Thinking beyond Brexit: the future economy will be a digital one
SOMETIMES it's hard to contemplate the lost productivity and the huge Brexit-related costs that have now become part of everyday life for both the public and private sectors.
Just last weekend the CBI's director general Carolyn Fairbairn warned that the UK risks slipping into an economic crisis unless MPs intervene to stop a no-deal Brexit. We are now at the point of a national crisis and she called directly on all MPs to prevent the country from going over the cliff.
In Northern Ireland, the lack of political representation has disappointed people far and wide. But the CBI along with other business representatives, the farming community, universities and civic society, have all come together to send a clear and consistent message – a no deal Brexit is not acceptable and will bring about untold damage to the local economy and living standards.
Despite the relentless demands from Brexit-related work, it is hugely important that the CBI in Northern Ireland continues to make progress on other significant economic issues. Our prosperity agenda in 2019 seeks to influence core issues that really matter to business such as industrial strategy, skills, infrastructure, tax and regulation policy, innovation and trade. In this regard, it was great to engage in a CBI event last week where the word ‘Brexit' was not mentioned once.
CBI's ambition to grow the Northern Ireland economy is dependent on creating the right conditions for high-valued added sectors to thrive in a globally competitive environment. The digital sector is one such area and the CBI, through its newly created Digital Forum, is now taking the lead in shaping the policy climate for the digital sector. During 2019 we shall be working on bridging the gap between digital companies and government policy to allow Northern Ireland's digital sector to grow and flourish.
Digital technologies have taken the world by storm in the last two decades as mobile web access, artificial intelligence (AI), machine learning, cloud computing and sophisticated devices all provide us with increasingly efficient ways to do business and access people goods and services. Such technologies are transforming our economy, our public services and the way in which we live our lives.
Both directly and indirectly, the local digital sector is worth around £3.2 billion to the Northern Ireland economy and it directly employs nearly 30,000 people. However, what is most interesting about the digital sector is its impact on the productivity of virtually every other sector in the economy ranging from construction through to hospitality. With Northern Ireland's productivity levels sitting significantly below the EU average, harnessing our digital capability is an economic prize that cannot be ignored.
The CBI's 2018 reports entitled 'Ostrich to Magpie' and 'Disrupting the Future' set out the value of technology adoption for businesses of all sizes and sectors. Chief executives across Northern Ireland already recognise that digital transformation is going to be a huge disrupter to their businesses in the years ahead; with AI taking the top spot for the technology most likely to impact firms over the next five years.
But to harness the digital sector's full potential, the foundations of digital transformation must be right. The OECD's latest Digital Economy Outlook proposes that the correct foundations should include: co-ordinated government policy, enhanced security policy, the fostering of effective use of advanced technologies across industries and, of course, improving connectivity.
The first of these foundations ‘policy co-ordination' for the digital sector cannot be overstated. The co-ordination between education and industry is critical not just for providing a digital labour force, but also because citizens must also be able to succeed in a rapidly emerging digital world.
The OECD has called on countries to step up their efforts, invest more in education and skills in this area and encourage greater use of advanced technologies like big data analysis and cloud computing.
Work done by the CBI's new Digital Forum have identified several challenges for this sector that we must tackle if it is to grow sustainably. First and foremost, digital skills are critical, and we must ensure that the region has enough school-leavers and graduates that are proficient in the digital space.
Even though salaries in the digital sector are significantly higher that the average salary across Northern Ireland, this sector is currently failing to attract enough young people.
Education around digital skills needs to start in early years schooling, but equally important is the need for parents to recognise that digital is an exciting and lucrative career path for young people. Northern Ireland's new 'systems and software development' A-Level is probably one of the most beneficial qualifications a pupil can acquire from an economic and a future-proofing perspective. The more schools and colleges across the region offering it as an option, the better.
A young person's ability to write computer programs in languages that are used widely in the industry is one of the most valuable skills to have in the world today and any pupils that acquire those skills will have a huge competitive advantage. In this regard, industry needs to work closely with the education sector, helping to design curricula, keeping teachers up to date with industry developments and requirements. Furthermore, careers advisers must be supported by the industry to ensure that the true messages around digital careers are getting through.
Ultimately, we need more young people in Northern Ireland studying computer science and software engineering courses at university and further education courses. The cap imposed by the former local Executive on local university places which restricts the number of local pupils enrolling in such courses will also have to be addressed if this sector is to succeed.
Degrees, post-graduate conversion courses and higher-level apprenticeships are all fantastic routes into this lucrative and growing sector and careers advice should be tailored according to the best route for the individual student.
When it comes to the digital sector there is plenty to be done, but the CBI is up for the challenge. Tackling the skills gap and ensuring local policy keeps pace with the digital world will reap enormous benefits not just for the local economy and productivity levels, but by getting this right, we can deliver interesting and well-paid jobs for our young people.
:: Angela McGowan is the CBI Northern Ireland director