techUK’s in-depth analysis identifies the role digital technology must play to safeguard the UK’s economic recovery and future prosperity.
Building the Future We Need – a UK-wide report and a series of seven national and regional reports – highlights the urgent need for the UK to increase its digital capabilities to tackle the immediate challenges brought on by the COVID-19 pandemic, in addition to ensuring an innovation-led economic recovery.
The UK-wide report, Strengthening Local Digital Capital: For a Levelled-up Economy, lays out recommendations for digital technology to deliver a levelled-up economy. It highlights that policies must extend beyond the most obvious levers of broadband and digital skills to encompass issues such as digital adoption, data ecosystems, innovation funding, and investment and trade support – the set of capabilities identified by techUK that comprise an area’s Local Digital Capital.
Even partially addressing the digital capital gap by improving digital adoption and digital skills among SMEs would boost the UK’s economic output by as much as £145 billion, creating 2.7 million new jobs, and increase combined revenues among SMEs by £325 billion, according to Sage. Fully closing the gap could provide even further benefits.
Local Digital Capital
Much like the concept of human capital, each component of Local Digital Capital enables individuals, companies, and the public sector to interact and work more effectively – producing something of economic value. The strength of each of these inputs impacts the strength of the local ecosystem.
The following eight components were identified by techUK’s research as the essential inputs necessary for an area to benefit from digital innovation:
- Effective collaboration and coordination – across the public and private sectors
- Digital skills for all – skillsets that encompass everything from basic computer and internet literacy to cutting-edge knowledge about AI and quantum computing
- Digital adoption – the uptake of digital tech by firms of all sizes leads to gains in efficiency and productivity and allows for more innovation
- Data ecosystems that unlock the economic and societal power of data securely and effectively, enabling collaboration to respond and openly innovate to solve common challenges
- Digital infrastructure that provides high-quality, high-speed and resilient internet connections – essential for participating and thriving in our digitising economy and society
- Sustained access to finance and investment for firms
- Support for research and innovation to sustain growth and productivity increases
- Increasing uptake of digital platforms and electronic processes to make it easier for smaller firms to export to new markets
The report found that individual efforts to strengthen the eight components of Local Digital Capital will only deliver incremental gains – significant transformation across the UK nations and regions requires implementation in their entirety given their mutual reinforcing nature.
