As with previous iterations of the Local Digital Index techUK has proposed a number of recommendations from the research, preparation and findings toward the 2024 Index. These recommendations are intended to support our regional tech ecosystems and to grow the UK’s digital economy.
Consult with industry to leverage the UK’s world-leading Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) schemes. As an example, to better support start-up and scale-ups outside of London, the Government could look to increase the age limit for raising investment. This would recognise that firms elsewhere in the UK can take longer to become established. As recognised by the Treasury Committee, the maximum company age limit of seven and ten years written into the tax reliefs currently hinders economic growth and innovation. Extending the age limit could also incentivise greater investment into firms across all regions of the UK.
Benefit: This will help companies grow and expand across the rest of the UK, employing staff beyond the capital, driving digital skills and driving investment.
The UK tech sector needs a high performing London and South East. As the Local Digital Index shows the success of the tech sector in these regions isn’t in doubt. But to drive productivity we need to see companies grow across the UK.
DSIT should look to create, curate and produce a new mapping and sharing system of regional innovation testbeds and trial programmes.
Benefit: This will help SMEs and innovative companies to see where they can trial and test their products, but also to drive collaboration and connectivity in the sector. By mapping and sharing this work we can showcase the innovative and groundbreaking work being delivered across the UK.
As an example, the Innovation Cluster mapping tool created by DSIT, Cambridge Econometrics and The Data City presents the most comprehensive picture to date of firm-level innovation activity across the UK.
Given the emphasis on clusters in the recent Industrial Strategy Green Paper and ongoing development of Local Growth Plans, we call for better promotion of this. Along with extending the mapping to include a range of regional testbed and trials activity across the UK.
The UK Government to commit to an annual Summit of the digital and technology sector to collaborate on delivering growth.
Benefit: The Prime Minister and new Government have emphasised their desire to bring the UK’s Nations and Regions closer together and on 11 October convened the inaugural Nations and Regions Council in Edinburgh. The emphasis on collaboration and delivering growth should be welcomed. However, the Government should follow this up by committing to bringing the fastest growing part of the economy, the digital technology sector, together to collaborate further at an annual Summit.
Bringing together Science and Technology Ministers from across the UK, Government representatives, business leaders, stakeholders and partners from across the country on a shared agenda would help to drive collaboration on inward investment, encourage learning and best practice, and boost growth plans.
By rotating this summit around the UK and seeking to align with the International Investment Summit and the Office for Investment, the profile of the range of vibrant tech ecosystems can be highlighted.
Government should seek to devolve ownership and responsibility for digital inclusion to Mayoral Combined Authorities in England and devolved administrations in Scotland, Wales and Northern Ireland.
Government should provide further funding with a focus on skilling toward improved digital inclusion and engagement strategy, a commitment to partner with business, highlight the important social value contribution (through procurement) made toward digital inclusion across the UK, and publish results on an annual basis.
DSIT should work with the tech sector to further investigate how digital inclusion is helping grow the digital economy, saving money for public services, and how successful regional initiatives can be grown, scaled and replicated across the UK.
Benefit: It’s self-evident when analysing the Local Digital Index data that all areas and communities are different, and each has different strengths and needs. A one size fits all approach to digital inclusion will fail to address the nuance required to deliver on local needs or the benefits of working with local stakeholders.
Similar bodies already exist for other high growth sectors identified in the UK Industrial Strategy, and it feels sensible to extend this to the digital and technology sector.
Benefit: By creating this new Council and providing a body to not only grow the tech sector but to help the wider economy and support digital adoption. This new group would also be able to aid and connect the new Local Growth Plans being written across the UK with the central Industrial Strategy.
Build on the progress of the Shared Rural Network (SRN), by introducing a wider package of digital support targeted toward rural and coastal communities.
Benefit: In a changing economy, businesses should be supported to take the steps that will help their business, especially those in areas of low economic growth. Rural and coastal communities are some of the most deprived and least connected communities in the UK. The progress on the SRN is welcome, however, this only seeks to pursue the roll-out of digital connectivity rather than a wider package of digital support. Our recommendation is to increase digital adoption for small businesses, support digital skills in businesses and further improve digital connectivity. techUK made a similar recommendation our 2023 Local Digital Index and the data for 2024 shows that it is even more pertinent today.
Address public sector challenges and provide innovative businesses with accelerator opportunities by bringing CivTech to other parts of the UK.
Benefit: CivTech has proved hugely successful in Scotland and engaged many new businesses - particularly small businesses - to help take on public sector challenges. There are few, if any, accelerators like it anyway where in the world. However, as with other historic ideas, inventions and innovations from Scotland, the ambition of a good idea shouldn’t be limited to Scotland alone.
CivTech could be brought to other parts of the UK to help address public sector challenges and provide businesses – particularly small businesses - with a route to roll out solutions across the country, share learning, and participate in procurement to grow the sector.
Could DSIT and Mayors combine to embark on a pilot that would bring CivTech to London or the North of England? Through funding from DSIT, or delegated funding to CAs, or other routes, the Civtech model could bring similar benefits to other nations and regions, whilst continuing to deliver for Scotland.
Create ‘Offices for Tech and Innovation’ across the UK to help support local authorities use data, innovation and technology to deliver more for residents and improve service delivery by working with industry and devolved bodies.
Benefit: The London Office for Tech and Innovation (LOTI) has made great strides in its work to help support local authorities. But should this be restricted to the capital? If we want to see a digital UK, with tech adopted by local authorities, public service improvements, and business engagement then we need to aid that journey.
Aligned with our UK CivTech proposal, ‘Offices for Tech and Innovation’ should be created and supported across the UK. In England this could align with geographies in the North, Midlands and South.
By sharing best practice, rolling out what works, trialling new ideas and supporting councils in their digital transformation journeys, these bodies will be able to convene and deliver more than local authorities working alone or siloed.
A clear, published and timetabled plan for devolution in the UK, including the powers, responsibilities and relationship with Government.
Benefit: We await the details of the Government’s plans for devolution but what has become clear is that (a) Mayors are here to stay, (b) the map of devolution is haphazard, and the future of devolution is unclear, and (c) the progress toward allocating single settlement pots is too slow and fails to be transparent.
The UK currently has 12 elected Mayors covering Combined Authorities (CAs), with a further 2 Mayoral elections in May 2025. This leaves a situation where most of the North of England has a Mayor, with none in the nations, and few in the South of England. This produces a political and funding imbalance that elevates the voice of some parts of the country, doesn’t effectively allow the voices of some communities to be heard, and fails to offer a clear route for future decision making.
In a similar way it’s unclear when a Combined Authority reaches a stage in its growth, maturity or development to be able to apply, negotiate and secure a single settlement pot. There should be a more transparent and precise way this can be tracked so that the ambitions of communities and Combined Authorities can be realised.
This should be alongside more Combined Authority data being included on the Oflog Data Explorer to ensure more transparency as the number of Combined Authorities increases and single settlement agreements are rolled out. A Local Growth Plan tracker, where Combined Authority aims and targets are shared and compared across the country could be added to the Oflog platform.
The Scottish Household Survey Data Explorer is useful but some of the data is pre-pandemic and there’s a failure to have an agreed taxonomy across the UK for some of the metrics. An improved way of comparing data from across the UK should be introduced that supports the differentiation of work being conducted in Scotland, Wales and Northern Ireland (and in England) but seeks a way to make comparisons and drive best practice.
Finally, there is insufficient digital and tech sector data collected in these tools beyond broadband roll-out. A much-improved local data explorer tool would not only aid techUK’s Local Digital Index, but if done correctly it would leave it surplus to requirements.
Review the current use of SIC codes (standard industrial classification) to classify business establishments by the type of economic activity in which they are engaged. The Government should recognise that many businesses within the tech sector do not fit within current classifications.
techUK would advise current classification system should be consulted on, with a look to revise, or remove the current system no longer fit for a digital economy. Additionally, there should be work convened to better understand the UKs ‘true digital economy’ and what underpins it.
Benefit: currently SIC and SOC code fail to acknowledge the true diversity and changes to the UK economy. As an example, techUK’s Local Digital Index has sought to use Data City’s RTICs as an alternative way to assess the digital economy and its value.
In March 2024 techUK published the ‘techUK Mayoral Manifesto to support a vibrant digital economies and better public services’. Some of the proposals from that document have helped add to the Local Digital Index for 2024.
Additionally techUK has published Foundations For The Future: How Data Centres Can Supercharge UK Economic Growth and the UK Tech SMEs: Driving Economic Growth and Innovation reports. Both documents recommend ways to drive growth, support the UK tech sector and deliver more for tech ecosystems across the UK.
