Digital investment could boost the UK economy by £232bn over the next 20 years, a study by Virgin Media Business and Centre for Economics and Business Research (CEBR) has found.
The importance of technology and digital transformation in the UK’s post-Covid-19 economic recovery has been highlighted many times.
CEBR examined how Covid-accelerated adoption of digital transformation could impact six areas: health, local government and defence, specialised and digital retail, professional services, education, and construction, and how this could impact the UK economy as a whole.
According to the research, UK gross domestic product (GDP) could grow by £74bn by 2025, a 2.8% increase from a predicted baseline in which there is no accelerated adoption of digital transformation initiatives.
This increase is predicted to reach £127bn by 2030 and by 2040 the figure could be £232bn, representing a 6.9% increase in GDP.
For the private sector, specifically construction, professional and retail services and retail, this could mean a £40bn boost by 2040.
The researchers attributed this potential growth in GDP to increased investment in digital transformation projects and fast adoption of digital technologies, such as those need for flexible working, the digital delivery of services and the creation of larger and richer training sets for machine learning.
Roei Haberman, head of telco, media and technology at NTT DATA UK, said: “This latest study is evidence of the urgent need for continued and significant investment in the digital economy. Embracing digital is critical for post-COVID recovery, enabling businesses to cater for current consumer demands for online channels. Businesses will be particularly keen to encourage technology skills in their workforce, helping them deliver to customers now comfortable with digital-first services.”
“With the help of government, businesses now need to support the development of technology skills in their workforce – the fundamental bedrock of the digital economy of the future. This needs to happen through training employees internally, as well as reaching out to the rich pool of talent that has been left unemployed during the pandemic. Developing a strong next generation of leaders will help to forge the UK’s path as a global centre for R&D and digital innovation in the decades to come.”