Will Budget 2021 make or break Britain's digital future?

Every crisis presents an opportunity -- a truism never more evident than in Chancellor Rishi Sunak’s latest investment into the UK’s digital landscape.

For years, the UK economy has faced a fundamental problem; we have more need for highly skilled digital professionals and leaders than we have workers to satiate that demand. Recent research from Microsoft found that the vast majority (69 percent) of UK business leaders believe their organization currently has a skills gap, with a significant 44 percent fearing that this will have a negative impact on their success in the next year.

However, the Chancellor now has an unmissable opportunity to build a Britain fit for the future, and must ensure tech is at the heart of it. The onset of a global pandemic driving the majority of SMEs into remote work has made the digital skills gap impossible to ignore and has built consensus through experience that significant and immediate investment is a necessary step to bring the whole country up to speed in a new digital age.

For organizations without the digital leaders, appropriate software or up-to-date tech required to maximize productivity and profitability in an increasingly tech-based economic landscape, the race to digital has felt like more of a marathon than a sprint.

The announced measures include investment in flexible training schemes and apprenticeships, fast-tracked 'tech visas' for highly skilled digital workers and entrepreneurs, and £520m of investment directed towards ensuring that small businesses have the equipment and knowledge they need to keep growing and innovating.

In his announcement last week, Sunak commented "Our brilliant SMEs are the backbone of our economy, creating jobs and generating prosperity -- so it’s vital they can access the tools they need to succeed."

It’s a promising statement -- but do the measures match up?

A hybrid future

In what has been a uniquely challenging year for businesses large and small, inefficiencies came to light that employers struggled to resolve in the face of the overnight disruption of lockdown. Outdated or obsolete digital structures made remote work challenging for many, leaving some on the wrong side of a digital divide.

Exploring this issue, Studio Graphene commissioned a survey of more than 900 UK workers in the summer of 2020 to uncover their personal experiences of the transition. Of those, 24 percent had found the transition to working remotely difficult due to feeling uncomfortable or insufficiently trained in using certain technologies. We also found that over a quarter (27 percent) of workers felt their employer should have provided a higher level of skills training. This highlights the necessity of improving skills training and digital literacy to bring the whole workforce onto a level playing field.

Closing the skills gap

As employees increasingly adjust to their new remote settings, it is becoming clearer that remote working is here to stay in some shape or form. As such, any measures to tackle the workforce skills gap must be focused on meeting the needs of workers at every level of an organization, as we continue on the path towards a 'hybrid' working environment.

Accordingly, Chancellor Sunak has announced the Help to Grow scheme, which will support SMEs in updating their software and systems, streamlining their operations and providing more than 100,000 small enterprises with the means to increase productivity and more adequately support their staff. Further measures such as training for management and a 50 percent discount on the costs of investment in digital infrastructure denote a long-term and sustainable model of leveling-up SMEs for a new digital economy. Providing more information about appropriate tools to leadership within small business will certainly help to overcome the information gap that has in the past led to a lack of investment and little interest in maintaining up-to-date tech.

Business leaders will also be heartened to hear of plans to review R&D tax relief to potentially include data and cloud investment. This double-edged subsidy will provide timid SMEs a reason to finally invest in more innovative, and more productive tech solutions.

At the other end of the hierarchy, the planned £126m investment into trainee schemes and flexible apprenticeships will go some way to assuaging younger workers’ concerns about lack of training and insufficient development support in remote work settings -- and will also provide those starting out in their careers with a practical pathway to becoming highly skilled. Until now, the appetite for dedicated tech training has been strong, but there has been a sense that the UK Government was dragging its feet in terms of delivering practical options for upskilling: indeed, two-thirds (67 percent) of the business leaders surveyed in the aforementioned Microsoft study feel there should be greater government investment in digital skills training and education. Promisingly, the majority (59 percent) of employees are eager to improve their digital skills, so dedicated schemes like these should go some way towards providing new opportunities.

Needless to say, a 'one size fits all approach' by the state will not remedy the issue – as not all employers and cohorts of employees have struggled for the same reason. However, the approaches taken to make the transition smoother are a strong first step and empower SMEs to take their own people-led approach to suit the needs of their workers.

Finding the solutions for today

There’s plenty of room for optimism about the long-term future of tech in the UK, but what about the short-term? Demand for digital skills and services still far outpaces supply, and new tech leaders won’t simply crop up overnight. With a lethargic economy in need of fresh impetus and new ideas to recover from recent challenges, the Chancellor’s gamble on tech becoming the cornerstone of the post-Covid economy needs to start paying out quickly. Because of this, I also welcome the promise of fast-tracked 'tech visas' for entrepreneurs and highly-skilled digital professionals, which will allow businesses to access the talent needed to kickstart their productivity today, instead of waiting for tomorrow.

In all, the Chancellor’s latest tranche of reforms and investment schemes demonstrate a recognition of the urgency with which the UK should take advantage of the opportunity to deliver growth, productivity and profitability as the global market begins to reopen. A digitally literate workforce, and businesses with confidence in their systems, could be the making of UK’s digital future.

It will all come down to the detail, but the broad strokes of this wave of investment suggest the government is finally prepared to capitalize fully on the potential of digital.

Photo Credit: IR Stone/Shutterstock

Ritam Gandhi, is the Founder and Director of Studio Graphene – a London-based company that specialises in the development of blank canvas tech products including apps, websites, AR, IoT and more. The company has completed over 100 projects since first being started in 2014, working with both new entrepreneurs and product development teams within larger companies.