UK must follow Cambridge example to harness full power of Data Economy, says report
The Data Economy in the East of England is the fastest growing in the UK, influenced by the growth of the world-class healthcare and pharmaceuticals hub centred on Cambridge, Digital Realty reports.
Data is currently worth £73.3 billion to the UK economy, supporting 1.7 million people, with the largest contributors the ICT, financial services and professional services sectors, accounting for 64 per cent of the total.
Digital Realty reveals that the East of England contributes 7.6 per cent – worth £5.6 billion – to the haul and that its Data Economy shows the strongest UK growth at 8.7 per cent.
The pharmaceutical sector alone accounts for about one fifth of all UK commercial R & D activity and Cambridge is emerging as the centre of a leading world-class life science R & D hub, the report says.
Digital Realty says that the approach businesses in the East of England take to their data, and the infrastructure that delivers its, could mean the difference between its Data Economy growing at its current rate and hitting £7.3 billion by 2025 and a best-case scenario in which it grows to £7.8 billion by 2025, creating a £0.5 billion per year data dividend.
But in a hard-hitting national prognosis, Rob Coupland – EMEA managing director for Digital Realty, says the UK as a whole is in danger of missing out on £52bn a year in value from data unless it ups its game.
This is arguably the most comprehensive, first-of-its-kind look at the economic contribution that data provides to the UK economy. The Data Economy Report by Digital Realty reveals that the UK is tapping less than two-thirds of the potential value of its data.
The report, commissioned by Digital Realty and compiled by economic consultancy Development Economics, demonstrates the key role data plays in the UK’s economic prosperity with the Data Economy growing at a faster rate (7.3 per cent) than the UK economy as a whole (1.8 per cent).
The report reveals that there’s still some way to go in competing with some of our most data-savvy European neighbours. Germany still trumps the UK’s Data Economy in size, with Ireland’s Data Economy growing at a much faster rate.
Rob Coupland says: “The Data Economy is creating a £101.6bn opportunity for the UK and its businesses but only if they make it happen. That means investment in new technologies, digital skills, R & D and infrastructure. To not invest now will cost them for the next decade.”
The report outlines the steps that UK businesses can take to turbo-charge their ability to turn data into financial value:-
- Invest in the next generation. New ‘internet of things’ (IoT) and analytics technologies are creating new, data-led ways to identify and access efficiencies and revenue streams across businesses. To achieve the full potential of their data, businesses need to invest in new technologies and make sure every relevant area of operation has access to those technologies, from production lines to logistics, management of premises and R & D.
- Assure customers. Consumer trust around data is low. Businesses need to rebuild confidence that they can and should be trusted to handle customer data. To do so, they need to invest in defences against cyber-attacks, create robust and transparent policies and learn from best practice in other businesses.
- Plug the skills gap. The UK is facing a skills shortage of over 150,000 digital workers per year by 2020. Businesses need to proactively plug that gap by recruiting and training workers and developing training programmes – such as digital apprenticeships – targeting school leavers and returners to the workforce.
- Invest in the foundations. Whether it’s a business upgrading its data centre infrastructure or the UK’s telecoms providers investing in fifth generation mobile phone networks, investment is needed at the foundations of a company’s data infrastructure. UK business investment, however, is falling as a proportion of revenues. If businesses don’t turn around that trend they will be left behind.