Today’s figures are starting to show the very real cost of the pandemic on UK households, with companies being forced to cut jobs, reduce hours, pause bonuses or ask staff to take pay cuts. Falling wages and rising unemployment represent a big loss of potential spending power, and cast doubt on how quickly the economy can continue to recover.

In response to these figures Stephen Kelly, Chair of Tech Nation, has stated: “The decrease in employment and the looming recession show that the old economy is no longer sustainable, so, to find a route to recovery, Government and business leaders must look towards the digitally-enabled new economy.

“Pre-COVID-19, the tech sector was growing six times faster than the rest of the economy and it already employs almost three million people, representing an engine room of high-value, highly-skilled and well-paid jobs, with salaries that are, on average, £10k higher than other sectors. Clearly, it is time to think about tech as core to UK employment, prosperity and productivity.

Kelly believes there are five major steps that can be taken to support the tech sector in leading an economic recovery: 

1. Supporting the essential digital upskilling of the nation to deliver high-value job creation not just in London, but in every region of the UK. It’s encouraging to see Government funding go towards sector-based academies, but we need to see this channelled into digital academies where employment prospects for the future are strong to support a tech-led recovery out of the recession.
2. There must be continued access to capital for scaling tech businesses. HMT funding has been crucial and should continue, and measures such as the Future Fund, intended as an emergency shoring up, could actually be a longer term masterstroke as long as the Government commits to the business for the long-term. In addition, business needs to step up and fund public services like never before. Boards should be compelled to contribute through the tax system and overseas companies should pay fairly.
3. Increasing access to customers, investors and new markets will be key to boosting the recovery. Three quarters (80%) of Tech Nation’s latest Upscale 4.0 cohort identified international expansion as their priority. New market support, delivered by peers, will help support newer players.
4. Innovation and R&D support has been welcomed by the Tech sector, so the Government should double-down on this to support innovation across the UK. In line with the CBI’s recommendation, we would suggest increasing the level of R&D funding to 2.4% of GDP, with additional resources available in certain geographic areas.
5. Supporting greater access to international talent so the UK can continue to be a magnet for talented people. Attracting international talent via a seamless immigration system continues to be key, not only for employees but for people who want to build business. This requires low administrative burdens, support structures for soft landing, favourable business environment and support networks.