GDP growth reinforces vital importance of tech sector to UK economy

This week’s slightly-better-than-expected GDP figures show the importance of the tech sector to not just the UK economy but to any plans for our international trade relations once we leave the European Union.

The Office of National Statistics highlighted the “computer programming” and communications industries as key contributors to a 0.5% quarterly growth. Tech is and always has been a highly international sector, both in trade terms and in sourcing skills, and that’s a critical part of the success that is helping the UK maintain economic growth in politically troubled times.

But already we’re seeing the potential risks if Brexit is handled badly, and more specifically from the fall in the value of the pound.

Microsoft, Apple and Dell have all increased UK prices to reflect the decline in sterling, and research suggests that cloud customers will be paying a lot more over the coming months too.

That’s why it’s vital that the government makes a strong and positive statement of action for the digital economy very soon. We’ve heard little from the Chancellor or the Prime Minister yet on their plans in this area, but the hints from ministers are positive.

Digital economy minister Matt Hancock has put his weight behind what he calls “full fibre” broadband roll out – the focus on fibre to the premises that has been sorely lacking from past government pronouncements or from BT. Hancock has also suggested that plans are afoot around R&D, startups and skills.

It seems likely that the government’s planned industrial strategy will include digital industries, and its aims for national infrastructure projects could include broadband and 5G mobile too. Both would be welcome developments.

The tone of such comments suggests that the autumn statement on 23 November – Philip Hammond’s first budgetary update since taking over as Chancellor – will reveal more details. We can only hope.

Over the next year we will see important developments in the UK’s tech infrastructure, as Microsoft, Amazon and Google open up local datacentres to support their cloud businesses. These services are intended for UK businesses and the public sector, but also offer a springboard for the UK cloud sector to take a lead across Europe and beyond. We also hope, of course, that any success those suppliers achieve as a result is fairly reflected in the taxes they pay in the UK.

The government will understandably be focused on the implications of Brexit for the next couple of years – particularly once Article 50 is invoked. But it cannot allow that focus to diminish support for the digital economy, which will be central to UK success as our future plans emerge.