A report by the House of Lords this year concluded that digital technology is so pervasive across all aspects of life that the ‘digital economy’ is becoming synonymous with the national economy. The UK, it said, cannot afford to miss the opportunity or shirk the challenges this presents.
For many years, the UK has been one of the world’s leading digital economies. In 2011, its digital sector contributed an estimated £105bn to the economy and, in 2013, the National Institute of Economic and Social Research concluded that the size of the digital economy was almost double official estimates.
How well placed are we to continue to compete?
The UK’s population and labour force are ageing as the baby boomer generation reaches state pension age and older people are working for longer. The population aged 65 and over is projected to increase by 42% in the period to 2030, while the population aged 16-64 is expected to grow by only 3%. An ageing population with more long-term conditions will mean increasingly large amounts of GDP spent on health and social care.
Meanwhile, economic power is shifting towards emerging countries, where investment in people, robotics and technological innovation are helping to boost productivity.
China has quintupled its number of graduates and doubled its number of higher education institutions in the past decade. If trends continue, within the next decade, China and India will account for 40% of all young people with a degree in the G20 and OECD countries. China is planning for 20% of its citizens – 195 million people – to have higher education degrees by 2020; that is roughly equal to the entire projected population of 25-64 year-olds in the US in 2020.
The 5% of the population with the highest IQs in China outnumber the total population of the UK, as does the top 7% of India’s population. China will soon have more people speaking English than any other country in the world. These figures have huge potential implications for the UK.
Jobs such as app developer and data miner did not exist 10 years ago. Many in the education world believe we are preparing students today for jobs that don’t yet exist that will employ technologies that have not yet been invented to solve problems that we have not yet identified.
The government has committed to ensuring that the UK remains a leading digital economy. Its vision is for the UK to derive “huge economic and social value” from a vibrant, resilient and secure cyberspace.
The House of Lords’ report proposes that the government and devolved administrations should develop an ambitious “digital agenda”. At its heart should be a vision for the UK to “keep up” with the best leading digital economies, with the government acting as the “conductor of the orchestra”, playing an enabling role, focused on business and education. How confident can we be that the UK will still be a leading digital economy in ten years’ time?
