The UK’s regional disparity is well-documented. From life expectancy to education to job prospects, some areas of the country, especially in London and the rest of the South East tend to fare significantly better than those across the rest of the country, in particular, the North East of England and Wales.
To get a sense of the difference, at the height of the first lockdown last year, productivity in the South East, as measured by output per person, was roughly approximate to Wales and the North East of England in ‘normal’ times. These results aren’t solely the outcomes of a north-south divide. Scotland, for example, was actually up to 10% more productive than the UK average in recent years, so there are clearly other factors at play.
To address this disparity the UK Government has committed to ‘levelling up’ the country; a broad and as yet not fully defined vision to devolve power and bring living standards and economic conditions in more deprived areas in line with those better off. But what does that really mean? This blog seeks to explore that question and explains why I believe technology will be key to the Government achieving its goals, in more ways than one.
What Is ‘Levelling Up’?
The UK Government plans to publish a Levelling Up White Paper later this year which will clarify how some recently enacted policies and future plans tie together in a coherent strategy to “improve opportunity and boost livelihoods across the country”.
While the paper should provide valuable detail on specific initiatives, we already know some key things about the plans. One of the most important components will be moving Government functions and jobs out of Whitehall and creating hubs across the country.
This initiative has already begun in some areas. This year Rishi Sunak announced that Darlington, a town in County Durham, would become home to a Northern hub for the Treasury to decentralise economic decision-making.
This trend extends beyond the direct reach of the Government too. Earlier this year the BBC announced plans to move 400 jobs and £700m in funding outside of London. The hope in both instances is that relocating existing jobs will help create new ones, generating new opportunities for those living in the local area, and encouraging greater diversity.
Why Technology Is Integral To Levelling Up Plans
According to figures sourced from the UK Government’s Digital Economy Council, the UK technology sector grew tenfold from 2010-20. The technology sector has more than delivered on its promise of revolutionising the economy and will be one of the most critical economic drivers in years to come. To date, much of this growth has again been centred in London and the South East.
A similar pattern emerges when we look at regional differences in technology investment in the public sector. In fact, currently just three sub-regions of the UK (Oxford, Cambridge, and Inner West London) account for 41% of the public sector R&D spend.
In recognition of the disparity within the private sector, the UK Government recently launched its Future Fund Breakthrough, a £375m fund that will invest in a selection of R&D intensive companies across the UK. Similar commitments will be needed for its regional public sector hubs.
Technology will also be key to levelling up plans in another sense. The Government not only wants to create more public sector jobs outside of London, but to create better and more productive jobs as well. Specifically, technology that can automate and augment certain parts of public sector jobs, will be vital to this.
The benefits are extensive and clear: whether automating the administration and delivery of welfare payments to citizens, thereby freeing up time for Department for Work and Pensions (DWP) officials to carry out more impactful work or giving HM prison staff secure handheld devices that enable them to better manage ward occupancy levels. Individual workers can benefit from digital upskilling as well. For example, rehabilitated prisoners can get access to digital technologies, such as e-learning and digital literacy tools, to help them reintegrate into the future economy with ease.
So, the Government’s levelling up aims around technology are twofold: invest in and build up the tech sector, including the technology used by the public sector to support growth, job creation, and economic dynamism, as well as bolstering the productivity of that public sector growth through digital and technological solutions.
Now Is The Time To Overcome Historic Obstacles
Education and upskilling – both of young people and of adults – will be key to success. One of the biggest challenges facing UK policymakers is that of the skills gap, where tech-savvy workers are less abundant outside of major cities and in particular London.
This divide can be bridged early on by facilitating equal access to digital educational environments to students across all regions. But the responsibility shouldn’t just fall to government. Tech companies can and should support the levelling up agenda and the need for increased digital skills by offering their products and training programmes to schools and universities. For example, programmes like SAP’s University Alliance, which includes University partners in Sheffield, Portsmouth and Lancashire, equip students with SAP software skills and encourage relationships between industry, students, and researchers, accelerating innovation and insights for the digital future.
Companies in regions across the UK will be able to tap this digitally literate and purpose-focused talent pool to support their own technology development. This is crucial as continued investment in educational and upskilling opportunities will help ease the transition
Regional disparity has long been an issue in the UK. Politicians throughout the ages have made pledges and found the challenges to be too great, yet the urgency remains.
Today, in the aftermath of a world-changing pandemic and in the face of an urgent climate crisis, levelling up the UK is not just a moral imperative but a pragmatic one too. Investing in green and technology-led development in those less well-off regions will give the UK an opportunity to reshape its economy and society for the better.
Satpal Biant is head of Public Sector for SAP UK&I.