Government can unlock £2 billion progress by championing digital financial system
The new Government’s focus on growth is welcome, but it must begin to look beyond its manifesto pledges for opportunities to enhance productivity across the full breadth of the economy.
The rapid digitisation of businesses is one such source of economic growth, holding the potential to add £2 billion to the UK economy every year, based on our latest research.
The UK is falling behind other OECD countries in terms of digital adoption rates.
This means the UK risks missing out on the wave of AI deployment across the economy, hampering growth, competitiveness and ultimately its ability to become a science and technology superpower.
Boost: Helping smaller businesses to digitise would improve productivity, according to Sage Group’s chief technology officer Aaron Harris
In my conversations with customers across the UK, entrepreneurial small and medium sized businesses, many have told me they have held off important investment decisions amid a protracted period of economic and political uncertainty.
The new Government, with a clear change mandate over the next five years, should give businesses greater confidence to invest in future growth.
Investments, including in future-proofing their businesses through AI adoption will be essential to unlocking greater productivity and growth.
I firmly believe the new Government must take a bolder, proactive approach to champion digitisation and create a robust digital adoption strategy, starting with SMEs who make up the backbone of our economy.
At the moment, business investment incentives are targeted towards capital investment, providing little motivation for businesses to invest in digital technologies.
The new Government must extend the full expensing of capital investment to digital technology, alongside the rollout of a comprehensive Digital Adoption Plan to help businesses across all sectors embrace digital tools and leverage AI.
Future growth is at stake. Our research found that over the next three years the accountancy sector alone could contribute an additional £2.1 billion to GDP and create 19,000 new jobs if they were to adopt AI.
Firms already adopting AI are more confident about revenue growth, expecting it to grow three times faster than their less technologically advanced peers, and they expect to hire ten times more staff.
This is encouraging. Digitalisation of our well-established professional services sector, starting with the accountancy industry which has been an early adopter of AI, could be the growth catalyst this Government is looking for.
As they transition from campaigning to governing, championing the digital economy, and supporting digitalisation will be essential to growing, as well as future proofing our economy.
Aaron Harris is the chief technology officer at Sage Group
