New report paints a mixed picture for the UK on digital transformation

The Economist Intelligence Unit (EIU) conducted quantitative and qualitative research across a number of countries and found that access to high quality network infrastructure, access to talent with the requisite digital skills and a vibrant technology ecosystem are increasingly a core competitive advantage for countries and companies alike.

The ‘Connecting Capabilities’ report was undertaken by the EIU and includes the first Asian Digital Transformation Index, which ranks 11 countries in the region against three global comparators – the UK, US and Australia.

The research is based on 20 indicators covering digital infrastructure, human capital and industry connectedness – the building blocks of success in the modern economy.

>See also: Preparing your business for digital transformation

The report paints a mixed picture for the UK – it lags behind the US, Australia and Singapore overall. This is despite the fact the UK leads the way when it comes to industry connectivity measures, but this just shows there’s plenty of room for growth when it comes to human capital and digital infrastructure.

Digital infrastructure is a crucial foundation

One area the UK underperforms compared to other markets such as the US, Singapore, South Korea and Hong Kong is in the measures of the quality of digital infrastructure, including 4G coverage of the population and investment in telecommunications as a percentage of GDP where the UK came last.

With more than 90% of executives interviewed suggesting that a country’s digital infrastructure is important to their business success, this should be a challenging result for the UK given the potential for underperformance in this area to become a drag on economic performance.

Indeed this might be a motivation behind the Government’s recent announcement of a £1 billion plus investment to boost broadband speeds and trial superfast 5G mobile networks in the UK.

The report reinforces the notion that overall western countries have an edge in existing digital infrastructure: four in 10 executives (38%) in Australia, the UK and the US say their country has been “very successful” in this regard compared with only about three in 10 (27%) in Asian economies.

Whether this can be maintained for long is questionable when investments the size of the Chinese Government’s US$180 billion investment in telecommunications infrastructure are underway to close the gap.

Leading in industry connectivity

In the report, industry connectivity is broadly defined as the ability to draw on resources external to the organisation to drive digital transformation and could also be seen as the strength of a country’s technology ecosystem.

The report measures this in terms of the strengths of digital partnerships, size of the e-commerce market and open data availability, and it is an area in which the UK performed very well.

The UK had the highest score in this category at 93.2, followed by Australia with 79.4. Japan scored 78.9 and the US 77.0.

>See also: The 6 steps to insurance’s digital transformation

Outperforming the home of Silicon Valley in this area might be a surprise to some. However, traditionally, there has been some external resource sharing amongst industries across UK and Europe, and London’s rich start-up community in particular is bringing talent and expertise into the UK.

However, it remains to be seen if Brexit has any impact in this area.

Skills a problem across the board

Recruiting the right talent, another crucial factor in a company’s ability to realise digital transformation, remains a challenge across all countries surveyed.

The UK ranked seventh in the human capital category, and shows particularly low scores for quality of math and science education, and enrolment in tertiary education.

Tech City UK, the government agency responsible for processing skilled technology visas, has reported a spike in these applications in the past six months, suggesting that we might see an injection of these skills. However, the importance of nurturing local talent is increasingly important for the UK.

South Korea and Japan lead the Index in the human capital category, but only 16% of all companies said it was ‘very easy’ to find employees with the digital skills they required.

Disrupting the future

Companies that are already leading the way are the ones who are embracing disruption. But rather than trying to compete against disruptors, many of these companies are working in partnership with them – to the benefit of both parties.

>See also: Digital transformation: an analysis of the potential and the challenges

Established companies receive technological know-how from innovative start-ups, while disruptors can tap into existing customer bases and knowledge.

While there’s no denying there are some unknowns ahead for the shape of the UK economy in the near future, the findings of this report show the fundamentals of remaining globally competitive when it comes to digital transformation are through creating an environment that is conducive to continued investment in infrastructure, a focus on attracting a skilled workforce and sharing resources and best practice knowledge across industry.


Sourced by Tom Homer – director global enterprise and services EMEA, Telstra

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Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...