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June 13, 2022updated 14 Jun 2022 9:10am

UK unveils new strategy to grow its digital economy

The strategy aims to accelerate the UK's digital economy but lacks 'long-term vision' says techUK.

By Pete Swabey

The UK government has unveiled its long-awaited digital strategy, designed to bolster the country’s digital economy. The new UK Digital Strategy could increase the UK tech sector’s contribution to the economy by £41.5bn by 2025, and create 678,000 additional jobs, the government claimed.

A woman is referring to UK tech strategy data in a presentation.
The technology industry trade body techUK said the strategy is a ‘missed opportunity’ to tackle some of the UK’s gravest challenges. (Photo by Solstock/iStock)

The UK’s digital sector contributed £151bn to the country’s economy in 2019, according to the strategy, and accounted for 9% of the national workforce. Other achievements include having Europe’s largest data economy, more VC investment and unicorns than France and Germany, and the lowest corporation tax in the G7, it said.

A recent assessment by the OECD found that the UK’s digital strategy is the second-most comprehensive in the group, behind only Switzerland.

But more needs to be done, said DCMS minister Chris Philp in his foreword to the strategy. “I want us to go further and to go faster,” he said.

UK digital strategy: six areas for improvement

The UK's new Digital Strategy - its first since 2017 - focuses on six areas for improvement. These are Digital Foundations, which include infrastructure, data and regulation; ideas and intellectual property; skills and talent; finance and investment; levelling up; and 'enhancing the UK's place in the world'.

Much of the strategy reiterates previous announcements, and underscores the government's commitment to a 'pro-innovation' approach to regulation.

Newly announced initiatives include a new Digital Skills Council, that will provide a "focal point between government and industry to address the digital skills shortage and quality deficit in the UK". The Council is co-chaired by Philp and Phil Smith, formerly UK CEO of Cisco and currently chairman of IQE, a semiconductor wafer manufacturer.

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The government also announced a review into the 'future of compute'. "This government foresees a world where nearly every aspect of business and research is transformed by some aspect of compute – big, small, complex, or simple," it said. "It is therefore important that we review the UK’s future compute needs at this crossroads of a new generation of compute."

The review aims to identify the country's future requirements for compute capabilities as well as "cost-effective, future-facing interventions".

Also unveiled alongside the UK digital strategy was the second iteration of its digital identity trust framework. Instead of a single, state-backed digital identity scheme, the UK is building a framework to enable an ecosystem of private digital identity providers. 

Since publishing an 'alpha prototype' of the framework last year, "we have worked with over 250 organisations across civil society, industry, standards bodies, and academia to test whether we’ve got these rules and standards right," said digital infrastructure minister Julia Lopez in a statement.

Changes in the 'beta' version of the framework include new requirements for security and biometrics, and refinements to the roles that identity providers can fulfil within the ecosystem. The government also confirmed that it will lead a review into its semiconductor strategy later this year.

Industry reaction: 'missing a longer-term vision'

techUK, the trade body that represents technology suppliers, described the strategy as a "missed opportunity". The document is too short-term in its focus, it said, "with the majority of actions listed already happening or set for completion on or before 2024/25".

"The strategy is also missing a longer-term vision or statement of intent about the role that digital technologies could play in tackling the systemic problems that face the UK," techUK added. "For example, the UK’s historically low economic productivity, how to revolutionise our national infrastructure or adapting to the challenges of an ageing population."

The strategy's reiteration of the government's 'pro-innovation' stance on digital regulation may further alarm privacy groups. Today, 30 civil rights groups including the Open Rights Group, Privacy International and Liberty accused DCMS of excluding them from its consultation on the Data Reform Bill, its post-Brexit plan for the UK's data laws.

Read more: UK government lays out 21-point ‘roadmap’ for digital transformation

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