Now Brexit is done, what should the Government’s priorities be for UK tech?
The UK-EU Trade and Cooperation Agreement marks the end of an era. The uncertainty over what kind of relationship the UK will have with the EU is over. Now the question is, how to make a success of the UK’s next chapter?
Answering this cannot just focus on what powers we can exercise now that we couldn’t before. Instead, it must focus on the actions that are needed to ensure the UK remains a top destination for tech and how the sector can support our economy and society rebuild from the devastating impacts of COVID-19.
Technology has been a vital tool for allowing the economy and society to adapt during the pandemic. As we go forward the tech sector also has a role to play in supporting the economic recovery, particularly by boosting productivity.
If we were to close just half of the UK’s productivity gap we would add an extra £250bn a year to the economy by 2025. Embracing new technology is history’s greatest tool for boosting productivity, therefore embedding technology across the economy to lead growth is vital for the UK to make a success of the post-Brexit and post pandemic period.
Over the next few months, the Government is well placed to act to achieve tech-led growth, with the upcoming Digital Strategy and Data Strategy serving as platforms for change. However achieving this tech-led growth will mean taking the initiative and creating the framework to enable the deployment of the UK’s leading digital services sector across all business types to support job creation and help repair the nation’s finances.
This is a massive task, however there are early opportunities for action, in digital services, data and digital skills.
The UK is a world leader in digital services, around 96 percent of tech sector output and 81 per cent of exports are in digital services, supporting a trade surplus of almost £100bn in digitally delivered services.
However, to fully unlock the benefits of digital services and encourage tech-led growth across the economy we need an ambitious nudging effort to get SMEs to adopt productivity boosting digital tools, this will also require financial support for SMEs where cashflow is tight.
Further growing the digital services sector means increasing investment. For example, by making it more attractive for tech companies to list in the UK, creating more investment opportunities through a review of the UK’s funding strategy, with particular focus on increasing investment outside of London, and ensuring the new National Infrastructure Bank can invest in digital infrastructure such as 5G.
We also need to look at how we regulate. This does not mean reducing standards but building a smarter approach that gives developers the confidence to think big while being supported to build high quality digital services. The UK already leads in this space through our use of sandboxes. To go to the next level the principals of sandboxing need to be extrapolated across the way we regulate with coordination, digital first principals and good business to regulator dialogues built in across the entire economy.
Data is the fuel and engine of growth for digital services. But that engine can stall if trust in the use of data is lost. Trust is enabled by having in place clear data governance rules that can drive greater efficiency and innovation, enabling increased productivity.
The good news is the UK is well placed to get this right given our history and heritage in designing and developing UK and European data protection law.
We helped design the GDPR and the high standards it provides enables consumers to use digital services with confidence that their data is secure. The UK should continue this leadership role by looking at how we evolve our existing rulebook with a focus on enabling a data governance system that encourages good data protection practices, without stifling innovation.
This can be done by examining how we rebalance the legal bases in the UK GDPR under which data can be processed, reducing the paperwork of privacy with an outcomes focused approach to compliance and taking a proportionate, risk-based approach to our data protection rules.
To support this, we need a new forum chaired by Government bringing in industry, civil society and the regulator to steer a living data protection system that can react to new technologies and developments. Ensuring our data protection rules are kept up to date based on the dual principals of trust and innovation.
Our digital services sector and use of data would be nothing without the digital skills needed to utilise these technologies. However right now we face a digital skills crisis, there are just not enough pathways into the tech sector. The UK Government estimates that we could miss out on £141.5 billion in GDP growth if we fail to close our digital skills gap.
Tackling this head on must be a priority. Jobs are going, the number of advertised vacancies in tech jobs increased by 36% between June and August 2020, more than any sector except healthcare. However, positions are being left unfilled meaning people, cities and towns are missing out on opportunities.
To address this, we need a radical focus on providing lifelong learning to help people reskill, better integrate IT and digital skills into the school curriculum, create more routes for people of all backgrounds into the sector, increase the number of STEM university places, reform apprenticeships and be ambitious in the creation of visa routes for international talent and graduates to work in the UK.
These are just the first steps. To truly enable tech led growth we must also think radically about our long-term objectives. How can tech support the shift to net zero, how to quickly complete the rollouts of full-fibre broadband and 5G, and what R&D framework can enable the UK to be consistently at the forefront of cutting-edge technologies.
We also need to settle our relationship with the EU. The trade deal will only be as good as the working relationship at the political level. Stable, good relations will not only give businesses confidence to invest but allow for data adequacy and financial equivalence decisions to be reached and maintained.
Significant challenges lie ahead, but with a clear eye on what can be gained from tech-led growth and the actions needed to achieve it there is no reason the UK’s next chapter cannot be a great success.