As Vodafone launches a new research report - From local to global - Nick Jeffery, CEO, Vodafone UK, reflects on the conditions needed to help the UK's digital businesses flourish.
COVID-19 has delivered a seismic shock to the UK’s economy.
But in the words of Culture Secretary Oliver Dowden, it was technology that “kept our economy ticking over” at a time of national crisis. With businesses turning to video calls and online orders to remain operational, continued economic activity during lockdown has depended on the digital sector.
The consequences would have been much worse without it.
This has undoubtedly accelerated digitalisation – the next chapter of which is 5G connectivity. Indeed, 5G is likely to be a primary catalyst for business productivity gains over the next decade in every sector.
The UK is well placed to take advantage of this technological step-change and create the opportunities at home – and on the international stage – for our digital sector to flourish and for UK digital businesses to become globally leading tech titans.
Threats to growth
There are, however, challenges we must overcome to achieve this.
Firstly, like the rest of the economy, the digital sector is likely to feel the impact of COVID-19. Our report – From local to global – finds that £15bn of UK economic output that would have been created by the UK digital sector had it not been for the pandemic could be permanently lost over the next decade, along with 37,400 digital sector jobs and 10,800 digital sector businesses.
To avoid these losses, the Government should take robust action in its upcoming Digital Strategy and Spending Review to create the right policy and regulatory environment for the UK digital sector to thrive and grow.
Secondly, despite the significant contribution to UK Gross Domestic Product (GDP) that the digital sector makes, there is a lack of domestic digital companies that go on to become household names across the globe. Only two UK companies rank in Forbes’ Digital 100 – one of which is Vodafone – and those companies that do display global potential are often bought out by foreign players.
Meanwhile, a handful of international digital giants makes it harder for smaller companies to grow to global scale.
From small acorns…
We think overcoming these challenges requires a local focus.
Vodafone’s journey began in 1982 as a small start-up based behind an Indian restaurant. Since then, Vodafone has been pioneering mobile technology. The company made the first ever mobile phone call in 1985; sent the first text message in 1992; and made the first live 5G holographic call in the UK in 2018.
Nearly four decades since its beginning as an innovative British start-up, Vodafone is now one of the world’s largest technology communications companies, with mobile operations in 22 countries, partnerships with mobile networks in 42 more and fixed broadband operations in 17 markets.
Would Vodafone be able to achieve what it has if it started out life today?
Perhaps. But as acknowledged by the Government in its plans for the 2020 Digital Strategy, digital businesses will have a better chance of success if we develop world-class infrastructure, train up a highly skilled digital workforce, and ensure that the regulatory regime is pro-competition and pro-innovation, such as that being recommended by the Competition and Markets Authority.
Only then will we see our local digital firms fulfil their potential on the global stage.
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