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Government produces Digital Transformation Plan to boost UK productivity

Chancellor George Osborne's Digital Transformation Plan puts digital technologies at the heart of the UK's economic future

The government is to produce a Digital Transformation Plan to support the adoption of digital technologies to improve productivity in the UK economy.

The proposal is part of chancellor of the exchequer George Osborne’s wider “productivity plan” which aims to address the UK’s productivity gap. Britain lags behind many of our international competitors such as France, Germany and the US on key measures such as output per hour worked. According to the government, matching the productivity of the US would raise GDP by 31% – equating to around £21,000 per annum for every household in the UK.

The overall plan includes 15 areas such as tax, planning regulations, transport, education, welfare, banking and other key aspects of economic performance – with technology as a common theme running through many of the initiatives. As part of that, Osborne plans to publish the Digital Transformation Plan in autumn.

“The UK’s digital economy is vibrant and growing rapidly. To ensure that these benefits are felt throughout the whole economy the government will publish a Digital Transformation Plan by autumn 2015 that sets out concrete actions the government will take to support the adoption of digital technologies across the economy, and the ways in which the government will assist in tackling barriers to new businesses entering and creating new markets,” said a HM Treasury report, titled Fixing the foundations: Creating a more prosperous nation.

Last month, the government established a Digital Infrastructure Taskforce – led by minister for culture and the digital economy Ed Vaizey – which is likely to play the key role in producing the digital plan.

The wider productivity report highlights the importance of broadband and mobile infrastructure – although much of the focus here will come from the existing Digital Communications Infrastructure Strategy, published in March 2015. The plan proposes several additional measures to make it easier for network providers to gain regulatory approval for building fixed and mobile infrastructure.

Raising living standards

A number of other technology-related initiatives were also highlighted – although some had been previously announced – including:

  • The establishment of employer-backed Institutes of Technology to improve technical education;
  • Identifying ways to change regulatory frameworks that would otherwise restrict the growth of emerging technologies. Whitehall departments have been tasked to work with regulators to produce a series of Innovation Plans by spring 2016, to “set out how legislation and enforcement frameworks could adapt to emerging technologies and disruptive business models”;
  • Launching an Emerging Industry Action Group for the so-called sharing economy, to identify barriers to businesses looking to take advantage of this emerging model that uses technology to share resources such as cars, spare rooms and people’s skills;
  • Reiterating support for the European Union’s Digital Single Market proposals;
  • Production of departmental plans across Whitehall, to include initiatives for digital redesign of public services and better data sharing;
  • Continued support for financial technology (fintech) startups, to support the government’s ambition for the UK to be the world’s leading centre for fintech. Venture capitalist Eileen Burbidge has been appointed a special envoy for fintech to champion the sector across the UK and internationally;
  • An exercise to map the varying strengths of UK regions through a series of science and innovation audits;
  • Previously announced investments to support science and innovation research were included in the productivity plan too, such as £128m for the UK Collaboration for Research in Infrastructure and Cities (UKCRIC) and £200m from IBM for big data research at Hartree.

Chancellor George Osborne said: “The only way to sustainably raise the living standards of the citizens of our nation is to confront the challenge of our lifetime, to raise productivity. This will not be achieved overnight and will require a truly national effort by government, business and working people. But with this blueprint to fix the foundations of our economy, I believe we have taken the vital first step towards securing the prosperity and a livelihoods of generations to come.”

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