Joint letter to the Chancellor of the Exchequer: Scaling digital adoption to strengthen the UK economy
techUK has led a coalition of tech businesses, think tanks and trade associations urging the Chancellor to take bold steps in supporting SME’s to digitise through a joint letter ahead of the Autumn Statement on 22 November.
You can find a link to the letter and the letter itself below, which was included in the Financial Times
Digital Growth Grant to scale digital adoption to strengthen the UK economy
Dear Chancellor,
Ahead of the Autumn Statement, we are writing as leading technology businesses, think tanks and industry representatives to encourage the Government to support investment in digitalisation by offering enhanced tax reliefs for expenditure on digital services. We recommend an enhanced support of 140% on the first £50,000 of expenditure on productivity enhancing digital services which equates to an additional 40% versus standard business expenditure (net 10% support to a maximum of £17500 tax deduction). This will empower small and medium-sized businesses (SMEs) to embrace digitalisation and harness emerging technology, such as AI, to become more productive and grow sustainably.
Digital products and services make a significant contribution to the UK economy, generating £392.9 billion in 2020.1 Despite this, the UK is underperforming on the adoption and use of digital technologies compared to our international competitors. Research from Be the Business shows that while UK companies put significant importance on management and technology adoption, we invest less than our G7 counterparts.2 92% of SMEs say technology is vital to their survival, yet these businesses only plan to increase technology investment by 13%, below the European average of 18%.3This also comes at a time when SMEs are experiencing rising overheads, inflationary pressures and low cash balances.
Falling behind on digital adoption also means falling behind on the coming wave of AI deployment across the economy. Unless we can correct this, economic growth, competitiveness, and the ability to become a science and technology superpower is at risk.
As you know, the link between digitalisation and productivity is well-established. The Enterprise Research Centre found that, three years after adopting digital tools, productivity increased when measured via sales per employee, for example, CRM systems boosted growth by 18%. Generative AI has also shown to increase productivity at work by 14%.
With the Global Investment Summit fast approaching, there is a golden opportunity to ensure that the UK does not lose momentum around tech adoption, needed to drive investment. This is crucial if we are to remain competitive and in line with other OECD countries. The digital economy is the key growth sector and will help to deliver a new generation of enterprise, tech start-ups and innovation.
Therefore, we encourage you to send a clear signal to the tech sector by supporting SMEs and underpin tech investment through a simple digital adoption incentive scheme, like the Technology Investment Boost in Australia. It is a net win for the UK, with economic modelling proving that if SMEs unlock the full benefits of technology, an extra £232bn per annum could be added to the economy.4 Such an intervention would also provide a needed boost at a time when increasing growth and business productivity is vital, particularly to help reduce inflation and prevent the UK falling behind other hi-tech nations.
We look forward to hearing from you.
Yours sincerely,
Julian David, techUK, CEO
Signatories to the letter include:
- techUK
- The App Association
- eBay
- Enterprise Nation
- Gemserv, a Talan company
- Sage
- HP Inc
- North East Chamber of Commerce
- SAP UK Ltd
- ScotlandIS
- ServiceNow
- Shopify
- Tech London Advocates and Global Tech Advocates
- Zoom
1. Office for National Statistics (ONS), released 24 May 2023, ONS website, UK Digital Economy Research: 2020. https://www.ons.gov.uk/economy/economicoutputandproductivity/output/datasets/ukdigitaleconomyresearchdata
2. Be the Business G7 Productive Business Index
Julian David
Julian David
Julian David is the CEO of techUK, the leading technology trade association that aims to realise the positive outcomes that digital technology can achieve for people, society, the economy and the planet.
Julian led the transformation of techUK from its predecessor Intellect in 2014, putting an increased focus on the growth and jobs the technology industry offers in a global economy. He has since led its impressive expansion driving forward the tech agenda in key areas such as skills, innovation, business success and public sector transformation. He leads techUK’s 90-strong team representing a thousand British based tech companies, comprising global and national champions and 600 SMEs. In 2020, techUK joined forces with TechSkills, the employer-led organisation that aims to improve the flow of talent into the digital workforce and open up access for all to high value tech jobs.
Julian represents techUK on a number of external bodies including the Digital Economy Council, the National Cyber Security Advisory Council and the Department of Business and Trade’s Strategic Trade Advisory Group. He is member of the NTA Advisory Board of DIGITALEUROPE and is a member of the Board of the Health Innovation Network the South London Academic Health Science Network.
Julian has over thirty years of experience in the technology industry. Prior to joining techUK, he had a series of leadership roles at IBM including Vice President for Small and Medium Business and Public Sector. After leaving IBM he worked as a consultant helping tech SMEs establish successful operations in the U.K. His personal interests include Football (West Ham, Balham FC and Real Madrid) and Art.
- Email:
- [email protected]
- Twitter:
- @techUKCEO
Neil Ross
Neil Ross
As Associate Director for Policy Neil leads on techUK's public policy work in the UK. In this role he regularly engages with UK and Devolved Government Ministers, senior civil servants and members of the UK’s Parliaments aiming to make the UK the best place to start, scale and develop a tech business.
Neil joined techUK in 2019 to lead on techUK’s input into the UK-EU Brexit trade deal negotiations and economic policy. Alongside his role leading techUK's public policy work Neil also acts as a spokesperson for techUK often appearing in the media and providing evidence to a range of Parliamentary committees.
In 2023 Neil was listed by the Politico newspaper as one of the '20 people who matter in UK tech' and has regularly been cited as a key industry figure shaping UK tech policy.
- Email:
- [email protected]
- Twitter:
- @neil13r
- Website:
- www.techuk.org/
- LinkedIn:
- https://www.linkedin.com/in/neilross13/
Audre Verseckaite
Audre Verseckaite
Audre joined techUK in July 2023 as a Policy Manager for Data. Previously, she was a Policy Advisor in the Civil Service, where she worked on the Digital Markets, Competition and Consumers Bill at the Department for Science, Innovation and Technology, and at HM Treasury on designing COVID-19 support schemes and delivering the Financial Services and Markets Bill. Before that, Audre worked at a public relations consultancy, advising public and private sector clients on their communications, public relations, and government affairs strategy.
Prior to this, Audre completed an MSc in Public Policy at the Korea Development Institute and a Bachelor's in International Relations and History from SOAS, University of London. Outside of work, she enjoys spending time outdoors, learning about new cultures through travel and food, and going on adventures.
