We need to get ready for a digital economy

We are living in the age of the fourth industrial revolution, which means more of us than ever are sharing, learning and transacting online, and technology is changing the way we live, work and interact. Although for many of us, the benefits of digital are clear, people who are lacking the skills or confidence to use digital technology are being left further and further behind. Currently, 12% of all UK adults are internet non-users and a quarter are only able to carry out a small range of activities online¹.

But why, in an age of widespread internet access, is there still such digital inequality between those who have the digital skills and confidence to benefit fully from the internet and those who do not? Digital exclusion and social exclusion are two sides of the same coin. In fact, among working-age adults, those in the lowest socio-economic groups (DE households) are more than three times as likely as those in non-DE households to not use the internet (Ofcom). People with basic digital skills can expect a lifetime increase of their average earnings of 2.8%. There are 5.4 million working age adults who are living in poverty who do not have the five basic digital skills (communicating, handing information & content, transacting, problem solving and being safe & legal online) needed to participate in an increasingly digital workplace².

The rewards are there to be had, if we approach this challenge with vision and optimism. 100% digital inclusion in the UK by 2028 will offer a net present value of £21.9 billion to the UK economy, which is a benefit of £15 for every quid invested. And the gain isn’t just economic, but social too – in a civilised society, we shouldn’t be leaving people behind. Lifting those who have been left behind is an economic and moral imperative.

The benefits that digital inclusion can have are best shown in human stories. Last year, Carolyn from Liverpool was a 47-year-old single parent who had zero digital skills. “I’d see the kids on (the internet) and think I would have a go one day, but I was just too scared.” Then she was made redundant from her job as an office cleaner and struggled to find a new job through the more traditional methods she’d relied on before. The time of looking for jobs in the post office window is gone.

Carolyn needed digital skills, not just to search for a job, but to actually get the job through building a CV and applying for work online. Virtually all vacancies for large organisations are advertised purely online, so without help, Carolyn would have fallen at the first hurdle. But Carolyn went to the Kensington Community Learning Centre, they taught her the digital skills that enabled her to look for jobs, write up a CV, apply for jobs and, ultimately, get a new job. Carolyn is now happier and better off due to improving her digital literacy.

Better digital capabilities are vital not just for people looking for work, but for the entire economy. At the current rate, 6.9 million will remain digitally excluded by 2028. Digital exclusion is already holding back economic growth, with lack of digital skills being cited as the second biggest barrier to UK productivity, after lack of investment finance. A digital skills gap will only cause more harm to the economy as it becomes more digital.

Small businesses who aren’t digitally up-to-date will also face significant risks. Digital is vital for businesses. It is the smallest businesses and sole traders who are furthest behind, in terms of low digital skills and low adoption of digital technology. Despite huge and fast growth in e-commerce, only 8.8% of micro businesses were making website sales compared to 46% of large businesses according to official statistics on e-commerce in the UK.

We can solve the issues of digital exclusion, but it can’t be done without partnership, between government, the private sector, and the charity sector. That’s why today J.P. Morgan and Good Things Foundation – the UK’s leading digital and social inclusion charity – are teaming up to launch Power Up – a pioneering £1.3 million initiative to drive economic inclusion through digital in communities – powering up people, provisions and places.

Power Up will be working with frontline organisations to support them to embed digital within the services they already offer. We know for this kind of support to be effective, it can’t be seen as just a bolt on – digital it already embedded in our lives, so we need to make sure we embed it in the support we can offer to those lacking the skills and confidence they need to qualify for the jobs of the future or expand their small business’ digital capabilities.

The national conversation is moving on to realise the urgency. This week, the front-runner for Number 10, Boris Johnson announced his plans to have high speed broadband in every home and office by 2025 and, last week, during London Tech Week (Europe’s largest technology gathering), the government announced £18.5 million of funding to boost diversity in AI tech roles and innovation in online training. This is significant and welcome – and we’ll be working hard to ensure that Power Up connects with initiatives and funds such as this, as this type of multi-sector collaboration is the only way we can bridge the digital divide.

Digital inequality is already locking people out of good jobs, preventing people from taking charge of their money and stopping people from growing their businesses – and we need to act now to prevent the gap from growing wider. This isn’t an issue that is going to solve itself. If we don’t act now, working in cross-sector collaboration, those at the bottom of the ladder will end up falling off completely – and our economy and society will never realise its full potential.

1. Simeon Yates and Good Things Foundation, The Real Digital Divide, 2017.
2. ONS, Exploring the UK’s Digital Divide 2018