you are looking for connections to finance, the research base or indeed, R&D collaborations with businesses in other sectors, we at KTN would love to hear from you. We understand the innovation landscape, have excellent connections in the digital sector and can help identify how you might use digital to capture value from your ideas.