Insight

Digital technology is on the up in the UK, but productivity stagnates

By David Lawrence |

By the end of last year, it seemed that the government was helping IT, telecommunications, and technology in the UK take a huge leap into leading the world in digital transformation. Beginning in March, there was the announcement of a digital strategy, which claimed to show how the government would turn the country into the perfect environment to attract and grow digital businesses. Then in November, an industrial strategy was announced with a commitment to infrastructure such as the expansion of 5G digital connectivity nationwide, a huge scheme to ensure every school has a qualified computer science teacher by 2020, and boosting investment into digital R&D. In the autumn budget, a massive £21 million was committed to taking the successful Tech City and Tech North projects and expanding them into regional hubs across the UK through the newly established Tech Nation.

The future of technology in the UK seemed bright, and rosy, with nary a bump in the roadmap to be seen. Dig a little deeper, however, and there are some definite causes for concern.

This week the Institute of Directors released its report titled 'Digital government and the productivity puzzle'. So while the government is ploughing strategy and money into helping the UK take the technological lead, it is failing to bring itself out of the digital dark age. The report is based on a survey of members of the institute. Over three-quarters of those surveyed considered the government to be “poorly equipped to take advantage of technology advances and automation”.

The report also showed how productivity and the take up of technology are linked. This link was also highlighted in last year’s report from the CBI (Confederation of British Industry). The UK is awash with digital disruption across all industries, but those same businesses aren’t making an investment themselves in technology, and that is subduing overall productivity.

The CBI sees the key to getting UK productivity out of the doldrums as “instead of one sector called digital – all sectors should be digital”. In other words, stop treating digital services as a separate entity and make it all a part of how business is done. An approach the government should take itself by turning to the private sector for those computing systems that it does particularly well such as online payments, data entry, and finance.

 

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David Lawrence

Written by David Lawrence

David is the founder of Vine Resources.