Our digital strategy could be ‘Made Smarter’ if government and managers talk to working people

Published date
15 Nov 2017
Ambitions to develop a comprehensive digital strategy for the UK took a step closer late last month with the publication of Made Smarter, a government review led by Juergen Maier, the chief executive of Siemens UK.

This report sets out the blueprint for a digital sector deal as part of the government’s forthcoming industrial strategy.

The TUC, the Confederation of British Industry and many others have published policy papers on digital technology in recent weeks and it is heartening to see a real coalition developing between industry and unions on this issue. Exploiting the possibilities – and avoiding the pitfalls – of digitalisation is crucial if the UK is not only to survive, but also to thrive, during the next great industrial ‘disruption’.

The most important pitfalls to avoid, of course, are for today’s high skill, high value jobs to be replaced either by low skill, low value jobs, or for the good new jobs created by digital technology to require skills that today’s workers cannot hope to attain. Academic studies vary when trying to assess the scale of the disruption, but the Bank of England estimates a possible 15 million UK jobs could be lost to automation in the coming years. The dangers, therefore, are real.

But before we fall into despair, Made Smarter tells a much, much more upbeat story:

  • The positive impact of faster innovation and adoption of Industrial Digital Technologies (IDTs) could amount to as much as £455bn for UK manufacturing over the next decade;
  • This would increase manufacturing sector growth by between 1.5 and 3 per cent per annum;
  • That, in turn, would create a conservative estimated net gain of 175,000 jobs throughout the economy;
  • Our CO2 emissions would fall by 4.5 per cent;
  • And industrial productivity can be improved by more than 25 per cent by 2025.

Two caveats are necessary here. First, Made Smarter focuses on manufacturing. That’s no bad thing, but digitalisation will affect the economy much more broadly, so we need to bear in mind that the effects may not be so positive elsewhere. Second, this positive outcome will only come about if government acts now to secure our digital future.

So what needs to happen? According to Made Smarter, the UK needs to overcome the following hurdles:

  • A lack of effective leadership means there is no clear narrative about what we do well and where we need to improve. This lack of a clear vision is not inspiring current and future workers that there will be good jobs for them in the new economy (a point I will return to below). And while the UK has centres of technical expertise, these are fragmented and un-coordinated;
  • Poor levels of adoption, especially among small and medium-sized enterprises (SMEs), suggest that we currently experience a confused landscape of business support. SMEs are put off by risks around cyber-security, a tax system that does not incentivise take-up, and skill shortages, particularly in digital engineering capabilities;
  • We also need to widen our leadership in research and innovation, to give greater support to IDT start-ups, so as to create more new innovative companies and industries.

To overcome these hurdles, Made Smarter calls for “a clear vision, strategy, marketing and messaging of the UK’s ambition” to be a leader in the creation and adoption of IDTs. A more visible and effective ecosystem is necessary to accelerate the innovation and diffusion of these technologies. Our industrial workers must be upskilled in the use of IDTs by standardising and simplifying the way in which quality training and education can be accessed. Targeted fiscal incentives are needed to incentivise the adoption of these technologies.

Made Smarter is comprehensive, focused and ambitious, as we might expect from one of the UK’s most successful business leaders. It is now up to the government, in its forthcoming industrial strategy, to show similar levels of ambition.

There is one thing missing from Made Smarter, however, and that is its lack of employee engagement. It is, therefore, crucial that unions are at the table as the government’s digital strategy is rolled out in the months and years to come.

It is true, as the report says, that current and future workers fear that the new world of work will have no place for them. That’s no surprise if digitalisation comes across as something that will be ‘done’ to workers, by benign (or not so benign) managers. In Germany, digitalisation is being introduced in partnership with workers and their unions, giving them a real say in how these technologies are introduced, so that machines work for people, not the other way around.

Germany’s White Paper, Re-Imagining Work, gave unions, alongside businesses, churches and other interested organisations , a voice in how the future world of work is to be shaped. Works councils in companies like Airbus are negotiating challenging agreements with management, so the default solution to new technology, the laying off of workers whose jobs might now be undertaken by robots, is not available. Managers and worker representatives are required to do better than that.

No wonder German workers recognise, as the metalworkers union IG Metall told the TUC, that “something big is coming” with digital technology, but they do not have the same level of fear as exists here.

Furthermore, Made Smarter is spot-on about the need for easier access for quality training and education, but who decides the quality? As we also know from Germany, when unions have a role in defining that quality, the outcomes for both company and workforce are very positive.

So the TUC looks forward to the next stage of the government’s digital strategy, hopefully outlined in the forthcoming White Paper, but we look for a workers voice embedded in the process. Only by including such a voice will working people have trust and confidence in their digital future.