Last year, the digital economy accounted for 14.5% of all UK service exports, at around £30bn. The UK remains a leader in digital innovation, and maintaining that status is a Government priority. Coadec, the Coalition for a Digital Economy, has released a detailed report suggesting four areas that for improvement to keep pace in the global race: skills, talent, investment and trade.
The right skills
The message is not quite “education, education, education”, but it’s a good place to start. The tech sector thrives on a stream of highly skilled people entering the market to fill its expanding needs. It currently relies on resources from overseas due to a lack of home-grown STEM skills. While data shows a sluggish take-up of traditional routes (A Level exams followed by a computer science degree, for example), there is encouraging news as innovative models such as Makers’ Academy and digital apprenticeships thrive. Coadec suggests a large expansion of apprenticeships to direct funding towards these institutions to boost the number of new, skilled entrants to the job market.
The right people
Some startups put single-hire costs at £6,000, with much of this spent on immigration procedures. The time and expense of hiring would be better used elsewhere, and until the UK is self-sufficient in skills it must be able to access and attract talent from around the world. Coadec suggests creating a new visa of at least six months to run alongside the Tier 2 visa for alumni of certain leading institutions or for people with demonstrated expertise in sought-after programming languages. It also proposes allowing VCs and larger businesses to sponsor visa applications on behalf of startups.
The right investment
Brexit will fundamentally alter funding for businesses. To keep up with the rest of the world, says Coadec, Government will need to collaborate with the European Investment Fund (EIF) while committing to at least the current levels of funding. Tax reliefs for corporates creating jobs and support for regional startups could help prevent stagnation, and feed growth in the regions as well as in London.
The right trade
The General Data Protection Regulation (GDPR) will directly impact the UK despite Brexit (more on that in our GDPR infographic). Once it leaves the EU, the UK would need an "adequacy decision" from the EU to allow European personal data to be processed here. Coadec suggests this obtaining this seal of approval will be critical, as legal complexities of failing to secure it would be a huge burden to startup and scale-up businesses alike. The report concludes that digital industry has not been served well by current trade deals. Bilateral agreements, for example through working constructively with President Trump’s administration will be important to the sector’s future trading position.
The Coadec report has received cross-party support. The Government's recently published Digital Strategy recognises that continued development in the digital arena will need stronger home-grown skills, fresh international talent, R&D investment and high standards of data protection. Startups and scale-ups particularly should watch this space to see how policy evolves.