Government’s digital strategy cannot be a missed opportunity
Why is there no British tech titan on the scale of Google, Apple or Amazon?
This is a question that has exercised the minds of those in and outside of government for some time. Many have concluded that more needs to do done if the UK is ever going to create a $1 trillion home grown tech company.
There is no lack of potential across the digital economy, from fintech to health, quantum computing to cyber security. But the result so far is that very few British startups have grown to become digital global leaders. And no UK business has come close to approaching the huge scale reached by the largest foreign based tech firms.
But tech titans have to start from somewhere, so we should think about helping more digital businesses onto their feet in the first place.
This would benefit all businesses, not just those in the tech sector. Because every part of the economy now relies on the digital sector for its continued success: for communicating with suppliers and customers; for banking; for getting products of all kinds to market.
If we didn’t know already that digital technology is critical national infrastructure, then our experience during the pandemic has proved it unequivocally.
Read more: BT taps Ericsson to provide 5G in London
Digital hit hard by the Covid-19 virus
Yet the digital sector has not been immune from the impact of the virus. As our new report shows £15bn of UK economic output that would have been created by the UK digital sector had the virus not hit is at risk of being lost, along with over 37,000 digital sector jobs and nearly 11,000 digital sector businesses. This is a serious and worrying threat.
So we need to do what we can to achieve three things: avoid these losses; enable British tech companies to survive and thrive on the global stage; and support new digital startups. It is key to have the right support, policy and regulatory environment. In short, we have to make Britain the best place in the world to start and build up a tech company.
The pandemic already seems to have been a spur to the creation of new digital startups, with more than 160,000 new businesses registered between April and June.
Of course, we know that when unemployment spikes, so does self-employment, with people setting up their own businesses. Many of these new businesses are in IT, web design and other digital fields, and more still will be tech-enabled. So we’re not expecting all of these to become tech titans, but we should be working hard to support and nurture them nonetheless. Because who knows? Some of them may well go on to become global players.
To give this next generation of British entrepreneurs the best chance to succeed, grow and become employers in their own right, we need to ensure they have the right digital skills – and access to a workforce with the right digital skills, too.
Read more: The fastest-growing startups in the United Kingdom
5G rollout will be vital to success
If we want our companies to be able to operate in the global fast lane, they have to have access to the latest digital infrastructure led by 5G and backed up by full fibre. 5G is likely to be a primary catalyst for business productivity gains over the next decade in every sector.
The upcoming Digital Strategy is a perfect opportunity for government to commit to “levelling up” the UK through investment in skills and infrastructure.
Doing so will help businesses – large and small right across the UK– to realise their full potential. Recent polling by Vodafone of 1,200 SMEs across Europe suggests that small businesses that were able to adopt new digital ways of working have fared better during the pandemic than less tech-savvy firms. In fact the most digitalised firms won new business at more than double the rate of the least digitalised. Quite simply a more digitally enabled workforce is key to the economic recovery prospects of every local area in the UK.
We also need a regulatory environment in which UK tech startups can thrive in a global market filled with a few very large firms that act as “Digital Gatekeepers”. If we want smaller companies to grow and compete, we need the kind of pro-competitive regulatory regime which the Competition and Markets Authority is recommending.
Everyone starts small.
Google started in a garage. In 1982, Vodafone was a small startup based behind an Indian restaurant. Britain’s first tech titan might now be no more than two laptops on a kitchen table. But with the right conditions in place, there is no limit to what it can become.