The future of the left since 1884

The challenge for labour: Digital opportunities for prosperity

The general election campaign has focused heavily on the state of the British economy, with debate centred on the scale and pace of deficit reduction as well as the fair distribution of the subsequent burden. This is as it should...



The general election campaign has focused heavily on the state of the British economy, with debate centred on the scale and pace of deficit reduction as well as the fair distribution of the subsequent burden. This is as it should be: the next government will be under great scrutiny with regards to the deficit. But there is another significant challenge facing the British economy that will have fundamental consequences for the next generation.

Technological change underpins how businesses operate. In the City of London regulatory changes have become technological changes as banks figure out the most efficient way to respond to new operational requirements. For example, many small businesses will not survive if they do not have a usable website. As more and more people use their smartphones for daily activities, mobile applications are increasingly central to how many businesses are redefining their growth strategies.

In the midst of this perpetual upheaval, the UK faces a technology skills gap that is in danger of threatening economic growth, as established businesses and start-ups look elsewhere for the human capital to keep them at the industry’s cutting edge. The threat is such that the House of Lords Digital Skills Committee recently declared the UK at “tipping point”, as traditional jobs increasingly become automated and the British workforce is left without the necessary skills to fill the next generation of jobs.

However, this is not simply a case of survival for the British economy: the change also presents a considerable opportunity. Much is made of Britain’s declining manufacturing base: however, investment in the digital economy would allow us to export intellectual property and highly-skilled workers profitably.

One such area is the explosive growth of financial-technology, or ‘fintech’. A report by Accenture found that investment in fintech grew by 201% in 2014 and London is firmly established as the European hotbed for this growth. This has led to the establishment of companies like TransferWise which are making it easier and cheaper for customers to transfer money to another country online.

While new companies prosper, more established companies are also using new technology to reinvigorate their business models. Facing the threat of online retailers such as Amazon, Argos is currently bringing its offering in to the twenty-first century, by creating concept stores with a stronger online presence, and utilising dynamic pricing and distribution methods.

The ‘creative destruction’ that accompanies such changes in technology often sits uneasily with those on the political left who instinctively seek to protect the worker who fears losing their job. However, the change is inevitable and a future Labour government must do all that it can to alleviate the losses by investing in the future and seizing the opportunity for Britain to be at the forefront of this change.

At the heart of this is the education system, and digital literacy must become a core part of the curriculum. It is no longer enough that children simply learn how to type and use Microsoft Office: rather, digital literacy should become a core subject, including programming skills, requiring teachers to be equipped with the right skills to teach the new curriculum successfully.

Furthermore, given the vocational nature of many technology jobs, a future Labour government should stress that there are many alternatives to the university career, and ensure that many more high-quality apprenticeships are offered to school leavers. These apprenticeships, provided in collaboration with businesses desperate for skilled workers, would provide vital alternatives for many young people who do not feel catered for by the current system.

This investment in digital skills would also bring societal benefits above and beyond the skilled workforce. Chuka Umunna has spoken of how many people without simple digital skills feel disconnected in a world where more things can solely be done online. We must be careful not to leave people behind in a rush for progress and ensure each and every citizen has access to the internet and the skills to perform tasks that keep them connected to the mainstream.

Labour’s manifesto champions the benefits of a “longer-term approach” that “will drive innovation and build on our strengths as a leader in digital technology.” This pledge is absolutely vital to the future of the British economy. It’s not just digital companies that are emerging: new digital skills are permeating and altering every aspect of how traditional companies do business. A long-term approach to develop key skills is critical to the success of our economy.

The UK is currently entering an exciting but precarious period. In ten years’ time the workforce will need to be vastly different to its present state, and Labour must act to ensure that the UK has the necessary skills to bridge that gap. This can be achieved through structural changes that allow for a connected society that realises the promise of the digital age, and one in which a radically changing workforce is appreciated as an opportunity for prosperity and not mistaken for a passing fad.


Jack Curtis

Jack Curtis is a recent Politics graduate from the LSE and is currently working in London as a Consultant.


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