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Policy / Digital economy

Competition for funding stifles digital collaboration in UK regions

techUK's new local digital capital index calls for greater collaboration, but competition for valuable government funds makes this tricky.

A new framework assessing the strength of tech across the UK regions was unveiled by trade organisation techUK this morning. The report, which ranks the regions on categories such as investment, R&D activity and infrastructure, also makes a set of recommendations for improving collaboration between digital hubs. However, putting these into practice could be tricky in an environment where different areas compete against each other for funding and investment.

The Local Digital Capital index has been created to help “understand and measure the depth of local digital capital, the building blocks that make up a strong technology ecosystem,” said techUK in a statement. The results will help inform the government’s so-called “levelling up agenda”, which aims to spread investment more evenly across the country to drive economic growth.

Julian David, techUK CEO, says the Local Digital Capital index provides an "ability to measure the impact of digital technology on a specific locality" for the first time. “The index is not about playing one region off against another," he says. "It is a tool that we want local areas to be able to use to understand their own strengths, where they need to reinforce and where best practice can be found.

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"At the same time, we want this to be a tool for national policymakers, and a way of making the case for investing in regional digital economies as a part of the levelling-up agenda.”

How do UK regions compare on digital technology?

The index ranks 12 regions of the UK across eight categories, using existing information about the UK's digital landscape. Unsurprisingly, London and the South East are strongest when it comes to tech, and below that Northern Ireland and the West Midlands fare particularly well. Wales is the least digitally savvy of the 12 regions.

The West Midlands is fifth overall, ranking highly on infrastructure (2nd), R&D (3rd) and trade (3rd), but scoring poorly when it comes to digital adoption (12th). Rebecca Riley is business development director of the West Midlands Regional Economic Development Institute (WM REDI), a partnership between the University of Birmingham and several public sector organisations which aims to support inclusive economic growth across the West Midlands and beyond. She says the results of the Digital Capital Index come as no surprise.

"We've seen significant investment in infrastructure, driven by being a 5G testbed and driverless vehicle activity that's going on around Coventry and Warwick with companies such as Jaguar Land Rover," she says. "That correlates with what is shown in this report. I'm not surprised we score well on skills as we have the biggest group of universities in one place outside of London. The trouble we have is digital adoption."

Riley says in 2019 the West Midlands was the region with the lowest internet penetration, with 22% of its population not being online. This has changed, she says, partly out of necessity during the Covid-19 pandemic, but also investment from the West Midlands Combined Authority in initiatives such as digital boot camps. "We're now in a position where we can better compete with London and the South East [on digital adoption]," she says.

The East of England, home to two of the UK's biggest life science and technology research clusters, in Cambridge and Norwich, is second only to London in the rankings. But it is ninth in terms of infrastructure, something Chris Starkie, chief executive of the New Anglia Local Enterprise Partnership (LEP), which covers Norfolk and Suffolk, is seeking to address.

"We are committed to working with government to fulfil and accelerate its pledge to bring ultrafast broadband to all homes and businesses," he says, adding that his organisation will be "making the case for more private and public investment, and identifying and rolling out where the complementary 5G and Fibre To The Premises initiatives can address any holes in coverage.”

Can the UK's regions work together on digital?

The Digital Capital Index contains recommendations to help build the UK's digital tech ecosystem. These include establishing a nationwide chief digital officers' forum to help encourage sharing of ideas, and "deepening the understanding across the sector of where and how collaboration can support growth".

Starkie says: "The recommendations from techUK chime with our economic recovery plans in which digital job growth and improvement in our digital infrastructure are firmly embedded."

WM REDI's Riley says the report will help inform policy decisions in her region, but is sceptical about the chances of greater collaboration because LEPs and other regional bodies are all vying for the same central government investment and to attract businesses. "The problem we've got is that the way the government has structured funding is to make it competitive," she says. "So while I wholeheartedly agree with the recommendation, it's difficult to collaborate because we're all in a competitive environment."

She says links between regions tend to happen on an informal basis through personal networks, rather than in a strategic way. "We do collaborate and connect, but it doesn't happen in the most productive way that it could because of that competitive element," she says.

Matthew Gooding

News editor

Matthew Gooding is news editor for Tech Monitor.