Neil Murray 07 September 2020

Double-down on digital

Double-down on digital image

With each passing day forecasters are attributing different letters and shapes to represent the UK’s economic recovery from COVID-19, plotting future GDP on a graph. Will it be a V-shaped? Take a U-trajectory? Or mirror global sportswear manufacturer Nike’s swoosh?

Given a vaccine is still some months away, in a best-case scenario, and countries further along the recovery process are contending with fresh spikes in infection rates, mapping recovery over the longer term with any real certainty is a fool’s errand.

Interestingly, it’s one the Bank of England’s chief economist, Andy Haldane, has refused to be drawn into. He’s been at pains to point out his organisation’s talk of a sharp bounce back has been in relation to that seen since April: a description of the past, not a glimpse into the future.

One thing he has been happy to predict with more conviction is that digital skills will be vital to the UK’s progress over the next decade. It was a forecast made before the start of this tumultuous year but one I concur with entirely. It has undoubtedly been given further credence by the sweeping changes to the way we live and work, ushered in by the pandemic.

In his other role, Haldane is chair of the Industrial Strategy Council: a body which aims to provide ‘impartial and expert evaluation’ of the Government’s implementation of the Industrial Strategy.

At the end of last year, he launched a report entitled UK Skills Mismatch in 2030. The findings were particularly stark; doubly so when you consider its estimates were pre-COVID-19’s acceleration of tech and digital adoption.

The prediction is that, within a decade, just under a fifth of the workforce – around five million people – will have a severe digital skills shortage, while almost two-thirds will face some level of deficiency. It’s important to note that the report identified these as basic digital skills. And it makes clear that digital skills that we consider complex and specialised today, are likely to be considered relatively commonplace by the turn of the decade.

Arguably, the key challenge it identifies, is that 80 per cent of workers requiring these skills are already employed. These are not school-aged pupils or even undergraduates; those currently engaged in learning and at an age where the acquisition of new skills and experience are par for the course. To harness the jobs and economic stimulus that digital can deliver, we collectively need to re-train and up-skill vast swathes of the working population, not simply focus on the next generation. The requirement to fix vocational training’s image problem and place it on a par with higher education is a rallying cry I have issued before.

But the job losses currently sweeping through retail, leisure, travel and so many other sectors surely bring this need into even sharper focus.

The changes to the way we shop, socialise and work – which were undoubtedly in train before – have been accelerated. Habits formed out of necessity are unlikely to fade, even when the country has weathered the brunt of the pandemic.

The question we should all be asking is: what are the jobs of the future?

Faced with levels of unemployment not seen since the 1990s, however, Boris Johnson’s focus is on jobs of any description. Channelling former US Franklin D. Roosevelt’s New Deal, Number 10 has unveiled its Getting Building Fund: £900m to catalyse so-called shovel ready projects across the country.

The stimulus package is clearly welcome, particularly in the North. Local authority leaders – at least those in the major conurbations – have well-considered growth plans which hinge on the construction of long-demanded infrastructure improvements and flagship buildings. They have made their case for investment and, refreshingly, been backed by central government.

Supporting them is an obvious choice for Whitehall. Altering the physical makeup of our urban areas is an undertaking which supports countless jobs in planning, design and construction. This latest tranche of investment is mooted to support 85,000. There’s a very tangible, often visually-striking result which, crucially, manifests relatively quickly. Ribbons are regularly ready to be cut within the same parliamentary term an investment is announced.

But the way we collectively use our cities is being questioned like never before – so too the physical infrastructure, which has for years creaked under the weight of commuter traffic. Lockdown has cast the suburbs in a new light. We have all tasted air containing vastly-reduced carbon emissions from less urban traffic. Policymakers at all levels should, therefore, be wary of focusing on bricks to the exclusion of clicks.

Digital connectivity – and the skills which go hand-in-hand with it – have long been hailed as key by vocal advocates of devolution. It’s fair to say, however, that the agenda has regularly taken a backseat to calls for improvements to physical infrastructure and connectivity.

The pandemic surely supports the case for parity.

Since the Northern Powerhouse was launched in 2014, inclusive growth that works across the region has been sought through the economic engines of cities. Manchester, Liverpool and Leeds have played to their respective strengths, enjoying notable economic growth and progress. They were levelling-up relatively successfully long before the term was adopted by Boris Johnson.

But what of the surrounding areas? Local authority leaders in places like Burnley, Wigan or St Helens, might argue that trickle-down economics which was supposed to benefit their proximity to the North’s major cities has yet to bear fruit.

Pre-coronavirus, establishing better road and rail links across the North was highlighted as the main tactic to levelling up these places – many of which would fall under the Conservative’s 'left-behind towns' descriptor.

To be clear, high-speed rail, and improvements to long-maligned roads like the M62 remain vital. The pandemic and subsequent recovery, however, presents a watershed moment for investment in digital infrastructure and skills; one with the very real potential to enable these satellite and commuter towns and villages to ditch that moniker, and generate future-proofed economic output from within their boundaries.

5G connectivity may be delayed by the Government’s decision to cut ties with Huawei, but full-fibre broadband rolled out to all rural and post-industrial areas should be a priority. That would drive up productivity and increase their attractiveness as a place in which to live and launch businesses.

Improving digital skills is a far more nuanced goal which will require a concerted effort by policymakers, education providers and, crucially, businesses.

It’s the latter of these groups that, unsurprisingly, are making the best progress on the agenda. Last month Microsoft launched a free global initiative to provide 25 million people with digital training, with a specific focus on those impacted by COVID-19. In the UK, BT has its Skills for Tomorrow programme which is aimed at SMEs.

We now need proactive approaches like these to be matched by our universities. Some of these institutions are facing an existential crisis as a result of the pandemic. A smart route out, for many, would be to place a renewed focus on providing education and training geared specifically around the top tier of digital skills which require deep study: data science, artificial intelligence and advanced robotics, to name a few, which have the potential to enhance the productivity of both knowledge and manufacturing sectors in our economy.

There is precious little time to waste in equipping current and future workers with the skills required to compete in an evolving jobs market. Estimates from the World Economic Forum suggest that 133 million new jobs will be created in the fields of emerging technologies by 2022, almost double the number expected to be lost to automation. Many of these roles will be location-agnostic. This is likely to appeal to digital natives, who are increasingly-comfortable interacting and collaborating with friends they may never meet in in person, on gaming platforms and social networks.

And the work-from-home experiment has been a success on the whole. Even ardent city dwellers are now weighing up the potential merits of life in the suburbs or rural locations, with estate agents reporting a threefold increase in enquiries in these areas.

The shift towards hiring the right person at the right time, regardless of where they choose to base themselves, is well underway,

This direction of travel suggests competition between Northern cities, or even between North vs South, may be looked back upon as parochial in the extreme. In decades to come, the jobs market of the future will be increasingly global. The case for investing in the digital skills, and infrastructure, pivotal to all UK towns and cities thriving within it has surely never been stronger.

Neil Murray is CEO of Impact Data Metrics

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