We live in a world where the skills needed to thrive are changing fast. A combination of the rise of digital, artificial intelligence and the move to a global economy means that many previously ‘safe’ middle-income administrative jobs have either been offshored or computerised. Consequently commentators predict a hollowing out of the economy, with a greater number of low wage, low skill roles at the bottom and a smaller number of highly paid jobs at the top of the pyramid. This growing imbalance – and the potential social issues it brings – has been analysed and written about by a number of leading economists, such as Thomas Piketty, in his surprise bestseller, Capital in the Twenty-First Century.
Despite what the nostalgic might think, this process is irreversible. Globalisation is accelerating and we can’t put the genie of artificial intelligence back into the box. So, how do we ensure that the UK workforce, and UK companies, are able to cope?
Go.On and On?
The key start point is to understand that the traditional model of learning a particular trade or profession and then spending your entire life working at it is no longer valid. Kids at school today will have multiple jobs during their careers, many of which may not even have been invented yet. Given that you can’t teach someone about a profession that doesn’t exist, the best approach is to provide the skills for lifelong, independent learning, such as self-reliance, adaptability, collaboration and other thinking skills.
The other vital element is to have an understanding, and mastery of, technology. To be fair, most children are miles ahead of their parents in this regard, and initiatives such as re-introducing programming to the school curriculum and low cost machines such as the Raspberry Pi are helping to drive these digital skills.
But the risk is that the current adult generation is falling behind. Research by charity Go.On UK has found that 12 million people (roughly a quarter of the adult population), lack the basic digital skills required today. 23% of small businesses also don’t have these skills. Go.On defines these skills in 5 areas:
- Managing information (finding, storing and managing online information)
- Communicating (communicating digitally, interacting online)
- Transacting (shopping/selling online, managing finances digitally, registering for government services)
- Problem-solving (using online resources to learn and solve problems)
- Creating (basic content creation, such as writing a social media post)
For many of us, these are not particularly complex or challenging, but failure to learn them not only hurts the chance of a good job, but also financially impoverishes people. If they aren’t able to buy goods online, they may well end up paying more, while they will be increasingly cut off from family and friends. At the same time a significant number of people are being held back, such as by slow internet access speeds, poverty and a lack of technology.
To show the scale of the problem Go.On has created a digital heatmap of the country, which combines local factors (infrastructure, education, demographics), with the percentage of those with digital skills. This shows the areas that are at risk of being left behind – “digitally excluded” – in the future. What is stark when looking at the map is how few regions and local authorities are safe – the vast majority have a medium to high likelihood of exclusion.
The Go.On findings must act as a wake-up call and a way of focusing efforts on increasing digital skills. My concern is that there doesn’t seem to be one body responsible for this – it is left to a combination of local authorities, central/regional government, schools, colleges, charities and even the BBC. While everyone should be responsible for learning basic digital skills, it needs a co-ordinated effort to level the playing field. Otherwise the imbalance shown in the Go.On map will actually widen, rather than shrink, hurting both individual prospects and the overall economy. It is time for rapid government-led action, and it needs to happen quickly.
I don’t think there’s ever been a better time to launch a startup in the UK. The public profile of the tech industry is incredibly high, and those that create businesses are more likely to be seen as visionary entrepreneurs than cranks who couldn’t get a job in a proper company. Indeed, for those leaving university, setting up your own startup is a valid (if not as initially lucrative) alternative to becoming an accountant, banker or lawyer. I’m sure startups would complain that it is still difficult to raise money, or scale up their businesses, but it feels that there is now wide public and political acceptance of the importance of creating a culture that encourages startups.
Read the press and politicians’ speeches and there seems to be a relentless search to find the ‘European Google’ or ‘British Facebook’, multibillion dollar global companies that can become standard bearers for the industry. Alternatively, other European companies essentially mimic what is being done in the US, taking their business models, localising them and then hoping that first mover advantage will let them create viable businesses before the original enters the market.
The people that run startups are smart, as are the venture capital funds that back them. But are they looking in the right areas when it comes to creating new businesses – as an article by Liam Boogar in Rude Baguette recently asked “Where are the European startups to solve Europe’s biggest problems?” Leaving aside the question of whether Europe is cohesive enough that the same problems apply to life in Edinburgh, Athens and Bucharest, it is a valid point. What issues can be solved, first in Europe, and then expanded globally, to create thriving companies that benefit us all?
The article focuses on the need to shake-up the savings market, and with interest rates in many countries close to (or even below) 0% I can see the opportunity to transform the sector, such as through peer-to-peer lending.
However, what other areas would enable European startups to build global businesses? Thinking about the particular problems Europe faces, here are four that come to mind:
Across Europe, people are living longer and birth rates are falling. Longer lifespans increase pressure on health and social care services, as the elderly battle chronic diseases and poor health. While this isn’t just a European problem, it is one that startups can focus on, particularly given the public money currently being spent on healthcare research. Areas such as wearable monitors and the Internet of Things can potentially help improve the quality of care, even allowing people to remain in their own homes, rather than be treated in hospital.
From driverless cars to drones, technology is revolutionising transport. With its combination of major car and aeroplane makers, Europe is well-positioned to lead the way, but it needs an injection of startup energy and fresh thinking to succeed. Whether it is new ways of charging electric vehicles as they wait at traffic lights or smarter cities where you are automatically guided to the nearest parking space, there is plenty of scope for innovation, along with the chance to scale up to export the technology across the globe.
More than 6 million jobs were lost in the recession between 2008-13, and youth unemployment in many countries remains high. Many of the roles that were made redundant are simply not coming back as they have either been offshored to lower wage economies or replaced by technology. What are needed are ways to reskill European jobseekers so that they can compete in the global market. Much of this should be the responsibility of governments, but technology can help with new ways of training, new opportunities for collaboration and the encouragement of remote working to combat rural depopulation.
4. Cutting bureaucracy
All governments, of whatever political persuasion, seem to delight in creating red tape that tangles up citizens and businesses alike. And, despite the European Union, there is still a range of different measures that need to be met. Many countries have begun to put their services online, but more can be done, and in many cases nimble startups can get things done quicker than lumbering government departments.
I’m sure there are plenty more European problems that need solving, from the environment to education. These don’t just benefit society, but are potentially extremely lucrative as well. So the challenge for startups and entrepreneurs is to try and solve them – and at the same time we might create the European Googles that politicians are so keen on.