Data & Tech

Debates on technology and trade in the UK in recent years have been dominated at micro level by whether technology can render a border invisible, and at macro level as to whether the gravity effects of trade, that countries trade more with neighbours, are in the process of weakening. Brexit may be banned as a word in government, but these Brexit related issues will continue to be important in the future, not least in thinking about the barriers we may face in UK-EU trade, and whether any negative trading impact from these can be offset by global trade.

To realistically consider the impact of technology on the UK’s trade performance after EU departure we need to understand our current trading position, and the main trends in technology we are considering. In both cases we find a picture more complex than that held by common wisdom, suggesting there are unlikely to be easy answers for the UK.

It is well known that nearly 50% of the UK’s exports are in services, where the UK has been described as “frighteningly competitive”. The largest single element of this is financial services, but we’re good at a diverse range of business and professional services, information technology, education, branding, retail and much besides. That leaves 50% of goods exports, of which only a small percentage is the result of the commonly understood process of producing a good and selling it overseas (Scotch whisky being the classic example).

More often, the UK is part of a sophisticated chain of imports and exports making up a final product, with cars and aviation being classic examples of such sectors, and where there may be some embedded services, such as after-sales service contracts and in-car systems. In these sectors much of the international trade occurs within the same company, think perhaps Airbus or Ford.

The technology developments that affect this trade are thus as diverse as the trade itself. Much of the talk in recent years has been around blockchain, a form of shared record trusted by all parties to a transaction, which should be able to assist with customs checks and trade finance among other things. That would suggest a reduction in the cost of global trade and reduction in the gravity effect, but other trends towards greater automation and 3D printing are conversely encouraging manufacturers to locate closer to major markets, and away from low cost locations. Trade in the automotive sector, huge in global trade terms, stands to be radically affected by the change to electric vehicles, with less parts, and probably less complex supply chains.

Services trade is similarly going to be affected by greater automation, which may for example reduce the trade in the provision of call centres (some of whose functions are plausibly replaced by virtual agents) but increase outsourcing in other areas, such as legal services research. This could even move into more complex fields such as advanced manufacturing or surgery, where robots in one country are controlled by skilled staff in another.

There is little suggestion from academic literature that the cumulative effect of all of these changes will dramatically alter the gravity effects of trade. Much trade remains local for the simple reasons of culture and familiarity, the greater knowledge of a market close by because of regular contact, shared tastes, common regulations, or lower costs of sale and maintenance related to travel costs. Even if the cost of long distance trade is falling, it is not falling by enough to change the fundamentals.

This doesn’t mean that the current pattern of UK trade is the one that will be maintained; that will depend on the choices we have yet to make. Already the UK is an outlier in our services trade, with larger than expected trade with a number of countries including the US and in the Middle East. For the US the huge levels of investment between the two countries may be a particular factor, while for the Middle East the UK’s successful defence manufacturing sector is clearly a factor.

The likely effect of greater barriers to trade with the EU compared to the current position is a reduction in our place in various manufacturing supply chains such as in automotive, which is not offset by any other trade agreements. Technology could reduce the cost of border barriers, but in a low margin sector these costs could still be a significant deterrent to UK manufacturing.

This would increase pressure on the sectors where trade agreements make less of a difference, which includes much of the aforementioned services sector, along with defence and other high margin engineering. This suggests though that we may be better not going down the traditional trade agreement route, but instead creating new bilateral agreements in areas such as FinTech, data, regulations, and the movement of people. This though would not be easy given sensitivities among likely trading partners.

Our trade choices will of course have a strong relationship with those made for the domestic economy. A government seeking to increase manufacturing exports would probably want to create a close relationship with our neighbouring markets, joining up with local innovation and skills efforts. Focusing on services and niche manufacturing would potentially exacerbate divisions between those areas with university and research clusters, and other towns, unless other measures were taken. Trade policy, it should be noted, always involves government picking winners and losers. Technological developments can’t affect that, but awareness of them will allow for informed decisions.

David Henig is Director of the UK Trade Policy Project at the European Centre for International Political Economy. This article first appeared in our Centre Write magazine Digital disruption?. Views expressed in this article are those of the author, not necessarily those of Bright Blue. [Image: Number 10]

In this period of exponential digital evolution we are living through, we are both the architects and beneficiaries of progress. Technology has undeniably, if not universally, benefitted the world: overall we are better educated, healthier, live longer, have unprecedented access to knowledge, travel further, and feel more connected.

Yet with progress comes pain, for we are also victims of technology. While we reap the rewards, we suffer increasingly in a complex ecosystem of online harms, mass data abuses, and the dissemination of misinformation. Legislation has failed to keep up with these impacts – impacts that, at their most negative, have the potential to damage individuals, organisations, and entire societies and social structures beyond current recognition.

Sir Tim Berners-Lee, in his 2019 Dimbleby Lecture, spoke of what we all know to be the “ghastly” nature of content available online, and confirmed what many of us now acknowledge: that artificial intelligence is no match for our peculiarly human ability to harm each other in the most toxic ways.

The end of the last decade was marred by increasing levels of abuse and intimidation against people in public life in the UK. It has become clear that online harms affect not just individuals, but our national security, our shared rights and responsibilities, opportunities to foster integration, and access to political participation. Yet it is the cumulative impact of these factors on our democracy that is the most disturbing of all.

Much recent research by various academic bodies and organisations shows that the abuse of public figures, particularly politicians, is increasing. The majority of this abuse occurs online. The University of Sheffield, for example, analysed more than one million tweets between elections in 2015 and 2017 and found that the number of abusive tweets about politicians more than doubled.

The Committee on Standards in Public Life’s Intimidation in Public Life review remains one of the most compelling documents, compiling the results of eleven quantitative submissions and the anecdotal evidence of dozens of MPs. Maria Caulfield MP is quoted in the review: “I now have video entry to my constituency office. I have panic alarms. I only post on social media after I have attended events. I no longer hold open surgeries.”

Abuse is no longer confined to electoral periods. MPs have warned for years that the levels of abuse they were receiving were out of control, with female MPs disproportionately targeted. Perhaps most illustrative of the trend was the number of MPs – particularly female MPs – who cited abuse and intimidation as a direct factor in their decision not to stand again in the December 2019 election. Fear of abuse is changing the way we, especially women, campaign. Female activists now openly speak of operating in an environment where they legitimately fear for their physical safety.

Just as we can no longer consider the cumulative impact of individual cases of abuse and intimidation in isolation, so too must we stop suggesting that the online space is a self-contained landscape. The online space is the public space. It is the space in which we work, learn, play, interact and, increasingly, govern. If the public space becomes so toxic that it not only deters whole future pipelines of public servants, but turns voters off politics even more, we are looking at a political culture that lacks vibrancy, diversity and innovation. We will all suffer as a result.

Correlation does not imply causation, but the links between online and offline harms cannot be denied. The sheer volume of abuse online, and the increasingly normalised language and tone, has legitimised violent behaviour in real life, with potentially calamitous effects. We know this only too well through the tragedy of the murder of Jo Cox MP and the recent prevention of the plot to kill Rosie Cooper MP. Stoking grievances and prejudice through inflammatory language perpetuates a wider atmosphere of fear and intimidation.

The long-term impacts on our politics will continue to play out. But we can, and must, intervene now. Across Whitehall, within the machinery of Westminster, and among the institutions and layers of national and local government, there is a contagious desire to tackle this issue. In July 2019 Government announced the Cabinet Office-led Defending Democracy programme of work, designed to protect and secure democratic processes; strengthen election integrity; encourage respect for free, fair and safe democratic participation; and promote fact-based and open discourse, including online.

Government also committed in 2019 to publishing a consultation on electoral integrity, including looking at measures to improve voters’ confidence in our democracy. The publication of the Online Harms White Paper in April 2019 was a major milestone in the road to a regulatory framework online. Legislative change around electoral law is improving the safety of candidates.

However, it will only be through a collaborative and concerted multi-sector effort that we can stem the tide of abuse and intimidation, and strengthen the future of our precious democracy. As Cabinet Office Minister Oliver Dowden said in a written statement in November 2019, “Left unchecked, abuse and intimidation will change our democracy and mean that the way Members interact with constituents will need to change. Increasing levels of threats directed at those in public life is a worrying trend that will require a coordinated and thorough response from government, the relevant authorities, businesses and the public themselves.”

Government is stepping up; the private sector, and civil society, must too. One vital step will be behaviour change, and the empowering of active bystanders. Society must be enabled to call out abusive behaviour wherever and whenever we find it – and to understand the clearly detrimental impacts. Westminster must lead by example, but holistic societal change will be required to shift perceptions around behaviours that have become common in a frighteningly short timeframe. For that, government, social media companies, and each and every one of us has a duty to act. The wholesale rejection of an abusive culture in our public life must be our end goal. Only when this happens can our democracy flourish again.

Catherine Anderson is the CEO of the Jo Cox Foundation. This article first appeared in our Centre Write magazine Digital disruption?. Views expressed in this article are those of the author, not necessarily those of Bright Blue. [Image: Today Testing]

Picture a world where the year 1999 and 2019 exist side by side: where just down the hall from one another, two people do the same job, seek essentially the same outcome and get paid the same salary. Only, one of those people uses a brand new technology to deliver an efficient, high quality service and the other is stabbing keys to input the basics into Windows. This is what government digital services look like today.

Hyperbole? Sure; but this is a metaphor for a world where one authority uses a startup’s technology (Cyan Forensics) to scan for criminal content on a device in just three minutes, while another uses the industry standard – taking a full 20 times longer. 

In the last five years, GovTech – technology that will fundamentally alter how citizens interact with public services – has exploded onto the scene, and has become a thriving sector of its own expected to be worth £20 billion by 2025. However, the promise of this technology can only be realised if we have a government-wide strategy that embraces new technologies, supports new entrants to the market, and provides a platform for innovative people, business and ideas to rethink how these services work. 

Yet public sector players have been slow to make the wholesale structural changes required to fully realise digital government. There are exceptions, but I would argue that – as a country – we are at risk of failing to deliver on the promise of new technologies, failing to take advantage of opportunities to improve the delivery of core public services and, as a result, failing the millions of us who use such services daily. 

A society that makes our lives safer, more fulfilling, and more productive is possible. It will be possible to transform public services, so long as public and private sector players can work together to make that happen. Take artificial intelligence (AI) and 5G: both technologies are fresh, exciting, and filled with the promise of untold possibilities for innovation which companies across the globe of all sizes and sectors are just beginning to explore. 

Ten years ago, AI was science fiction. Now, it’s an umbrella term for a game changing family of technologies that are driving increased productivity and efficiency on a daily basis. The public sector has been relatively quick off the mark in its use of AI; the technology has been deployed to great effect by central government, local government, and others – including the NHS and Serious Fraud Office. 

The truth is, we should be moving faster. In just five years, the private sector has embraced UK AI on a massive scale – Google’s acquisition of DeepMind for $400 million in 2014 fired the starting gun on a boom that saw a record $1 billion invested in UK AI companies in the first six months of 2019. Investment in UK AI in 2018 topped out at more than the 49 other countries in Europe combined. Startups are a huge part of that. Five of the UK’s 16 ‘unicorns’ (startup companies with a valuation over $1 billion US) are in the AI space. 

The rollout of 5G across 20 UK cities this year makes it the newest development I’ve touched on in this article, yet arguably the one with least hype. Don’t get me wrong, it’s great that I can now order pizza faster than ever before; but it would be naive to think that this is the technology used to its full potential. Across Europe, startups are deploying 5G connectivity in sectors from cybersecurity to smart cities, and we cannot afford to miss out on the opportunities for transformation presented. 

5G is already a massive opportunity for partnerships with the private sector. In the West Midlands, the Government is already developing a region-wide 5G testbed exploring use cases and business models in mobility, citizen wellbeing, construction and manufacturing. Trial programmes – conducted in partnership with Bosch – have already realised a 1% improvement in manufacturing productivity – a vital gain in an industry with tight margins – while a partnership with BT explored the possibility of using 5G connected ambulances to more effectively triage A&E patients. 

For the UK to guarantee the benefit of advancements touched upon here – as well as many others that could help secure a better-governed world – I have three recommendations. 

First, double down on support for the tech sector. 

In a recent interview, the CEO of Graphcore – a UK AI chip-maker – spoke of the potential for AI to transform on a grand scale. Medicine, law, finance – there’s a potential role for AI in pretty much every sector and any interaction you can imagine citizens having with the services they depend on. Government has gone all-in to promote the technology in 2019, introducing the new AI Sector Deal, guidance for public sector bodies on using AI applications, and the formation of a new AI Advisory Council to “supercharge the Artificial Intelligence sector”. These are all fairly recent developments given that Google purchased DeepMind in 2014, but where the public sector has lost time on AI, it has made up for it through ambition. Similarly in the 5G sphere, a new accelerator is testament to the Government’s ambition in this area too: a welcome exploration of how startups can exploit the technology in the development of new products and services. 

To keep up this momentum after Brexit, the UK is going to have to stay ahead of the competition at every turn. In this regard, we’re doing well – UK investment in technology is significantly higher than that of France and Germany (although they are catching up); and the UK Government has strategies and programmes to foster and support innovation across a wide gamut of sectors and technologies. Initiatives such as the Office for AI and the Centre for Data Ethics and Innovation (CDEI) are evidence of the work being done to make digitisation of the UK economy happen. 

With all of this in mind, it is disappointing to read reports that a number of London boroughs are not yet 5G ready; a stark reminder that the Government cannot afford to rest on its laurels. At every level, it will be essential to amplify support for and commitment to the digital economy to guarantee that UK tech attracts the skills and investment it will need going forward. 

Second, it’s time to embrace digital government. 

Strategy is nothing without execution. Sector deals, guidance and strategies are not worth the paper they’re written on if the people and processes that bring the public and private sectors together kill real innovation before it has even begun. 

Casting my eye down the list of startups working out of PUBLIC Hall – PUBLIC’s new GovTech hub in Whitehall – what stands out is the extraordinary potential for technology to radically improve core services. Take, just as an example, the health service: whether it’s digitally streamlining referrals to specialist services (Cinapsis); rethinking patient consent (Flynotes); or combining behavioural insights and artificial intelligence to increase the quality of life and survival times for cancer patients (the award-winning Vine Health) – the future of technology in the NHS goes far beyond ‘axe the fax’; it is startups like the ones mentioned here that will be the instigators of that future. 

With opportunities for digital transformation staring decision makers in the face, policymakers have been exploring the route to digital government. NHSX launched in early 2019 to “bring the benefits of modern technology to every patient and clinician”, and “combine the best talent from government, the NHS and industry”; similar programmes are in motion across Whitehall and further afield, but initiatives with this level of ambition are the exception. To truly harness the value from technology, public buyers need to further explore new ways of working and deliver a new model for public services. 

Third, build the platform from which entrepreneurs can engage and transform. 

We founded PUBLIC not just so that we could back great ideas; we did it to break down barriers, reconciling the inherent tensions that prevent pioneering public buyers from doing business with groundbreaking entrepreneurs. 

We’ve found that what’s needed to do this is simple ideas. Ideas like one, single online system for accessing and bidding for public sector contracts or a procurement innovation team to champion new models of procurement and market engagement. I’ve said before that G-Cloud, the platform for public sector buyers to choose and buy cloud computing services, is not fit for purpose – and is just one of many that startups must grapple with to secure public contracts. 

From there, what next? Transparency in supply chain processes, new payment models, rewarding commercial decision makers when they buy innovation and it pays off; there are so many solutions, many of which are really quite simple, but will require Whitehall to break out of its mould to deliver. 

Whether or not you agree that the technologies I’ve discussed here are set to be game-changers or not, the UK’s response to each is already in motion. Make no mistake however, the most important technological development for society right now is GovTech, and the recommendations here will be critical to an effective UK response. 

I’ve said this many times in the past but it bears repeating: a system that promotes the participation of startups in the delivery of public services isn’t just going to be the most innovative, it’ll be the one that is best protected from exposure. When Carillion failed, the sheer volume of government contracts held drove the knife further and further in. Outsourcing is essential, but it has to deliver the digital transformation that the public deserves, and to do this government must level the playing field.

Daniel Korski CBE is the co-founder and CEO of PUBLIC. This article first appeared in our Centre Write magazine Digital disruption?. Views expressed in this article are those of the author, not necessarily those of Bright Blue.