Anne Main leads a debate on the future of the UK digital and tech industries

18th April 2018

Anne Main highlights the importance of the digital and tech industries to the UK and urges the Government to ensure we have the right education and skills for the future of this fast-growing and changing sector.

I beg to move,

That this House has considered the future of the UK digital and tech industries.

It is a pleasure to serve under your chairmanship, Ms McDonagh. This is an important debate on a sector of the economy that has been incredibly vital for this country and will become even more important in future. The UK’s history as a global leader in technological and digital innovation is well known. From the invention of the telephone by Alexander Graham Bell in the 1800s, and the creation of the television by John Logie Baird in the 1920s, to the relatively recent introduction of the world wide web in 1989 by Tim Berners-Lee, the UK has always been at the forefront of technological advancement for the rest of the world. Today we continue to see incredible innovation and growth across the country, which puts the UK at the forefront of global technological advancement.

The turnover of digital and tech business in the UK has reached £170 billion. That is an increase of £30 billion over the past five years alone. We should recognise that the digital sector is creating jobs twice as fast as the non-digital sector. It is important to note that this is not just a London-centric industry, as many seem to think it might be. We have seen incredible growth in this sector all across the UK. There are digital clusters thriving in Belfast, Edinburgh, Glasgow, Newcastle, Cardiff and many other places in the UK. In mentioning all those regions, I thought that people from them might feel urged to jump up and say so. [Interruption.] The hon. Member for Strangford (Jim Shannon) will save his ammunition for later. We should welcome the huge growth in the number of individuals setting up businesses online, many from their own homes.

One of the many benefits of the digital industry is to take advantage of the opportunities for business and trade that exist online: the ability for people across the country, and the world, to be connected at just the press of a button. The aim of my speech is to push the Government for assurances that, alongside the recent digital strategy, we will continue to invest and encourage this sector of the economy to grow and, crucially, strive to be world leaders in this industry—tech UK.

Imagination Technologies in my constituency is at the cutting edge of this exciting sector. I visited its offices a couple of weeks ago and witnessed at first hand some of its fascinating, advanced work on computer chips and artificial intelligence. As I am sure the Minister knows, Imagination was recently acquired by Canyon Bridge, a US venture capital firm, for close to $1 billion. That is $1 billion of confidence invested in the UK. It is the largest such investment in UK tech since the referendum, so “Project Fear” should be well and truly dead. That was a huge investment of confidence in my constituency.

I am sure that the Minister will welcome that investment and the massive vote of confidence in the UK tech industry, and I hope that she will visit Imagination to see for herself this jewel in the tech crown. I extended that invitation to the Prime Minister at lunchtime, and she thought it a bit of a deviation from her way to Carlisle. To save her from that deviation, I will say today that the Minister will be more than welcome to my constituency to see what the world can learn from St Albans.

There has been so much good news coming out of the tech industry in recent years and months. The UK ranked in the top three in KPMG’s 2018 global technology innovation report. The report detailed the record level of venture capital investment into UK tech firms, which totals $4 billion. That is more investment than the combined amounts in Germany, France, Spain and Ireland. The UK is mopping up more of that vital investment than those four countries combined. KPMG’s report also highlighted the strength not just in large tech firm investment and growth in the UK, but in the investment going into emerging UK tech firms. However, we cannot rest on our laurels. We must see the UK emerge as the No. 1 location for global tech innovation in the near future—not just in the top three, but No. 1.

Does my hon. Friend agree that it is remarkable and commendable that 99.8% of all new digital firms are small and medium-sized enterprises, and that this is a reflection of the organic strength in this space in the UK?

I absolutely agree. We are having to look to a model where the great big factories and industries of the past are not necessarily going to be the voice of the future. Many of these companies are set up in people’s bedrooms. Mark Zuckerberg might have a few issues of his own at the moment but, as he said, who would have thought three geeks in a bedroom would set up a company that would become so big? That is the future. Many of these companies start off small and then grow. That growth is part of the success, but also part of the issue that I want the Minister to address.

Funding Circle, a FinTech company founded in the UK, is another great example of success in the UK tech sector. Established in 2010, Funding Circle is now the world’s largest lending platform for small businesses and has offices across Europe and in the United States. In such a short space of time it has come to be a global leader. Lending from Funding Circle loans has supported the creation of approximately 80,000 jobs in the UK. It is a wonderful example of the thriving FinTech industry that we now have.

Across Europe, the UK is leading the way. The latest European digital city index ranked London as No. 1 for supporting digital entrepreneurs. The UK is also No. 1 across Europe for inward investment into the digital sector. We should be incredibly proud of that. As we look to the future, the Government must do everything they can to support the continued growth of this industry. That includes listening to its concerns and planning for potential regulation.

The hon. Lady is painting a very rosy picture of the current situation. I suspect that she will soon move on to some of the challenges. As a representative of a city that is a well-known tech hub, I will just ask: does she agree that many of the people who work in the tech sector come from other countries, particularly European Union countries, and that it is important that the Government bring forward their proposals on migration and immigration as soon as possible so that we get some certainty for the future?

I do agree with the hon. Gentleman about getting certainty on migration. Other companies I have spoken to recently say that they want to be able to bring in the brightest and the best. I absolutely understand that. Interestingly, many of the brightest and the best who are coming in, including Dr Li, who has taken over as the chief executive of Imagination Technologies, are from outside the European Union. Many are saying to me that they want a level playing field on the ability to bring in the brightest and the best, and not just because someone happens to have a blue passport. It is important that we recognise that this is a global industry with global resources that may wish to come to the UK.

I agree with the hon. Gentleman that we need to get our immigration strategy fit for purpose, but we also need to ensure that we have people in our own country who are entering the tech industry. Another company I visited in St Albans said that it was bringing in many highly qualified technicians. It had not employed a single person from the UK in the past three years. Why? Because it could not get them; they are in such demand. There are issues we need to address with ensuring that we are growing home talent for the future, as well as those around immigration. It is a double-sided issue that we need to be looking at.

These are some of the key priorities being raised by firms and trade associations in the industry. First, there is the adequacy agreement with the European Union as part of our future trading relationship. I do think that the future is rosy and bright, but no future, wherever we were, would not have its issues. The adequacy agreement is being asked for, and I would like the Minister’s views on that. The free flow of data between the UK and the rest of the EU is extremely important to both sides during the negotiations. It is so clearly in everyone’s interests for the flow of data to be unhindered, so that needs to be prioritised. I am sure it is being, but I would like to hear more about it from the Minister.

The implementation of the general data protection regulation in May and the Government’s commitment to the framework is encouraging and must help the case for the adequacy agreement to be reached. I would also be pleased to hear what further work the Government are doing to ensure that the adequacy agreement will be reached as we leave the European Union. There will be serious concern among the tech industry if it is not battened down as an agreement that everyone has confidence in when we leave.

Secondly, companies stress the importance of access to talent for their industry, which goes back to what the hon. Member for Cambridge (Daniel Zeichner) said. Of the 1.64 million jobs in the digital sector, about half a million are done by foreign-born employees. That means that half a million people are importing, so to speak, their talent into the UK tech industry. Even so, the industry demands more talent, which comes in through the tier 2 visa route, to support growing businesses that are looking for particular skills.

Many companies, including those in my constituency, report being extremely limited when trying to recruit talent from non-EU countries. This is a golden opportunity, despite Brexit being given a bad press—I hate the phrase “despite Brexit”—for us to craft an immigration policy that will not leave highly skilled jobs unfilled because of the difficulty of recruiting talented individuals from around the world.

As we leave the European Union, we will be able to set our own immigration policy, with fuller control over who can come into the country to work. The Government must ensure that any future immigration policy is agile and flexible to allow that international talent to come to the country and support growing industries, such as the tech sector. I would be glad to hear what preparations the Department has made to ensure that the tech sector can access that international talent after we leave the EU. Given that there are many small businesses in the tech sector, I would like to ensure that there is a conduit for their voices and concerns in future.

Finally, our education system is crucial to the future success of our tech and digital sectors. With the best will in the world, the brightest and best talent comes and wants to work in the UK tech sector, but I would also like our young people to want to join it—not to say it is not for them. It is important to welcome foreign talent, but we must grow our own.

Policy Exchange reported that 65% of today’s students will end up working in jobs that do not even exist yet—that is 65% of future jobs that we cannot even imagine. By 2022, 500,000 highly skilled workers will be needed to fill digital roles, which is three times the number of UK computer science graduates in the past 10 years. That shows the amount of upskilling we have to do and the need to make tech a sector that our young people go into. That huge mismatch must be addressed.

Educators must provide children and young adults in the UK with the skills and training needed for the jobs of the future. We need a curriculum fit for the future, access to teaching staff to inspire our young people, and careers guidance that narrows the gender gap. Women and girls can and do flourish in the tech industry, but we need greater encouragement. When I visited Imagination Technologies, I asked a lady there how many women go into that sort of industry and she said, “Not enough.” It is not enough.

I am encouraged by recent Government announcements about the digital strategy and the Department for Education’s announcement that a further £177 million will go into maths education, which is a crucial STEM subject for the jobs of the future. However, we need to do more to encourage our brightest and best to enter the world of teaching. Teaching is at the core; to get young people enthused and motivated, we must get the teachers in. There are some difficulties in recruiting teachers for certain subjects, and I would like to see a strategy to address that.

When I met Dr Li, the new chief executive of Imagination Technologies, he spoke about the significant support the industry receives in China. Rather cleverly, I said that we are in the top three, but China is No. 1. I will give hon. Members some reasons why—to say that the state is helping is to put it mildly. To promote talent in the industry and, crucially, to retain it, the Chinese Government provide subsidies for teaching tech subjects and offer financial incentives around pay and housing for those working in the sector. Although I am not advocating that approach, it shows that our competitors are determined to win the global tech race. They will not export their talent to other countries if they can possibly help it.

We need to ensure that tech UK is heading for the winning line, but with that exciting world of opportunity comes a dark side. Online security and safety are extremely important issues for the industry to deal with. The protection of the personal data that is being used by online companies is a current issue. For people to have confidence in the programs and applications they use, they need to know that their personal data is secure. I hope that the Government will continue to put pressure on companies to safeguard user data, and to consider how we can future-proof personal security and police industry behaviour.

UK businesses are increasingly subjected to cyber-security threats, which is another topical issue. A recent report by the National Cyber Security Centre found that more and more businesses are being threatened with data breaches, ransomware and cloud theft. Unfortunately, the criminals of this world—the malcontents and ne’er-do-wells—are one step ahead of the game. What are we doing to ensure that we are getting ahead of the game in cyber-security?

The growth of the internet of things, in which many household devices and other objects are interconnected, presents a worrying openness to hackers, as many of those devices lack even the most basic security defences. Some hon. Members will have seen the horrific case of a driverless car being hacked into. The idea that the machines could suddenly take over is horrific, but of course it is not the machines; it is the hackers behind the machines. The exploitation of data in attempts to influence other countries’ elections is another current topic.

As we migrate more of our lives into the digital world, we need to ensure that rogue companies and rogue states are prevented from corrupt or sinister behaviour. I hope that the Minister will touch on what the Government are doing to strengthen our cyber-security and to increase public awareness about safety in a high-tech world.

The industry has incredible potential. Some recent technological advancements are staggering and the UK is proudly at the forefront of that success. On my visit to Imagination Technologies, it was inspiring to hear from those in the industry about how technology will improve our lives in future. The ability for artificial intelligence and the internet of things to combine to assist with healthcare and care for the elderly is especially exciting. Wearable tech will enable the user to be notified of potential health irregularities and will be able to alert medical services when a user’s condition requires it. AI will also be able to help elderly people who need assistance with basic tasks, although there will never be a substitute for interaction with people.

To conclude, tech can improve our future lives in many ways: not just through healthcare or social connectivity, but by making everything in our lives easier. Tech UK is the future for us all. This country has an incredibly exciting digital industry and global Britain should strive to be not just in the top three, but No. 1.

Hansard

 

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