Ministers and MPs outline vision for digital economy

Delivering the digital strategy

Speaking at the TechUK-organised conference, digital minister Chris Philp said the digital strategy is critical to the economic future of the UK and can help deal with a range of economic issues – from wage stagnation, flatlining productivity and inflation.

“We see the growth in the tech sector and the diffusion of digital strategies and technologies across the whole economy as being a fundamental part of the answer to these economic challenges,” he said.

“The jobs that tech creates tend to be much more productive, have much better pay, encapsulate innovation and growth, and be inherently productivity creating. So by being more productive, obviously, we can reduce prices, we can produce more for the same amount of input.

“So, for all of these fundamental challenges our country and our economy faces, we see technology and the digital economy as the answer.”

Asked by Computer Weekly how inequality factors into the digital strategy – both generally (given that around one in five people in the UK live in poverty) and regionally (of the £12.4bn raised by tech startups in 2022 so far, £8.6bn went to those in London) – Philp said that there were already a number of public-private partnerships underway based around reskilling people.

“There’s a very explicit focus on digital skills and digital literacy outside of the southeast and, in particular, work with people from less advantaged backgrounds,” he said. “There’s also a massive issue with industry not being representative, for example, of women or minorities, so there’s a desire to do a lot more work there. 

“There’s 2,000 masters courses in artificial intelligence [AI]. There’s, I think, 2,000 scholarships to go with that, and those scholarships are expressly reserved for people from underrepresented backgrounds, so there are things like that [which] we can do to try and to move the needle.”

In terms of investment outside the southeast, Philp noted the UK now has a number of unicorn tech companies (those valued at over $1bn) outside of London, as well as funds such as the Northern Powerhouse Investment Fund, which Philip said had £500m of government money with “an express mandate to invest across the north of England”.

On the government’s upcoming Digital Markets, Competition and Consumer Bill, Philp added that it would be published in draft form during the current Parliamentary session before being introduced formally as soon as possible after that, so that industry has time to provide feedback on the direction it is taking.

Digital skills and the future of work

During a panel on WFH and the Future of Work, Conservative MP Matt Warman, who is leading the government review into the future of work in the UK, said that the government’s primary focus at the moment is around building up people’s digital skills: “Everything comes back to skills…you’re going to see the creeping inclusion of tech into more and more jobs, and we need a workforce that has the skills to tackle it.”

He suggested that, to make updating digital skills more appealing and less expensive for people, any training going forward should take a hybrid approach of “being partly online and partly in real life” to take advantage of the shift to working from home (WFH) facilitated by the pandemic.

Charlotte Holloway, director of government relations for UK and Ireland at Zoom and member of the TechUK board, cited a May 2022 report by the company which showed that the UK has been “a world leader in the way it adopted digital technologies”, including Zoom, during the pandemic.

“SME adoption [of digital technologies] was the highest of any G7 country, and we see the vast majority of employees want to see hybrid and or remote working continue,” she said.

However, Warman noted that there are still huge chunks of the economy for which working from home is never going to be relevant, because those jobs simply cannot be done remotely.

“Hybrid working and working from home is important, but it is a subset of flexible working, which potentially has a lot more to offer…we don’t want to inadvertently do something that exaggerates the differences between one part of the economy and another,” she said.

With the pandemic facilitating a greater shift to working from home in some sectors, Justin Madders, Labour’s shadow minister for employment rights, said “the future is hybrid” and that Labour would push the presumption that flexible working is a right, rather than something employees only have a right to request.

He agreed with Warman that “it’s really important we don’t forget all those jobs that you can never do remotely”, adding that the increasing use of AI and automation in decision-making and recruitment in companies needs to be a focus area for policymakers.

In particular, Madders noted the need for transparency, explainability and accountability when it comes to companies using AI or algorithms to make decisions regarding their employees.

On this point, Warman added that it is unacceptable for companies using algorithms in decision-making to push accountability onto the algorithm itself: “You wouldn’t allow that kind of outsourcing in any other area of business, so why should you here? The tech sector does have a frustrating and almost entirely self-defeating tendency of saying, whatever it is, ‘It’s so new and so radical it has to be treated legally differently’.”

Madders also indicated his support for a “right to switch off” – which would allow employees to ignore work-related communications such as emails and texts outside their contracted working hours – although Warman added that this would have to be done in a way that promotes flexibility for employees rather than a mandatory work cut-off time.

Maintaining EU data adequacy

On 17 June, the government published its response to a consultation on the Data Reform Bill, pledging to press ahead with a number of changes, that the government says will boost businesses, protect consumers and seize the “benefits” of Brexit.

Its proposals include clamping down what it perceives as red tape around privacy and data protection to save an estimated £1bn, while strengthening data protection standards, reforming the Information Commissioner’s Office (ICO), giving innovators and researchers more flexibility in how they use data in their work, and increasing fines for people who misuse data.

Commenting on the Reform Bill, Philp told TechUK conference attendees the government “do intend that burdens on business here in the UK will be lighter than the equivalent’s elsewhere”, claiming this would not be done at the expense of privacy.

“We’re not going to make data available to people who are going to abuse or misuse it, and we do want to achieve those legitimate and important privacy considerations in a way that poses fewer burdens, so by making the regulatory regime more principles-based and outcome-based, rather than prescriptive,” he said.

Speaking in the same session, TechUK’s director of technology and innovation Sue Daley said it was critical that the UK retain its data adequacy agreements with the EU: “That is crucial to industry, not just our industry…every industry, data crosses every industry in every sector.”

The European Commission granted the UK data adequacy in June 2021, allowing businesses to continue exchanging data with Europe, but warned it may yet be revoked should the UK’s new data protection rules diverge significantly from the EU’s.

According to Philp, however: “The way that we’ve designed these data changes have been done with the purpose in mind of making sure that adequacy can be maintained – there’s no legitimate legal or technical basis upon which adequacy might be revoked.”

He added that UK government discussions were held with the European Commission during the adequacy proposal process “to make sure they didn’t pose any legal or technical risk to adequacy… so it is our firm intention and expectation that adequacy will be maintained”.