2020 has seen a monumental shift in the way we live our lives, and the power of technology has enabled this to happen. Since their victory last year, the UK government has committed to levelling-up the economy. But if this is to be achieved the Local Digital Capital gap must be closed, argues Julian David.

If 2020 has taught us anything, it is the power of technology. The various ways that businesses and organisations have been able to pivot to succeed in the face of the pandemic clearly demonstrates this – from communication tools such as Zoom to the boom in e-commerce. We only have to think about what we would have been capable of while working remotely a mere 10 or 20 years ago to see how much technology has become a core part of our lives – both as individuals and as businesses.

And as it becomes clearer than ever that we are entering a digital future, it's more important that businesses across the entire UK – and not only those based in London and the South East – are equipped with the digital capabilities to succeed. If we really want to create a levelled-up economy and help businesses nationwide to thrive in spite of challenges such as Covid-19 and Brexit, we must close the Local Digital Capital gap.

Local Digital Capital, much like human capital, encompasses the infrastructure, equipment and skills required to enable individuals, companies and the public sector to interact and work more effectively. According to our research, Local Digital Capital is comprised of components from digital skills for all to digital adoption, and from sustained access to finance and investment to support for research and innovation.

Closing this gap could boost the UK's economic output by as much as £145 billion, create 2.7 million new jobs and see combined revenues among SMEs increase by as much as £325 billion, according to research from Sage.

Not only does closing the gap have tangible economic impacts for the UK as a whole, but it also boosts productivity and enables regional businesses to have a positive impact on their local economy.

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Addressing the Local Digital Capital gap requires local collaboration and solutions. TechUK, for example, has been working closely with regional and national leaders across the country to design a series of policy recommendations for closing this gap, published in a series of eight reports across the UK.

Although the specific recommendations for closing each area's Local Digital Capital gap are unique to them, there are three major areas for addressing the issue: local collaboration, accelerating local growth opportunities, and launching local innovation challenges.

First is local collaboration – working together to strengthen Local Digital Capital. We believe local stakeholders from across the public and private sectors have the expertise and local knowledge to develop integrated regional plans to strengthen the eight component parts of Local Digital Capital. Leaders can also build on existing programmes and initiatives, such as the North of Tyne Combined Authority's programme of action in the North East, strengthening local plans and ensuring successful strategies are replicated elsewhere in the region.

The second recommendation is using digital to accelerate local growth opportunities. Where regions or nations are pioneers in certain sectors, focusing on closing the Local Digital Capital gap can help to boost the local economy and create jobs more quickly, in addition to cementing the region's position as a leader in the sector.

Exciting developments in digital industry, eCommerce and banking in the North West, carbon zero smart housing in Wales and healthtech and advanced manufacturing in Yorkshire and Humberside, to name a few, should be at the front of digital adoption in these areas, and we must take concerted action to ensure their growth is being supported and accelerated through closing the gap.

The third recommendation is to launch local innovation challenges to tackle urgent problems. To tackle the challenges that Covid-19 and Brexit bring to the fore, local leaders should challenge innovators from across the public and private sectors to come forward with new ideas and innovative solutions to some of their most urgent local problems – from housing to healthcare, and from supporting high streets to the creative economy.

Covid-19 has presented a huge challenge to us all, wherever we live and in whatever sector we work. But if we are truly serious about the levelling up agenda, we must use this as an opportunity to build a recovery that incorporates the potential of the entire country. As we face a future increasingly reliant on digital technology, it will only be through closing the Local Digital Capital gap that we will truly deliver on equipping each region and nation with the tools to level up and succeed in a post-Covid world.

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