The new Conservative government has said that its first post-Brexit Budget will focus on rebalancing the UK economy and investing in the future.
To do that, we need a digital Budget, and there is no time to waste.
The decisive General Election result has provided the Prime Minister with a mandate for ‘The People’s Government’ pursuing the people’s agenda by ‘getting Brexit done’ and investing in the NHS.
Whilst these priorities are undoubtedly key, the importance of digital connectivity if Britain is to prosper in the long-term is underlined by pledges to roll-out full fibre broadband and invest in skills and infrastructure.
These commitments have been welcomed, but digital transformation has to play a broader role if the new government is to be successful in unleashing Britain’s potential and enabling our economy to take on the challenges of the 2020s.
techUK and its members want to support the new government in capitalising on recent and forthcoming advances in technology through a three-pronged digital ‘plug in’ approach. We believe these three initiatives will enable businesses and individuals in towns and cities across the UK to plug-in to this new age of connectivity and prosper – delivering a truly digital Britain on a local and national level.
First, we must address the level of regional inequality when it comes to digital investment. Between 2015-2018, London received £9 billion in tech investment – the second closest UK city was Cambridge, receiving just £583 million. This is an unacceptably large gap, and through the already successful City Deal initiative, we have the mechanism to do something about it – with a shift in focus.
Pivoting to make funding available via the City Deal to technologies that are serving society in its quest to solve some of our biggest challenges – whether an ageing population or climate change – will drive the development of world-class digital clusters, helping other cities in the UK to close the gap with the capital, and other global cities.
Financial investment in these digital clusters must be matched by a reduction of regulatory burdens on businesses that operate in them, so they are free to test ideas in a safe and secure environment. It should also be supported with targeted tax incentives and focused immigration status – so firms can headquarter in the area, creating local jobs and attracting the best global talent to the regions, not just London.
Second, we must increase levels of knowledge. Many businesses, particularly SMEs, will lack the necessary expertise and external guidance needed to take full advantage of these clusters and the new technologies that will allow them to grow and boost productivity.
To remedy this, we propose a ‘Digital Enterprise Account’ that would aim to provide support in the adoption and roll out of basic, new and emerging digital technologies across currently non-digitised SMEs. This could include; cloud computing, new communications and collaboration platforms, enterprise software, basic adoption of artificial intelligence and digital identity technology, to name but a few.
Digital Enterprise Account services would be easily accessible through existing channels such as Local Enterprise Partnerships as well as a new online portal, so firms can access precisely the support they require.
Finally, we must act swiftly to provide businesses with the financial relief they need to grow. Productivity is already in crisis, and we are at risk of falling further behind the global leaders. Figures show that less than one-in-five UK firms are adopting internal digital infrastructure, well below the European average.
A ‘Digital Adoption Fund’, providing tax relief on the initial adoption of productivity-boosting technologies, as well as staff training costs, would provide a short-term boost to business investment among SMEs, while also providing long term productivity benefits and further tax receipts to the wider economy. In addition, the move would help promote the UK as an attractive market to larger multinationals offering relevant digital products, helping stimulate Foreign Direct Investment.
This final point is crucial, as the UK now has the opportunity to show international leadership in this field, bringing together leaders, ideas and best practice in the field from around the world. Such an initiative will allow us to leverage our current capabilities, develop new ones and strengthen international economic ties.
As the largest trade association for technology businesses in the UK, with over 850 members who collectively employ approximately 700,000 people, techUK and its members believe this is a crucial time for the UK to capitalise on the developing a national digital economy and to shape a broader inclusive digital society. These three digital ‘plug ins’ are a start, to help power Britain forward into an exciting digital age.