Information Economy Strategy

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Industrial Strategy: government and industry in partnership

Information EconomyStrategy

June 2013


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Contents | 1

Ministerial Foreword 3

Industry Foreword 5

1 Executive Summary 6

2 Context and Outlook 11

3 Actions: A Strong, Innovative Inormation Economy Sector Exporting UKExcellence to the World 17

4 Actions: UK Businesses Across the Economy making Smart Use oInormation Technology and Data 25

5 Actions: Ensuring Citizens benet rom the Digital Age 32

6 Actions: Underpinning the Inormation Economy in the UK 41

7 Summary List o Actions 50

Reerences 54

Contents


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2 | Inormation Economy Strategy


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Ministerial Foreword | 3

The inormation economy is transorming the way we live and work. It is crucial to oursuccess on the global stage, our competitiveness and our connectedness to ourwhole economy.

In the UK we have a strong history o innovation, rom Alan Turing, the ather oalgorithms, to Tim Berners-Lee, inventor o the World Wide Web. Today we haveworld leading computer science departments, highly innovative technologybusinesses, and a pioneering approach to open data and transparency.

I we want to retain our strength in the inormation economy, then we cannot standby. We need concerted joint action rom Government, industry and academia,

working in partnership towards the success o the sector, and ensuring that thebenets are elt across the rest o the economy.

We are not starting rom scratch. The Government has already committed to makingthe UK the best place in the world to start a technology business. We haveimplemented innovative policies to make that happen, including the newentrepreneurs visa and abolishing stamp duty on shares traded on growth marketssuch as AIM. We have put over 220 million behind developing high perormancecomputing and e-inrastructure to take advantage o the data revolution. We areinvesting over 650 million to achieve a transormation in broadband in the UKby 2015.

There is plenty more to do. The inormation economy brings massive opportunities,but only i Government, industry and academia work together to make it happen.Our education system must ocus on developing creators o technology, as well ascondent users. So working with industry and academia we will develop a plan toimprove our digital skills, rom ensuring everyone can make the most o digitaltechnology, to training the next generation o innovators. We also want to ensure weretain our competitive advantage in data science and algorithms, through a datacapability strategy. And the Government will shortly be publishing urther details on itsapproach to digital connectivity, content and consumers, building on work led by the

Department or Culture, Media and Sport.

Ministerial Foreword


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Given the huge potential o the inormation economy, and the rate o technologicaldevelopments, this Strategy cannot be the last word on this matter. It must continueto evolve. The new Inormation Economy Council has a key role to play here. Perhapsmore importantly though, we want everyone to be able to contribute to ourInormation Economy Strategy through http://www.intellectuk.org/inormation-economy. Because, as Tim Berners-Lee tweeted at the London Olympic Gamesopening ceremony: This is or everyone.

David Willetts

Minister or Universitiesand Science

Ed Vaizey

Minister or Culture, Communicationsand Creative Industries
http://www.intellectuk.org/information-economyhttp://www.intellectuk.org/information-economyhttp://www.intellectuk.org/information-economyhttp://www.intellectuk.org/information-economy


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Industry Foreword | 5

The UKs prospects in the global race or growth, innovation and new industriesdepend on harnessing the benets o the inormation revolution which is transormingeconomies and societies at an astonishing speed. This is a vital sector, generatinghigh value, high skilled jobs and huge value add or the UK economy, but it is also akey enabler or every other industry in the country.

Over the last generation, UK citizens and companies have led the world in creatingand using technology improving not only our economic eciency and productivity,but social and personal outcomes across areas as diverse as healthcare,communications, retail and education. The dynamism o the UKs inormationeconomy is one o our true strategic advantages.

As UK technology companies are all too aware, strategic advantages must beconstantly strengthened to keep ahead o the competition. To benet rom the newwave o inormation technologies, the industry will have to evolve whether marketleading tech companies adapting to new innovations or the rising stars o tomorrowgrowing rom tech startups to mature industrial players.

This means ensuring the UK is attractive or talent and investment by making the longterm, sometimes dicult, improvements to the sectors environment. We mustsharpen our skills, update our inrastructure, protect our citizens and systems, andleverage our valuable assets in data and human capital. Critically, we must also

ensure the benets o technology are accessible or every citizen in the UK.

Government, industry and research organisations all have a role to play in driving thisorward, and thats why the Inormation Economy Council is ocused on bringing allthree to bear on these critical issues. This Strategy is a ramework or the work we willtake orward together over the coming months we have much to do, but the UKhas a lot to gain.

Victor Chavez

President o Intellect and CEO o Thales UK

Industry Foreword


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A revolution in inormation and communications technology is transorming the waywe live and work. A recognisable new dynamic orce the inormation economy has emerged, and is transorming every other sector. It is changing the way we delivereducation and business services, design buildings and cities, and manuactureengines and cars. The UKs ability to achieve strong sustainable growth is highlydependent on a thriving inormation economy.

The ast-evolving nature o the inormation economy means we must exercise cautionin our approach to industrial strategy to this eld. Few o the dominant companiestoday were household names a decade ago, and many ormer market leaders haveallen by the wayside. The success stories o the next ew decades may well emerge

rom companies and individuals currently unknown to the wider economy.

But this is not to say we should simply sit back and await change. We can look aheadto the technological innovations o the coming years and prepare ourselves. Industry,academia and the Government all have crucial roles to play. The cross-cutting andpervasive nature o sotware, IT services, communications and data management,which dene the inormation economy, represent more o an eco-system than adiscrete sector.

Without long term action and planning to address skills shortages, organisations willstruggle to recruit the right sta. Without the right inrastructure, both physical and

virtual, businesses will struggle to develop. Without good cyber security, business andconsumers will not have the condence to use new technologies. Without action toaddress market ailures, our inormation economy could be stifed by unnecessarybarriers to growth.

This Strategy, developed in partnership by Government, industry and academia, setsout a road map to help the UK accelerate in the global race, ocusing on ourstrengths. Our new Inormation Economy Council, made up o representatives romGovernment, business and academia will set the agenda or actions towards thisStrategy, and monitor progress. It will consider the work o other relevant groups with

a view to keeping this Strategy updated and relevant.Closely linked to this work, the Government will shortly be publishing urther details onits approach to digital connectivity, content and consumers, building on work led bythe Department or Culture, Media and Sport.

1 Executive Summary


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Executive Summary | 7

Our Vision

Our shared vision is or a thriving UK inormation economy enhancing our nationalcompetitiveness, with:

A strong, innovative, inormation economy sector exporting UK excellence to theworld

UK businesses and organisations, especially small and medium enterprises(SMEs), condently using technology, able to trade online, seizing technologicalopportunities and increasing revenues in domestic and international markets

Citizens with the capability and condence to make the most o the digital ageand beneting rom excellent digital services.

Our long term success will be underpinned by:

A highly skilled digital workorce (whether specialists who create and developinormation technologies, or non-specialists who use them)

The digital inrastructure (both physical and regulatory) and the ramework or cybersecurity and privacy necessary to support growth, innovation and excellence.

Driving Growth Through Data ScienceBusiness sectors across the economy are being transormed by data, analytics, andmodelling. Data is increasingly being produced at a rate that means that currenttechniques are insucient to ully exploit it. The UK now has the opportunity to take alead in the global eorts to deal with the volume, velocity and variety o data createdeach day. This will require continued inrastructure investment, such as highperormance computing and data centres. We have a strong history in thedevelopment o algorithms and our universities remain world leaders in computerscience research. The Government will publish a data capability strategy in October,

in partnership with industry and academia. This will set out urther actions to takeleadership and advance our capability and capacity in data or growth.

The public sector holds and analyses a vast amount o data, and is leading the worldin making that data available. Central Government is leading the way on transparency.We have committed to consult over the summer on options or data release orsharing o some VAT registration inormation. The Charity Commission hasannounced plans to make available data rom the public register o charities by March2014, and recognising the continued importance o the Postcode Address File (PAF),Royal Mail have agreed to provide the PAF ree to independent micro businesses orone year and ree to independent small charitiable organisations. We are also issuinga call to arms or open data in local government.


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Improving skills

To reap the economic and social benets o the digital economy the UK needs astrong fow o uture talent, a skilled workorce and a digitally literate population.We need people who can use devices and apply technology as well as people whocan invent and develop the devices and technology o the uture. But whilst youngpeople are increasingly using digital devices, data shows a decline in the number ostudents studying Inormation and Communication Technology (ICT) subjects over thepast 10 years1. The Government is working with industry and other players to developa new computing curriculum in England which is due to start in September 2014.

Business, academia, local bodies and skills organisations must work in partnershipto develop a high level digital skills strategy. Specic areas or action will include: thepromotion o innovative teaching tools in schools, work to encourage young peopleand especially girls to pursue a career in ICT, seizing opportunities presented byMassive Open Online Courses, and making it easier or people to develop andupgrade their knowledge and skills through vocational conversion courses, one yearmasters degrees and technical diplomas.

Government will also ocus on supporting digital learning in higher education. Industry,Higher Education institutes and skills organisations will work together to create a

programme o Massive Online Open Courses, linked to existing and developingindustry supported products, or computing and data science. E-Skills UK is workingwith the sector to build on the ICT Higher Apprenticeship to create a route into a ullhonours degree.

Helping SMEs Online

The UK has the most advanced online market in Europe, but recent studies showthat ewer than a third o UK SMEs transact online2. Industry, in partnership withGovernment, will launch a programme this autumn to get more SMEs trading

eectively online. Our intention is to reach 1.6 million businesses over the nextve years.

Supporting Innovation and Growth

There is considerable misunderstanding about the shape o the inormation economy.The overwhelming majority o inormation economy businesses 95 per cent o the120,000 enterprises in the sector employ ewer than ten people3. There is also asmall number o large global companies in the inormation economy, which arehousehold names, who play a undamental role in shaping the industry. This Strategy

ocuses on creating the environment in the UK that allows inormation economybusinesses large and small to innovate and thrive. A key part o this Strategy will besupporting SMEs, in order to meet our ambition that the UK is the best place in theworld to start and grow a technology business.


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Executive Summary | 9

Innovation is the lieblood o the inormation economy sector, where companies mustadapt, evolve, and work together to create new products and services, as well asentirely new business models and markets. Inormation economy rms are otenhighly innovative, and the new Inormation Economy Council will work with theIntellectual Property Oce to help SMEs in the inormation economy make the mosto their intellectual property.

Government Services and Procurement

We are transorming the way that people interact with Government, and in the next

300 days we will transorm 25 o the top 50 public services across eight dierentGovernment departments.

Central Government spends 7 billion a year on IT. The majority o the majorcontracts that make up this spend will come to an end in 2014-15. We have madesure that the barriers to entry that Government has or years put in the way osmall businesses have been lited. Through the reorm o procurement and as a resulto the Governments agile approach to delivering better services, we will not renewlong-term contracts.

We have an aspiration that 25 per cent o central government procurement spend

should be with SMEs directly and in the supply chain by the end o the Parliament. Aspart o eorts to deliver the 25 per cent aspiration and achieve better value or moneyor the taxpayer, we think at least 50 per cent o spend on new Government IT couldfow to SMEs. And in the exceptional cases where large IT contracts are required, wewill expect at least 25 per cent o the supply chain o those contracts to go to SMEs.

The G-Cloud programme is simpliying processes and creating a competitive andtransparent marketplace. The Government has also introduced Contracts Finder, aree online tool to help businesses nd inormation about opportunities to supply toGovernment.

Inrastructure

There has been signicant recent commercial investment in broadband inrastructure,and the UK compares well with other countries in Europe4. By 2015, averagebroadband speeds will be at least three times aster than in 2010; 10 million morehomes and businesses will have access to superast broadband, an increase o 75per cent; and large parts o the country will have access to high speed 4G mobilebroadband services, with 98 per cent coverage in place by 2017.

In parallel the Government is undertaking an ambitious programme o investment toboost digital access across the UK with a total o 1.2 billion o public unding romcentral Government, local authorities and the devolved administrations. TheGovernment is considering urther options or how those in hard-to-reach areas canaccess superast broadband.


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We want the next generation o mobile technology to be developed here in the UK. Wehave got a head start. The new 5G Innovation Centre at the University o Surrey hasalready secured over 50 million o research unding rom Government and aconsortium o mobile operators and inrastructure providers rom around the world. Thiscentre will establish the worlds rst live operational test bed or 5G technologies andservices, putting us at the oreront o infuencing and inorming new global standards in5G. It should be a catalyst or research at universities elsewhere in the country.

Technology companies and research labs need access to radio spectrum or research,trials and development work. In order to drive ecient use o spectrum, Government

has asked Ocom to investigate the creation o an automated online geolocationdatabase aimed at providing on-demand, short term spectrum licences or researchand development (R&D) into 5G and other advanced communication systems.

Privacy and Cyber Security

With data at the heart o inormation economy growth opportunities, it is vital that theUK is eective in managing complex privacy and security challenges. Domesticallyand in international settings Government will continue actively to support aproportionate data protection ramework. On Identity Assurance, Government isworking closely with industry, privacy advocates and consumer groups to developa solution or Government services and set inormed minimum standards.

Cyber security underpins the inormation economy. Without it businesses andconsumers would not have the trust and condence to use the internet and otherdigital technologies. Government is delivering the commitments made in the NationalCyber Security Strategy with eleven leading universities awarded Academic Centreo Excellence or cyber security research status, sponsorship o 78 PhDs and undingor two Research Institutes. We are developing new routes or transerring cyberknow-how between GCHQ, research institutions and industry; this will capitalise onthe current active interest in investing in cyber on the part o high-tech venture capital

unds and technology multinationals. The Cyber Growth Partnership will workcollaboratively with the Inormation Economy Council.

Engagement

We are not starting rom scratch, as the number o initiatives already underway in this areademonstrate but through this Strategy, Government and industry will work togetherto bring greater coherence to these existing actions and ocus on what has the mostimpact. Where there is urther and new work to be done, we will tackle it in partnership.

This is the start o an ongoing journey, and this Strategy cannot remain static. New

inputs will come rom the market, groups and the public which will be considered bythe Council in due course. We welcome continued engagement and contributions tothe implementation o this Strategy as we work towards our vision or a thrivinginormation economy in the UK.


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Context and Outlook | 11

2 Context and Outlook

Key Facts5

The ICT sector contributed around 8 per cent (105 billion) to GVA in 2011(at current prices)

There were 1.3 million jobs in the ICT sector in 2011

Online purchases by consumers grew by more than six times between2003-2012

Only a third o SMEs sell products or services online

At least our out o ve small rms experienced a cyber security breach lastyear

Fourteen per cent o adults (7.1 million) have never used the internet

Apprenticeships achieved in ICT increased by 35 per cent between 2009/10and 2010/11.

Characteristics

The inormation economy is a recognisable new dynamic orce. At its core, it spans

the amiliar sectors o sotware, IT services and telecommunications services, and thisis the denition we use in this Strategy. However, the reach o the inormationeconomy is broader than this as it is constantly evolving and pushing into new areas.Its metamorphic nature and transormative impact on other sectors means it may bemore clearly thought o as an eco-system, though we reer to it as a sector in thisstrategy. This means we may not have an exact picture o the number o businessesin the inormation economy, or its employment, or the value it brings to the UKeconomy.

Addressing the lack o clear and universally-agreed metrics will be an early priority or

Government and industry. There will be a need or continual re-assessment o scopeand denition o the inormation economy as it evolves.

There are a number o large global companies in the inormation economy who arehousehold names and have played a undamental role in shaping the industry.


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However, the overwhelming majority 95 per cent o the 120,000 enterprises inthe UK inormation economy employ ewer than ten people6.

Companies working in the inormation economy are highly innovative, in terms oboth products and services7, as would be expected or rms working in a ast-paced,globally competitive and highly mobile sector. They are also strong exporters,generating a signicant contribution to UK GDP by reaching markets across theworld.

As providers o digital technologies, companies in the inormation economy enableall other business sectors, the public sector, academia, and individual users. O the

approximately 1 million IT jobs, only 40 per cent are in inormation economybusinesses8. The remainder are in other sectors o the economy such as nancial andbusiness services, education, and public administration.

The inormation economy is characterised by the pace o technologicaldevelopments, and the inherently unpredictable and oten disruptive nature o thesechanges. New technologies emerge and change markets quickly. As a result, evenestablished inormation economy businesses must continuously adapt and transormin order to remain competitive.

For citizens and businesses their daily activities increasingly span the physical anddigital worlds. Networks are becoming the pre-eminent orm o organisation. Many othe things we take or granted in our lives rom smart phones to social networks werenot in existence ten let alone teen years ago. The emerging economy powered byinormation and connectivity is a new landscape. We have new expectations, newways o seeing and new opportunities.

The Governments industrial strategy is about looking to the uture, developing a longterm approach in partnership with business to give condence now or investmentand growth. It involves a whole o Government approach and along with decitreduction, monetary activism and supply-side reorm is a core part o the

Governments approach to improving growth. The pace o change in the inormationeconomy means though that both this Strategy and Government need to be agile.

The Strategy must evolve quickly to remain relevant to the emerging opportunities.

Opportunities

The UK is well placed to take advantage o the inormation economy, recognised inthe World Economic Forums 2012 Global Competitiveness rankings9, which placedthe UK seventh in the world in terms o technological readiness. This measured thepreparedness o our economy to use ICT to boost competitiveness and citizens

wellbeing, and ound the UK to have one o the most conducive environments or ICTdevelopment, with a sound political and regulatory environment and high levels oICT adoption by citizens, businesses and Government.


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O the emerging trends and technologies in the inormation economy, the ollowingorm the priorities or the UK and hence or this Strategy. These are areas in whichwe have existing strength, or which have the greatest potential to be transormativeacross our economy.

The Data Revolution

The amount o data created and stored each day is rising, so much so that 90 percent o the data in the world today was created in the last two years alone10. With theincrease in the availability o both data and computing power, as well as advances in

mathematical science and algorithms, business sectors across the economy have thepotential to be transormed by data, analytics, and modelling. Data comes rom theactivities o individuals and organisations, rom the world around us, and rom ourhistoric records.

Big Data reers to ways o handling data sets so large, dynamic and complex thattraditional techniques are insucient to analyse their content. One approach tomeeting the Big Data challenge is though high perormance computing, such as theUKs 37.5 million investment in Daresbury, or the 189 million unding announced in2012 or capital investment in data centres and energy ecient computing as partone o the UKs Eight Great Technologies11. The E-Inrastructure Leadership Council,

a partnership between Government, industry and academia, is working to ensure theUK has the e-inrastructure it needs to take advantage o these opportunities.

Data science is an increasingly important discipline and one in which the UK hasstrength. We have a strong history in the development o algorithms and ouruniversities remain world leaders in computer science research. We also have someo the worlds most comprehensive historic data sets, such as Meteorological Ocerecords dating since 1880 and NHS data across the whole population.

Inormation is an unusual good: the more widely it is shared, the more people benet

rom it. The taxpayer currently unds the production o an array o inormation such aslegislation; academic research; maps and postcode rameworks; school and hospitalperormance metrics; and a broad swathe o national statistics. The Governmentbelieves that publicly unded inormation should be reely available; and be provided inormats that computers as well as people can easily read.

The UK is leading the world on open data, through its data.gov.uk portal12 whichbrings together over 9,000 data sets into one searchable website, and the worldsrst Open Data Institute (ODI) which aims to oster the creation o value rom opendata. The many benets o open data range rom increased transparency andaccountability, innovation and data linkage, and creation o economic value.


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E-commerce

The UK has one o the most sophisticated and competitive online markets in theworld, with the highest share o individuals who purchase goods or services onlineout o all OECD countries13. The UKs online market is the most advanced in theEuropean Union and makes up more than a third o the whole EU online market14.With the increase o mobile computing also come opportunities or mobile commerceand more electronic payments.

Mobility and Connectivity

Devices are becoming ever more intelligent, connected, and mobile. With mobileaccess to computing, individuals and organisations have increased expectations onhow we can use systems and keep connected. People and businesses expect theright inormation to be available, all the time, and anywhere. Through trends such ascloud computing, sotware services and data are hosted away rom users but areaccessible on demand, any place or time. Cloud computing provides newopportunities or businesses and organisations to reduce running costs, workcollaboratively and deliver new services.

Despite the advances in the inormation economy we have seen already, we are still

only in the oothills o a ully connected world. The Internet o Things, seen by someas the next phase o the internet, is a concept where not only people but objects anddevices are able to network and communicate with each other. It will involve anincrease in machine-to-machine (M2M) communication, with up to one trillion devicesor things which could be connected to networks across industries.

Smart cities will be a live application o the Internet o Things, where transport, energy,environmental and healthcare systems are much more interconnected reducingcosts, providing new services, and driving eciencies, all or the benet o the citizen.

Government as a Catalyst

The ambition to deliver digital public services so good people preer to use them wasset out Governments Digital Strategy published in November 2012. It is ounded onthe premise that digital services should serve the needs o the users, rather thanrefect the internal structure o government, and that this requires a revolution, not anevolution, o the approach towards the use o inormation and technology withingovernment. We believe that the government and the public sector can be aninternational beacon or digital creativity and excellence.

This Strategy also sets out the ambitions o the Government and sector to work

in partnership to work to address the challenges o improving digital literacy,inrastructure and cyber security. Government also plays a role in marketsas a procurer o goods and services.


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Challenges

There remain challenges which we must overcome, or work around, in order or theUK inormation economy to continue to thrive. Prime among these is the truly globalenvironment in which the inormation economy sector operates, more so perhapsthan any other business sector. The intangibility and ease o distribution o manyinormation economy products and services allows truly global competition.

The major players in the inormation economy those relatively ew but massivehousehold names are predominantly based in the US or Asia. There are howeveropportunities in the inormation economy or other countries to play to their particularstrengths, and we see this refected in the inormation economy strategies ocountries like Germany, Singapore, Finland, Estonia and Israel. The UK, thereore,must look closely at its own capabilities and strengths, and consider where weshould ocus our eorts.

Because critically in the inormation economy, we recognise that we operate in aglobal environment, we must work internationally, in areas such as the promotion oopen standards or the governance o the internet. In this, a strong partnershipbetween industry and Government is vital, with each understanding the needs o theother and where they can infuence.

We must also consider those qualities that set us apart in the global market orbetter or or worse. This means ensuring that our business environment remainsattractive to inward investment including relevant actors, or example with respectto skills, clusters and quality o lie. The UK also has a reputation or combining aconducive business environment with privacy and security, maintaining a air andproportionate data protection ramework, ensuring that the needs o business,academia and individuals are balanced.

Change is disruptive. Entire industries are transormed by networked technology.The need or some products and services diminishes as opportunities or new

oerings emerge. Not too ar into the uture, manuacturing will be transormed as3D printers across the world increasingly abricate goods on demand. For thoseat work this may mean disruptive change too. An essential part o this Strategythereore is ensuring that the workorce has the skills it needs to take advantageo the opportunities.

The Partnership and Action Plan

Putting this Strategy into action requires a strong partnership and cooperationbetween Government, business, academia, and other key players in the

inormation economy.


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The Government has established the Inormation Economy Council15 as a key step topromoting an ongoing partnership between these various players, with the ambitiono securing the long term competitiveness o the inormation economy sector.

The Council will set the agenda or uture activity, monitor progress against the actionsset out in the Strategy and assess the impact o Government interventions on thesector. Progress will be reported regularly through the Councils website.

One o the Councils early priorities is to address the lack o clear and universally-agreed metrics about the inormation economy sector. The Council will also prioritisethe skills and standards issues identied in the Strategy, and analyse the growth

challenges o small businesses in the inormation economy sector.

This Strategy covers a mix o reserved and devolved issues. A lot o work has alreadybeen done at the devolved level. Whilst many policy responses will be the sameacross the UK, these will be delivered via dierent channels or brands across thedevolved administrations.


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Actions: A Strong, Innovative Inormation Economy Sector Exporting UK Excellence to the World | 17

We want a strong and growing UK inormation economy sector that leads the worldin developing new digital technologies and taking them to global markets. The UKsinnovation ecosystem must support this by investing in research, encouragingcollaboration between business and academia, and enabling the successulcommercialisation o ideas. The UK must also, through its approach to standardsand its regulatory ramework, promote open global markets.

Promoting Innovation in the Sector

Innovation is the lieblood o the inormation economy sector, where companies mustadapt, evolve, and work together to create new products and services, as well asentirely new business models and markets. Inormation economy rms are otenhighly innovative, and as such, it is important or companies to understand theirintellectual property rights and how to protect them.

The Hargreaves Review16 o intellectual property (IP) and growth in 2011 concludedthat SMEs in particular oten struggled to make the most o their IP, and neededaccess to aordable basic advice on IP. The Intellectual Property oce provides arange o products and services to support SMEs to make the most o their IP,including unding strategic IP audits or selected businesses, and launching a trainingpackage later this year or SMEs and their advisors to improve understanding o IP.

Action: The Inormation Economy Council will work with the Intellectual PropertyOce to publicise these opportunities to inormation economy businesses, enablingthem to make the most o their intellectual property.

Innovation is also supported by our high quality research base, led by the UKResearch Councils. The Research Councils ICT and digital economy themes havebeen notable agents o transormational change, evolving new ways o carrying outinternationally leading multidisciplinary research and supporting high quality researchstudents rom new sources.

3 Actions: A Strong, InnovativeInormation Economy SectorExporting UK Excellence to the World


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The Technology Strategy Board (TSB) is the UKs innovation agency, bringing togetherbusiness, research and the public sector to accelerate economic growth bystimulating and supporting business-led innovation. It has an extensive programmeo activities to support the inormation economy, including a collaborative R&DProgramme and an ICT knowledge transer network. It has also provided unding orthe Open Data Institute or its development o an ecosystem o companies large andsmall that use open data.

Most recently, the TSB announced a new Connected Digital Economy Catapult thatwill begin its rst projects in summer 2013 with unding o up to 50 million over ve

years. Working in collaboration with leading business, research and innovationpartners, the Catapult will address gaps in the digital economy innovation landscapeand help make it easier to take innovative products and services to market. The TSBalso runs the Small Business Research Initiative (SBRI) which helps innovativetechnology companies engage with the public sector to solve policy challenges.Since 2009, SBRI has awarded 1200 contracts worth over 100 million in total.

Clusters

It is widely recognised that industrial clustering can bring benets or the businesses

and organisations involved. Clusters create an environment where companies cancollaborate and innovate. Successul clusters help companies attract the best peopleand investment. There are number o established and emerging digital technologyclusters across the UK including Cambridge, East London, Manchester, Glasgow,Bristol, Malvern and Sunderland. These, and other, smaller, clusters eature highly onthe priorities o the relevant local enterprise partnerships (LEPs).

In April 2013, the Tech City Investment Organisation in East London brought togetherover twenty leaders and infuencers rom technology clusters across the UK andNorthern Ireland or the rst ever Technology and Business Cluster Summit. This ledto the creation o the UK Tech Cluster Alliance. One o the main objectives o the

Alliance is to help gain urther insight into the needs o technology clusters. TheAlliance set out a number o themes that will shape its uture work, namely: the needto change cultural perception around technology and entrepreneurship; nurturingtalent and skills; supporting high growth businesses; commercialising great ideas;and preventing intellectual property rom leaving the country.


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Case Study: Greater Manchester

The digital industries in Greater Manchester account or 7,300 businessesemploying 45,77017 people and generating approximately 2 billion per annum oeconomic output18. Alongside MediaCityUK, a 650 million digital media complexwhich is the new home o ITV and the BBC, the Sharp Project in EastManchester, is developing the next generation o digital businesses.

The digital sector is thriving and there are many examples o small businessesgetting investment and growing. Joining the 47 digital businesses already atSharp is EON Reality, one o the worlds leading interactive 3D solutions providersor businesses and education, which has established its European HQ and R&Dcentre onsite. At the corporate level Cisco, IBM, BT and Virgin Media all havesizable presence in Greater Manchester.

Access to FinanceHigh-potential tech start-ups and small businesses in the inormation economy sectorcan ace particular barriers in accessing the nance to grow into medium and large-sized rms. Technologically innovative ventures which are novel or consist mainly ointellectual property present particular challenges to investors. Tech entrepreneursoten lack tangible assets, and early stage ideas may not pay o in the timescalesinvestors seek.

The Government has taken steps to improve the investment environment or techcompanies and start ups. In Budget 2013, the stamp duty on shares traded on

growth markets, such as the Alternative Investment Market (AIM), was abolished andthe tax breaks oered to investors in a Seed Enterprise Investment Scheme wereextended into tax year 2013/14. The London Stock Exchange is also reorming rulesto make entry to the public market easier or entrepreneurs. The Intellectual Property


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Oce has also commissioned research to investigate barriers to the use o intellectualproperty rights and related intangible assets or debt and equity undraising.

Venture capital markets in the US tend to be more comortable with technologicalsectors than those in Europe, but there is a small but increasing number o UK

Venture Capital partnerships developing specialised unds or early-stage investmentin high tech rms. UK Trade and Investments venture capital unit helps high growthand innovative technology and lie sciences companies access early stage equityinvestment. A noteworthy success was attracting Tech Stars, one o the worldspremier accelerators, to choose the UK as its rst international expansion.

Action: The UK Tech Cluster Alliance will work with the Inormation Economy Counciland the various tech clusters in the UK to promote and acilitate connections andidentiy common barriers to growth. This will include consideration o access tonance issues such as the availability o venture capital or alternative orms onancing. We will also work to champion all UK tech clusters internationally to attractinternational investment.

Case Study: Duedil

Duedil is a London-based FinTech rm. It aggregates company data rom multiple

sources, links it and provides it online as part o a reemium business model, withthe basic product ree o charge and advanced due diligence eatures accessibleor a premium. This data analytics and visualisation engine covers 20 years oinormation on companies registered across the UK and Europe. Duedil hasattracted continued investment by innovating in the business inormation space,making inormation on private companies easily accessible and demonstratingsustained growth.

Duedils most signicant round o venture unding recently resulted in an injectiono $5 million, led by Notion Capital and joined by US VC rm, Oak Investment

Partners. This unding is being used to grow the companys data science andengineering teams to urther develop Duedils open data platorm. The recentunding has also enabled Duedil to begin expanding internationally, opening datain 20 new markets via its Application Programming Interace (API) in May 2013.

Interoperability and Standards

Business users and consumers want more not less interoperability to pull thethreads o their operations or lives together and to remove barriers. Successul

technology products and services depend on interoperability across dierentplatorms and international boundaries, underpinned by an internationally-acceptedramework o standards which promote competition and growth in the inormationeconomy sector. Increasingly, particularly in the inormation economy area, standards


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are being produced by organisations with no direct state links so called inormalor consortia standardisation.

Action: The Government, working through ETSI, BSI and other bodies in thestandards eld, will bring together a range o stakeholders to align programmes, tobuild on existing knowledge and to put the UK in the best position to infuence uturestandards at an international level.

We will ocus on ensuring that key building block standards are deployed to enablebusinesses to easily build innovative systems which remain open to urther new ideas.

This will include promoting the use o standards or IPv6 and securing DNS.

Alongside this we will ensure that new large concepts such as cloud computing,5G mobile and Internet o Things are better dened to enable ideas to be easilyincorporated into standards and services.

Market Opportunities

Supply Chains

Given that the inormation economy is a relatively new sector the nature o its supplyor value chains have been subject to some study. Within the inormation economy the

traditional linear supply chains o other business sectors are less likely to be observed;instead, there are more complex supply networks or ecosystems. The broad reach odigital technologies also means that inormation economy businesses are in manycases an integral part o the supply chain o other business sectors (such asautomotive manuacturing or nancial services), as well as within their own sector.

The Advanced Manuacturing Supply Chain Initiative was launched in 2011 tostrengthen the capability o UK businesses in global supply chains. The rst round ounding made up to 125 million available to help UK supply chains achieve world-class standards and encourage majornew suppliers to locate in the UK. A second

round is currently underway with 120 million to und R&D, skills training andcapitalinvestment, with a single pot open to all companies in manuacturing supply chains,including those rom the inormation economy sector.

UKTIs new Technology Partnerships programme seeks to increase the internationalperormance o UK high-growth technology companies through direct trade,collaboration and partnerships with global value chains. Through better understandingthe uture technology needs o multi-national and large national companies theprogramme helps companies access opportunities and create commercialpartnerships.

Action: The Inormation Economy Council will lead action to promote theopportunities available through the Advanced Manuacturing Supply Chain Initiativeand the Technology Partnerships programme, with the aim o increasing the numbero successul applications rom the inormation economy sector.


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Public Procurement

The Government is rebalancing how it purchases technology to deliver t-or-purposeservices. This new approach, based on openness, makes it easier or companies,including SMEs, to supply to Government. It also provides more support orinnovation and greater transparency, whilst providing users with services which areagile and responsive to changing needs.

The G-Cloud programme19 is simpliying processes and creating competitive andtransparent marketplace, supported by a Cloud First policy or central Government.

This makes it easier or SMEs to supply to Government, demonstrated by the act

that SMEs have taken over 60 per cent o G-Cloud sales to date. O the 708 suppliersinvolved in the latest G-Cloud ramework, G-Cloud iii, 83 per cent were SMEs.Government is also launching a Digital Procurement Framework or the supply o

Agile sotware development services, and like G-Cloud, it will be designed to beattractive to SMEs.

The Government has also introduced Contracts Finder20, a ree online tool to helpbusinesses nd inormation about opportunities to supply to Government. ContractsFinder includes tenders worth over 10,000, sub-contracting opportunities, what iscoming up in the longer term and details o previous tenders and contracts in

England. A number o large suppliers, including Hewlett Packard, CapGemini, Capita,and CGI have also committed to publishing subcontracting opportunities on the site.Similar sites are available or Scotland, Wales and Northern Ireland.

We have an aspiration that 25 per cent o central government procurement spendshould be with SMEs directly and in the supply chain by the end o the Parliament.IT presents the best opportunity to meet and exceed this expectation.

Central government spends 7 billion a year on IT. The majority o the major contractsthat make up this spend will come to an end in 2014-15.

We have made sure that the barriers to entry that government has or years put inthe way o small businesses have been lited. G Cloud, Contracts Finder and MysteryShopper are just some o the concrete steps we have taken to make it possible orSMEs to do business with government.

Through the reorm o procurement and as a result o the Governments agileapproach to produce better services (as detailed in the Government Digital Strategy),we will not renew long-term contracts. Instead Government will be able to breakdown these contracts to specic tasks. This will minimise risk and cost whilstproducing better services, and allow a host o new vendors, including SMEs, tocompetitively bid or public work.

As the market sees the costs o technology all and the capability o cloud servicesgrow we anticipate this more dynamic, more open market will develop with a higherlevel o SME involvement and reduced costs or Government and this is already


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happening. More than 60 per cent o the contracts let through the G Cloud have goneto SMEs and we anticipate this being the new normal or Government contracts.

As part o eorts to deliver the 25 per cent aspiration and achieve better value ormoney or the taxpayer, we think at least 50 per cent o spend on new Government ITcould fow to SMEs. And in the exceptional cases where large IT contracts arerequired, we will expect at least 25 per cent o the supply chain o those contracts togo to SMEs.

As well as addressing what central government does, Government continues toencourage larger local government and NHS procurement chains to ollow similar

practice.

Case Study: New Correspondence Handling System or BIS

A new correspondence contract, awarded through G-Cloud, will save BIS500,000. IT solutions company Fivium, a London-based SME has beenawarded the contract or the new BIS Ministerial correspondence handlingsystem saving the Department around 500,000 on current costs. Fivium willprovide the new eCase system, which will replace the current platorm in

August 2013.

The new contract brings a range o benets, including: using a shared service orsupport and cloud hosting; improved reporting acility; improved search acility toenable users to nd previous cases relating to the subject.

Government also wants to make it easier or its suppliers once they have woncontracts, by encouraging the use o electronic invoicing. Our aim is or centralGovernment to use electronic invoicing or all transactions. Some local authoritiesand NHS trusts are already using e-invoicing, and have realised signicant eciencysavings as a result. Government will not mandate suppliers at this stage, but will look

at ways to spread best practice, and will track progress with a view to taking action irequired at a later date.

For UK businesses, particularly small and medium sized enterprises, to realise theull benets o e-invoicing, it is important that the systems are easy to install and use,and pricing is fexible enough to suit the needs o diverse businesses. E-invoicingproviders have committed to looking at ways to improve interoperability andaccessibility o e-invoicing or SMEs, including through the Business ApplicationSotware Developers Association interoperability charter.

Opportunities to ExportAmong the G7 nations the UK is the highest net exporter o computer and inormationservices. In 2011 the UK exported telecoms services worth around 5 billion,computer services worth around 7 billion and inormation services o around


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2 billion21. UKTI supported 2,799 companies involved in ICT during 2012/13 andengaged in 67 technology events and missions. It oers targeted overseas missionssuch as the Smart Cities, Future Cities mission to SE Asia, the Future Health Missionto the US and the Web Mission to India. Its Tradeshow Access Programme supportsSMEs to attend trade shows such as the Mobile World Congress in Barcelona.

UKTI and the TSB have worked together on a number o missions to support highgrowth, innovative and early-stage UK SMEs to visit countries strong in innovationand enterprise. These missions are designed to help SMEs make new connectionsand meet potential investors, suppliers and customers. The missions have been

organised by entrepreneurs or entrepreneurs and are backed by public and privatesector support.

The rst Cyber Security Export Strategy22, building on the UKs strength in cybersecurity, was launched in May 2013. The strategy sets out the commitments theGovernment has made to promote UK companies in this rapidly growing market,estimated to be worth in excess o 100 billion. The strategy aims to deliver acatalogue o UK companies operating in cyber security, analysis o overseas markets,guidance on emerging export controls and cross-Government co-ordination o eort.Providing greater access to overseas markets or SMEs is a key theme in the strategy,as is the necessity to create pan-Government support or this initiative. One o theprincipal mechanisms or achieving eective engagement between exporters andGovernment will be the Cyber Growth Partnership.

Promoting the Sector

The success o the inormation economy sector in the UK relies on ensuring thatoverseas businesses and investors are aware o the UKs strengths in the inormationeconomy and our supportive environment or businesses who want to locate here.Between Government and the sector, we also need to ensure that the success o theinormation economy in the UK is championed and promoted, and that citizens and

businesses are aware o our track record, and the jobs and services it oers.

UKTI has a package o support designed to reinorce the UK as the location o choiceor investors, and to help deliver the Governments aspiration to become the numberone European destination or oreign direct investment rom emerging markets. Thisincludes building on the success o the Tech City Investment Organisation, enhancinginvestment support in emerging markets, attracting the worlds best entrepreneursthrough the Graduate Entrepreneurs Campaign and the Global EntrepreneurProgramme.

Action: The Inormation Economy Council will work with the sector to promote andchampion the importance o the inormation economy to the UK.


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Actions: UK Businesses Across the Economy making Smart Use o Inormation Technology and Data | 25

Inormation economy businesses, and the digital technologies they provide, have thepotential to impact and transorm companies and organisations across the wholeeconomy. The benets rom digital technologies come rom their adoption by allcompanies and organisations, particularly those where adoption o technology andbest practice has been weakest to date. It is our shared ambition that allorganisations, especially SMEs, can be condent and successul consumers odigital technologies able to trade online, seize new technological opportunities,and increase their revenues in both domestic and international markets.

Some business sectors have already been transormed by inormation economytools, rom news and media gathering, to retailers using real time analysis o

customers shopping habits to transorm the services they oer; through to transportand logistics companies monitoring shipments. Other sectors are beginning toembrace the opportunities, or example, the construction sector improving qualityand eciency through building inormation modelling sotware. Opportunities or theinormation economy sector to impact still more deeply include healthcare, FinTech,the creative industries, smart energy and cyber security.

Developing Our Online Economy

Both the European Digital Single Market and the rest o the world oer signicant

commercial opportunities or our competitive online businesses. However, in manycases companies ace dierent regulations and requirements depending in whichcountry they wish to trade. Complying with these dierent requirements is timeconsuming, resource intensive and adds cost, making it more dicult to competewith domestic companies. The ragmented regulatory ramework can also sapconsumer condence to buy goods and services cross-border within Europe,hindering the exploitation o the Digital Single Markets potential. These challengesalso apply at the wider international level.

The Government has thereore established a time limited e-commerce taskorce

consisting o key online companies, SMEs, the retail industry and consumerorganisations. Objectives o the taskorce are to identiy key barriers and obstaclesor industry and consumers to trade cross-border in the EU and recommend industryshort-term actions to boost UK cross-border trade. This e-commerce taskorce will

4 Actions: UK Businesses Across theEconomy making Smart Use oInormation Technology and Data


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also identiy UK negotiating priorities or the EU Digital Single Market to be takenorward. The ndings and lessons relevant to urthering e-commerce opportunitiesbeyond Europe will also be actioned.

Action: The e-commerce taskorce will report back in June 2013, with the InormationEconomy Council taking orward appropriate action as required.

Helping SMEs Online

There are particular benets or SMEs who make ull use o the internet, and

associated activities such as e-commerce. According to McKinsey research, theygrow aster, export more, and create more jobs23. Services such as cloud computingallow companies to operate in a cost eective and fexible way, through mobileaccess to computing and data, the ability to quickly scale their computing capabilitiesas business needs change, and digitising back oce operations to reduce start upand operating costs.

The UK has the most advanced online market in Europe, and there are opportunitiesor SMEs to increase their online presence and sales in both domestic andinternational markets. Rates o international online trading are particularly low, withewer than one in ten UK SMEs selling to customers overseas. To address this, UKTI

has developed the Export Communications Review service and the Web Optimisationor International Trade programme, both o which provide companies with supportand advice on improving their export potential or overseas markets. Companiesaccessing support to trade online will also be signposted to these service.

Case Study: Cambridge Satchel Company

The Internet helps companies notjust to grow, but to scale more

easily. Julie Deane, ounded TheCambridge Satchel Company in2008 at her kitchen table withcapital o just 600. She set up abasic website at little cost and withno prior training. The companywhich employed just 7 people in

2010, now employs more than 90 people, is stocked in more than 100 countriesand has 2 stores o their own, one in London and one in their hometown oCambridge. From year end 2010 to year end 2011 there was a 60 per cent

increase in prots and rom year end 2011 to year end 2012 there was an 82 percent increase in prots.


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Case Study: Hall-Fast

The internet helps companies reach overseas markets.Hall-Fast, an Industrial Supplies Companyheadquartered in Nottinghamshire, used to ocussolely on the UK market. Following advice romUKTI, Hall-Fast developed a strong online strategy.It extended its use o the internet, launching 100,000products on the company website, which grew to

14,000 pages. Over three years this resultedin over 600,000 o sales in export markets andHall-Fast now has customers in 75 countries aroundthe world.

However, many SMEs are not currently making the most o these opportunities,with recent studies showing that ewer than a third o UK SMEs transact online24.

The reasons cited by SMEs or not trading online include technical issues, such asreorganising business processes and systems, skills issues, including a lack ospecialist knowledge or capability, and trust issues including concerns about security

and a lack o trust in available advice.Action: Industry, in partnership with Government, will launch a programme thisautumn to get more SMEs transacting online. The programme will target both thoseSMEs who are already online in a basic way but are looking to transact online, andthose SMEs who are transacting online but are looking to scale up. The intention othe programme is to reach 1.6 million businesses over the next ve years. It will buildon existing support to SMEs including advice on improving their cyber security andprotecting their intellectual property.

The programme will equip both groups with the tools and skills they need to

eectively trade online (in both domestic and international markets) and to grow theirbusiness, through a series o targeted activities including awareness raising, a webportal with online tools, and a network o digital advice centres oering training,mentoring, and access to voucher schemes.

It is also important to ensure SMEs trust and have condence in the internet.The Government is seeking to educate businesses and other users on cyber securitythrough guidance or small businesses and the Get Sae Online campaign.


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Driving Growth Through Data Science

Using data intelligently to provide insight and value has the potential to transormbusinesses and organisations, and support our strong research base, by drivinginnovation and economic growth. Developments in data analytics and access toscalable high perormance computing allow or real time analysis o data. Exampleso this transormative eect include the processing o share price data in support oreal-time dealing on the stock market, virtual prototyping which has transormedmanuacturing and design, or the insights into customer shopping habits gainedby retailers.

The UK has the opportunity to take a lead in the global eorts to deal with thevolume, velocity and variety o data created and analysed each day. With thedevelopment o smart cities and the internet o things, as well as advanced researchprojects such as the Square Kilometer Array (see below), data will increasingly beproduced at a rate that means that current techniques are insucient to ully exploit it.

We need to build the capability and the capacity in the UK to be at the oreront oextracting knowledge and value rom data or the benet o citizens, business,academia, and Government. Excellence in data handling would mean that UKorganisations can reap the benets o big data analytics, and ensure UK inormation

economy businesses are able to export this expertise to the world.

This will require continued investment in and development o the physical and virtualinrastructure, such as high perormance computing and data centres. We also needto boost our workorce skills and the research base o data scientists and analystsacross disciplines. There is a real opportunity to develop that capability and capacity,and at the same time create new business opportunities, through solving real worldproblems and challenges. Some o these might come rom research and academia,but others may come rom Government or rom industry itsel.

Government holds and analyses a vast amount o data, and is leading the world in

making that data available. Deloittes market analysis25, published alongside StephanShakespeares review26 o public sector inormation in May 2013, gave a value o1.8 billion per annum as the direct economic benet rom re-use o public sectorinormation, and 6.8 billion per annum when wider economic and social impactswere considered. The Government response to the Shakespeare Review broadlyaccepts the recommendations, which include the recommendation or a growth-ocused national data strategy to provide business with clarity about theGovernment policy on open public data, and provide the certainty needed toencourage innovation and investment in new data-driven opportunities.

We accept this challenge, and would go urther still. Our aim should be not only toarticulate the Governments uture plans on data, but to set out our partnershipapproach to data science success in the UK. The onus cannot only be onGovernment to stimulate the market through data release and sharing. Companies


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and organisations across business sectors have a vast supply o data to be analysed.They could thereore benet rom advances in data science and analytics. We shouldexplore how industry and academia can collaborate to stimulate development o dataanalytics and i there are barriers to doing so, how they can be resolved.

Action: The Government will publish a data capability strategy in October 2013,developed in partnership with industry and academia. The strategy will build on therecommendations in Stephan Shakespeares review and the Prime Ministers Councilor Science and Technology report on algorithms27, and will be published alongsidethe Open Government Partnership National Action Plan. The strategy will include:

Measures to build capability in the commercial and academic sectors

Opportunities or collaboration on real-world problems, such as through theOpen Data Institute, the Government Immersion Programme, or the TechnologyStrategy Board

Skills initiatives ocused at schools, higher and urther education, and continuingproessional development

The public sector holds and analyses a vast amount o data, and is leading the worldin making that data available. Through the Government response to the Shakespeare

Review the Government has announced the ollowing: HMRC will consult over the summer on options or making some o the data

that it holds more widely available to support the Governments transparencyand growth objectives, such as improving access to credit or business.

The consultation will include options or the wider sharing o aggregated oranonymised data and the release o some VAT registration inormation (notincluding nancial data) as open data

The Charity Commission has announced plans to make data rom the publicregister o charities reely available to download and use by the end o March 2014

The Government has announced a call to arms or open data in local government,with a local section o data.gov.uk, case studies o best practice, with a revised

Transparency Code or Local Authorities expected shortly

The Government has published its response to the Administrative Data Taskorcereport, in which it agrees to work with the research community to develop thecapacity and inrastructure to complement the open data agenda by acilitatingsecure access or research and statistical purposes to de-identied administrativedata that can not be made open

The Postcode Address File (PAF) is a ully integrated part o Royal Mails business

and will continue to remain so. In recognition o the continued importance o thisdataset to innovation and growth, the Government has been working closely withRoyal Mail to improve the licensing regime and drive greater take-up o the data.

The Government is now announcing that, rom the beginning o July, Royal Mail


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will provide the PAF or ree to independent* small charitable organisations and reeto independent* micro-businesses or one year. Royal Mail will also be increasingthe number o ree online address look-ups on its website rom 15 to 50 per day.In addition, Royal Mail will consult in July on a radical simplication o the licensingregime or all customers based on a permissive licence with minimal restrictions.

Supporting Academia and Research

The UK is a centre o academic excellence, and just as business sectors have seentheir business models transormed by the inormation economy, so too is our

education sector. Our universities, supported by Research Council unding or PhDstudentships, play a vital role in the provision o doctoral and graduate level skillswhich make the UK a good place to develop technologies. Through online oeringssuch as Massive Open Online Courses, the UKs world-renowned academic sectorcan vastly improve its reach and its audience, including growing our educationexports. Massive Open Online Courses provide the opportunity to address some oour specic inormation economy skills issues.

The UK research base is world-leading in its eciency and we rank strongly in termso international collaboration. The inormation economy supports data-driven science,

where the UK has some ambitious projects in disciplines as varied as bioinormatics,autonomous systems, and radio astronomy. High perormance computing and dataanalytics can support research and development through virtual prototyping,revolutionising the way new products are developed and tested. As computers moverom being merely programmable to the ability to learn, and as more data becomesaccessible through cloud computing and open data initiatives, new opportunities ariseor the combination and analysis o data rom disparate sources in ways that arecurrently impossible.

* Independent not associated or aliated with any existing Solutions Provider


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Case Study: Square Kilometer Array

ImageCourtesyofSKA

The Square Kilometer Array (SKA) will be the worlds largest and most sensitive

radio telescope, consisting o thousands o linked radio wave receptors locatedin Australia and Southern Arica. The telescope will be used to addressundamental unanswered questions about our Universe. This is a global projectled by the SKA Organisation based at Jodrell Bank Observatory in the UK.Processing the vast quantities o data which will be produced by the SKA willrequire high perormance supercomputers and analytical techniques ar greaterthan those which exist today. The inormation economy in the UK can play akey role in developing the sotware and computing which will enable the SKA tobe successul.


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Actions: Ensuring Citizens benet rom the Digital Age | 33

Action: The Government intends to coordinate its own eorts on digital inclusion andis setting up a new team based in the Government Digital Service to lead andcoordinate Government activity in this area. The team will develop a delivery-ocusedstrategy or central Government, and liaise closely with other public, private andvoluntary sector stakeholders to look or opportunities or shared programmes owork. The team will work alongside Martha Lane Fox and Go ON UK to providesupport as they roll out their partnership model. The team will support the embeddingo digital skills in relevant policy areas, and will develop the evidence base on successin the digital inclusion area. Success o the team will be reviewed in 2015/16.

Case Study: Go ON Liverpool

Go ON Liverpool was a national and local cross-sector partnership campaign.According to Go ON UK, in June 2011, 29 per cent o adults (104,000 people) inLiverpool had never been online, compared with 17 per cent nationally. 1,500digital champions were recruited to deliver the message and provide training. In18 months, the Go ON Liverpool campaign led to a 55 per cent reduction inadults in the city who had never gone online, and Liverpool had 43,000 newinternet users. This compared to a 13 per cent drop nationally. The campaignhad political, business and community support: all 90 local councillors backed it,80 local partners supported it, each promoting a specic, targeted benetmessage appropriate and meaningul to the local people and businesses they

reached.


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Action: Following the success o Go ON Liverpool, this year Go ON UK and itsFounder Partners will aim to supercharge the activity o local partners and helpimprove basic online skills in the North East o England. This programme will provideurther evidence o the impact o partnership working to drive up digital skills, andbuild a replicable partnership model that can be urther rolled out across the UK.

Transorming the Delivery o Government Services

The Government Digital Strategy ocuses on making public services more relevant,responsive and convenient, with the ambition that it should be as easy to deal with

Government online as it is to bank online. Government began its digital transormationlast year with the launch o GOV.UK (https://www.gov.uk/), a simple, single platormor all interaction with Government, which is updated constantly. GOV.UK bringstogether hundreds o Government websites in a clear and consistent ormat.

Government is ensuring that appropriate assisted digital support is in place or peoplewho are not online, or who do not have the digital skills to access these onlineservices. People who need support will be able to access services in non-digitalways, including ace-to-ace or by phone, or with support to input their data into thedigital system.

Action: Over the next year, 25 o the top 50 public services will be transormedacross eight dierent Government departments.
https://www.gov.uk/https://www.gov.uk/


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Two specic examples o these transormations are below:

Case Study: HMRC Tax

Whilst the tax system is highly digitised, it still treats small businesses andindividuals as separate entities. Government plans to launch a single tax accountin the second quarter o 2014, which will allow an additional ten millionCorporation Tax submissions to be completed online. People will also be able tomanage all their tax aairs through this single account and update their details.

Businesses will get a single, digital view o all their tax aairs, and be able tocheck at a glance that all their inormation is in order. Tasks like setting up PAYEor a new employee or applying or tax credits will take just a ew taps on a tablet.Our digital transormation will substantially reduce the need to pay or expensivespecialists to navigate the tax system.

Case Study: DEFRA: Common Agricultural Policy Payments

Currently, Government administers around 40 Common Agricultural Policyschemes, which pay over 100,000 armers and traders more than 2 billion eachyear in EU subsidies. Farmers have to complete paper orms asking questionslike how many elds, woods, ponds do you have?, and mark these on papermaps. That means details on more than two million parcels o land, all on paper.

This wastes time or armers, and the systems required to manage it are socomplex that errors are inevitable which leads to EU nes averaging over80 million every year since 2005. Moving this service online will make itaccurate, timely, and built around the needs o armers. The Common AgriculturalPolicy is an inherently complicated system, but through digital transormation, wecan make complex systems work well or users.

The devolved administrations have also prioritised improving their own digital services.In Scotland, the Scottish Government published Scotlands Digital Future Supporting the Transition to a World-leading Digital Economy in May 201333. Thereport assesses the role that the public sector in Scotland is playing in stimulatingthe digital economy and proposes actions that could be taken collectively and inpartnership with the private sector to ensure that Scotland develops and sustains aworld class digital economy in the uture. In Wales, Delivering a Digital Wales is theWelsh Governments policy ramework that draws together the key activities andinterventions relating to the use and promotion o digital technologies in Wales34.

In Northern Ireland, the Department o Enterprise, Trade and Investment hasdeveloped the Telecommunications Action Plan 2011-2015, which incorporates theLogonNI programme35 and recognises the need to eliminate the digital divide and


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make inormation economy available or all. This is underpinned by the DigitalNorthern Ireland 2020 initiative36.

Opportunities or Consumers

EU Online Market

Consumers in the inormation economy need to eel secure in order to makepurchases and use digital services. The Governments strategy or digital connectivity,content and consumers will set out a wide range policies and activity to help people

to eel condent in navigating their way around the online world.

With the international online market and the opportunities or cross-border trade,consumers should be aware o what the implications are when they are buyingservices or products on terms dierent rom those established under either UK or EUlaw. There are particular rules governing the choice o law when businesses trade withconsumers in a dierent country37. Essentially, these rules make clear that where abusiness trades in the UK to UK consumers any legal protections that cannot becontracted out o, will apply whichever law is chosen to govern the contract. Throughthe Consumer Rights Bill the Government is making domestic consumer law clearer

on what rights consumers have when purchasing digital content, including whendownloaded or streamed rom the Internet. These protections will not be able to becontracted out o.

UK businesses have a major share o the EU e-commerce market. The Governmentis encouraging the European Commission to create the best possible regulatoryenvironment within the European Single Market. A key element o this will be theConsumer Rights Directive. This, when implemented, will introduce clear pre-contractual inormation that must be provided beore a consumer buys anythingonline rom a trader. This will include clear pricing inormation and contact inormationabout the trader, and or digital content sales will also include key inormation on

unctionality and interoperability. The Consumer Rights Directive also claries thegeneral rule that there is a 14 day right to cancel an online purchase, and the rightsand obligations o traders and consumers ollowing a cancellation.

Action: The Governments e-commerce taskorce, as well as looking at barriers tobusiness trading online, is also addressing how it can be made easier or customersto shop across borders.

Midata

The inormation economy, and particularly digital services, can provide consumerswith useul inormation such as purchaser rights, product availability and data privacy.Government and industry working together want to allow consumers access todata about themselves their energy usage, spend on utilities, or purchasing habits.

The midata programme has been established or this purpose.


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Through the programme Government is encouraging rms to release transactionaldata back to customers in a machine readable, portable ormat. This could helpconsumers access services to nd a better deal, or give them new insights into theirspending habits, especially where combined with open and volunteered data. TheUK, along with the US, is a world leader in this approach to empowerment. There arereal opportunities or innovators to help customers understand the value and uses otheir data. US initiatives such as Blue Button, which gives military veterans access totheir medical and health care data, show the opportunities or Government to providedata to its citizens. Combining private and public sector data around the individualcan be powerul in both economic and social terms.

As part o this programme, the midata Innovation Laboratory has been set up asa voluntary accelerator project in partnership between Government, the OpenData Institute, the Inormation Commissioners Oce, business and consumerorganisations. The laboratory will stimulate innovation in data services andapplications and demonstrate the growth potential o midata. From our work withthe lab we expect to gain insights and understandings or uture policy and datamanagement developments, including security in data sharing. The Government hasalso established a number o Consumer Condence and Trust working groups to lookat a range o potential security and privacy issues aecting the sharing o personal

data, examining current data protection rameworks and practices and assessingwhether the midata initiative creates the need or additional saeguards. The groupsare drawing on contributions rom business, regulators and consumer representativesto identiy current best practice which can be shared to provide guidance to businessand set expectations amongst customers.

Action:The Consumer Condence and Trust working groups are due to report in thesummer, ollowing which the Government will set out plans to implement the agreedrecommendations.

Smart CitiesMany o our most pressing societal challenges maniest themselves in our cities.Urbanisation is growing apace in emerging markets, where the growing middle classis demanding cleaner, more sustainable and healthier urban environments, withreliable sources o energy and less congestion. City leaders the world over are turningto integrated intelligent or smart systems and concepts to deliver vital publicservices, or example:

Healthcare: assisted living, patient monitoring, digital records and hospitaladministration

Smart energy grids: demand management, renewable energy integration

Transport: trac and congestion management, road user charging, emergencyresponse, public inormation systems, smart parking


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Water management: consumption monitoring, wastewater treatment,environmental saety systems, and food management

Waste management: waste collection modelling.

As part o the evidence base or this Strategy, the Government has commissionedArup to analyse global supply chains related to smart cities. Arup estimated that theglobal market or smart urban systems will amount to $400 billion per annum by2020. On the basis o the UKs share o OECD tradable services, it conservativelyestimates the UK should aim to secure 10 per cent o the global market, worth $40billion per annum. The provision o smart solutions thereore represents a signicant

global market opportunity and a means by which UK cities can address their ownchallenges.

UK rms are at the oreront o developments in this area. We have world-leadingcompanies in project management, engineering, architecture, energy and transportsystems, communications and the digital economy, nance, legal and insurance.Our ability to bring together the cluster o companies needed to design, nance, riskmanage and execute large inrastructure projects makes the UK a major global centreor such projects. We are recognised or our expertise in integration, and trustedbecause o our long experience with maintaining and managing city inrastructure.

Business strength is supported by a world-class and internationally recognisedresearch capability in the built environment and city systems. Our ambition is toconsolidate this position and make the UK a global hub o smart city delivery.However, competition is intensiying and cities around the globe are seeing theopportunities aorded by smart solutions and taking action.

The Government recognises the barriers to, and the opportunities o, smart cityconcepts and a range o activities are underway, or example:

RCUK is unding a number o projects under the Digital Economy Programme,such as Digital City Exchange and Liveable Cities, to improve understanding o

how to design smarter cities The British Standards Institution is developing a strategy to provide standards and

guidelines to help deliver smart city solutions at scale

The Energy Technology Institute is designing and testing a commercially viableSmart Energy System, which will acilitate improved heat management and lowcarbon energy services across the UK

The Technology Strategy Board is investing 24 million to und a large scale FutureCities demonstrator in Glasgow, 3 million each to Bristol, London andPeterborough, a urther 50 million over ve years to create a Future Cities

Catapult in London and 5 million in an SBRI competition to support innovativecompanies to create new solutions to challenges identied by UK cities.


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The Future Cities Demonstrator in Glasgow will enable businesses in Glasgow to test,in practice and at scale, new solutions or connecting and integrating their citysystems, to deliver practical benets or visitors and residents, attracting hi-tech jobs.

The programme encompasses several projects:

The creation o an Integrated Operations Centre managing public space CCTVnetwork and TRAFFCOM roads management systems

Sustainable Glasgow addressing issues such as energy conservation andgeneration, greater use o green technology such as white street lighting, airpollution and the integration o transport routes

The creation o a Big Data Store collecting and analysing inormation rompreviously unconnected databases to infuence uture city services and make itmore accessible to more organisations

Setting up a centralised City Dashboard giving the public and agencies real timeinormation via smartphone apps38 on subjects like trac fow, rail and busservices, weather, accident and emergency waiting times.

Image courtesy o Steve Hosey @ GCC

However, to remain at the oreront o this agenda, we will pursue the ollowingactions to improve our understanding, co-ordinate policies more eectively andensure UK rms are able to exploit their capabilities in global markets.


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Action: The Government will establish a Smart Cities Forum, comprisingrepresentatives rom Departments, cities, business and the research community.

The Forum will bring together those with an interest in smart systems to developand coordinate policy more eectively. It will provide advice to Ministers and localgovernment leadership, ensuring that policy makers and city leaders are inormedby a global perspective o best practice.

Action: Through our data capability strategy the Government will examine theeasibility o a (randomised control) trial through which public data is made available topilot cities.

Action: BSI will work with stakeholders to identiy where standards can help addressbarriers to implementing smart city concepts, including the interoperability o systemsand data sharing between agencies, promoting the uptake o smart cities.

Action: UKTI will work with the Smart Cities Forum to ensure that UK rms aresupported in their eorts to export their expertise in world markets.


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Actions: Underpinning the Inormation Economy in the UK | 41

The vision or the inormation economy sector is underpinned by three actors.First, a highly skilled digital workorce (whether specialists who provide inormationtechnologies or non-specialists who use them). Second excellent digital inrastructure(both physical and regulatory). Third, a ramework or privacy and security. Thecombination o these will support growth, innovation and excellence in the economyas a whole.

Improving Skills Across the Workorce

To reap the economic and social benets o the digital economy the UK needs astrong fow o uture talent, a skilled workorce and a digitally literate population. Weneed people who can use applications and apply technology as well as people whocan invent and develop the technology and applications o the uture. We want theUK to be a global leader, excelling in cutting edge technologies like Big Data, CloudComputing and Cyber Security.

But there is a paradox. Young people are increasingly using digital devices andaround 129,000 new recruits are needed each year in the sector; this is orecast togrow at almost twice the UK average through to 2020. At the same time, data showsa declin

Information Economy Strategy

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