Already this year we have seen groundbreaking developments in AI, the creation of exciting digital twins and 5G entering commercial deployment, unlocking the potential for innovative products and services. The technology sector is booming. In, 2018 it was growing 2.6 times faster than the UK economy overall .
And there is more to come. It is estimated that AI technologies could bring an additional £232 billion to the UK economy by 2035. Similarly, driverless cars are estimated to add £28 billion to the economy in the same timeframe , while IoT is estimated to save us in the region of £75 billion over the next five years. We are being seen around the world as a leader in data-driven growth and technologies such as AI, particularly in healthcare, 5G, smart transport and smart cities.
However, right now the UK tech sector and wider economy faces a number of challenges and uncertainty ahead. Yet, what remains clear is that it is digital tools, solutions and services that are driving economic growth, increasing productivity, creating jobs and helping entrepreneurs and SMEs to succeed and grow. The transformative power and potential of digital technologies including AI, IoT, augmented and virtual reality, and 5G are key to driving economic growth and unlocking the productivity of UK organisations, particularly in key sectors for the UK such as transport, logistics and manufacturing.
But now is not the time to slow down. Now is the time to supercharge the digital transformation of industries across the UK economy by increasing the adoption, deployment and use of digital technologies. So how do we make this happen? What are the key ingredients for success, and how do we get this right for companies across the whole of the UK?
Firstly, we must support increased digitisation across the whole of the economy, and drive productivity by introducing measures to support non-digital businesses to embrace new technologies with confidence. We must do more to encourage the take-up of digital services, software and tools such as cloud computing, supply-chain management software, IoT technologies and new AI-driven solutions.
Secondly, we need to ensure that innovative digital tools and solutions are available to UK companies. We need a comprehensive package of measures to support UK R&D in digital industries. This is not only key to ensuring increased digitisation but also to meet the government’s commitment to spending 2.4 per cent of GDP on R&D by 2027. To do this we must take steps now, for example by aligning the UK’s R&D tax credit systems with others around the world to enable one form of tax relief to both R&D programme expenditure and facilities.
Thirdly, but by no means finally, it is vital that we support businesses to ensure they have the skills and talent needed to meet the digital skills gap the UK is facing. Additional work is needed to enable the next generation to develop its digital skills and help businesses, and local authorities, to get the support they need to drive the design, adoption and implementation of digital services.
We will be looking at progress on these and other key issues that are vital to supercharging the digital economy at our flagship Supercharging the Digital Economy event on 6 November in Manchester. This event will bring leading experts together from this ecosystem and the private and public sector, where they will focus on the digital revolution, what it means for sectors and what it means for the North. Come and join us to help explore and find the answers to these questions so that we can take advantage of the opportunities that existing and emerging technologies can have for the whole of the UK economy.