Guest blog: Getting digital competition right will drive growth and innovation across the UK
The UK’s tech sector has been one of our biggest economic successes in recent years, driving growth and innovation and creating jobs in every part of the country. 2021 was a record year for our sector, with tech investment nearly doubling as UK start ups raised close to £30 billion.
Crucially, our sector’s growth is not just in London. Of the 29 new unicorns created in 2021, 35% are outside of the capital. And now the combination of new tech companies emerging in all regions and hybrid working means it’s never been easier for companies to access the talent they need, no matter where they are based. Tech is not just an economic success story, it’s a levelling up success story.
The growth we’ve seen has meant jobs are being created in all parts of the country - with 50% of digital job vacancies now available outside of the South East. This speaks very much to Zoom’s own experience since the start of the pandemic, with our UK headcount having grown more than fivefold. I was pleased to share insights about Zoom’s rapid growth and talk about our future plans to invest in the UK on a panel with the Digital Minister, Chris Philp, at TechUK’s recent inaugural Tech Policy Conference, which we proudly supported as headline sponsor of.
At the conference, Minister Philp set out the Government’s ambitions to grow the tech sector in the years ahead. His Department’s new Digital Strategy sets out a positive vision that can drive growth, alongside a commitment to reform regulation to improve competition. These new measures will be vital if we are to allow new companies to emerge, with genuine competition driving innovation and growth.
Innovation in our sector is happening all the time and transforming how we do business. For example, Zoom Business Plus and Zoom Enterprise Plus users have access to our brand new live translation feature, which transcribes your virtual meeting conversation into one of 11 different languages. We think this has the power to absolutely transform how people communicate across borders. By tearing down language barriers, our latest innovation will enable users to do business in different languages, boosting trade and exports.
However consumers will only benefit from the latest innovations, whether by Zoom or anyone else, if our digital markets are genuinely competitive. When companies aren’t able to compete (which the Digital Markets, Competition and Consumer Bill will seek to address by updating rules to better address competition in digital markets) it leads to higher prices, barriers to entry for entrepreneurs, and less choice for consumers. In short, consumers, businesses, and the economy all lose out.
The Government has committed to a new regulatory approach to make digital markets more competitive. Getting this right will transform the tech sector and unlock even greater opportunities for growth and innovation. To harness this potential the Government must work with challenger companies as they develop their new pro-competition regime for the digital economy, putting them in the best place to succeed.
Improving competition within the digital economy is right and necessary but the Government should also practice what they preach in how they buy services. This means reforming the procurement system and ensuring that a greater number of challenger businesses are able to support the delivery of public services. Procurement has become too reliant on a small number of suppliers, with just 28 suppliers receiving a fifth of all procurement spending in 2017. The Government is right to introduce a new Procurement Bill that will open up the system to a greater number of challenger companies.
A more open and competitive procurement regime will allow companies to drive greater innovation in delivering public services, while ensuring that a small number of incumbents do not become entrenched. This will improve the quality of public services while delivering value for taxpayers’ money. The Government must now work with businesses in all sectors, including tech, to deliver these reforms.
The tech sector has experienced record growth in challenging economic times and the Government’s support for the sector will have an important role in accelerating it. But if we are to continue to see the levels of job creation, innovation, and growth that have been hallmarks of UK tech, the sector must be made genuinely competitive in both the public and private sectors, breaking down barriers to entry in the interests of consumers, businesses, and the whole economy.
Drew Smith, Government Relations Manager, UK & Ireland at Zoom Video Communications.
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