Levelling Up: a Digital perspective

The agenda for levelling up in the context of the digital environment can be viewed in terms of its impact for SMEs, enterprises, and public sector organisations; enabling public and private organisations to drive radical innovation, optimise business operations, enhance productivity, and be a catalyst in transformation for transition towards adaptation, sustainability, and economical growth.

The Government’s recent White Paper (published on 2nd February 2022), highlights six key areas that contribute to the levelling up agenda:

• Physical capital – infrastructure, machines and housing.
• Human capital – the skills, health and experience of the workforce.
• Intangible capital – innovation, ideas and patents.
• Financial capital – resources supporting the financing of companies.
• Social capital – the strength of communities, relationships and trust
• Institutional capital – local leadership, capacity and capability.

In the first instance, it seems from the digital perspective that the levelling up agenda will be addressed as part of Physical Capital (Digital Infrastructure), Human Capital (Digital Skills) and Intangible capital (Digital Innovation), although one could argue that digital in today’s society is the backbone of all activities which empower our economy, services and product development.

Digital Infrastructure (Physical capital)

Digital infrastructure provides a set of physical capabilities required to support innovation, collaboration, generating a superhighway of data, information and connected things. Digital infrastructure has existed since the electronic industrial revolution in various forms of fixed cable lines, modular, networked, mobile and satellite connection. The infrastructure has provided the bases for digital connectivity across all of the devices in our world, creating a network for communication, utilised by all sectors to drive innovation and productivity at regional and national level, enabling delivery of services, solutions and applications for individual, business and societal purposes. The technology that enables our digital infrastructure today are mainly 4G, 5G, mobile networks and super fibre broadbands.

Therefore, the physical infrastructure can be visualised as the connectivity and data vein of our society, providing a nerve system that can enable all sorts of possible communication, services, capabilities, and accessibility to digital data, enhancing productivity and greater integration to farm new solutions, and generating new and innovative service delivery and possibilities in areas such adaptive manufacturing, health care, professional services, using AI, cloud, IoT and XR technologies.

According to statistics provided by Statista, in 2021 the UK had 83% 4G and 8% 5G connectivity. The West Midlands region has the best 5G coverage with Birmingham ranked as the highest for 5G coverage according to the Umlaut Audit Report, with current estimates of 5G benefit to the UK economy being in the region of £2.58 billion. In recent years we have seen an increased investment in 5G technologies and Fibre broadband by telecommunication providers supported by regional and national government. It is estimated that if the 5G coverage increases from 8% to 30% this will deliver £14.8bn economy growth in UK by 2025-2040 (Statista, 2021). So far through local and national investment, the roll out of 5G in the West Midlands is being accelerated by over 6 months, meaning that the West Midlands is amongst the best-connected places for 5G in the UK. Alongside this, WM5G has delivered several firsts including a 5G road sensor network, 5G connected ambulances and capsule endoscopy trials. It is estimated that by 2030, the UK will have nationwide gigabit-capable broadband and 4G coverage, with 5G coverage for most of the population (Analysys Mason, 2021).

However, the biggest challenge and consideration for our regional decision makers, businesses and services providers will be no longer the ability to access data, but to secure the data and build a class of technology that can protect us from future increased cyber attacks of our networks, as well as leveraging the appropriate skill set to understand, analyse and synthesis data towards sustainable innovation and productivity. It is recommended therefore that the government as part of the levelling up agenda increase capabilities such as providing training for businesses, access to best practices and investment to ensure greater resilient, immunity and sustainability of our networks. There are currently number of cyber security initiatives within the region such as the IASME Consortium, Cyber Resilient Network and the Midland Centre for Cyber Security. In our future articles, the Digital Leadership Board of the Centre for the New Midlands will provide further understanding of the region’s existing capabilities and analyse the need to build additional capabilities within the UK and West Midlands to leverage our current digital infrastructure.

Digital Skills (Human capital)

Digital skills are the soft set of capabilities; they provide the behaviour for our systems which is required for the levelling-up agenda to generate new ideas, develop applications and solutions, build capabilities for the needs of individuals, businesses, and our communities, leveraging our growing digital infrastructures and smart city capabilities.

The Levelling Up White Paper states that by 2030, the number of people successfully completing high-quality skills training will have significantly increased in every area of the UK. In England, this will lead to 200,000 more people successfully completing high-quality skills training annually, and £17m investment is planned for an Institute of Technology in Black Country to enhance educational equipment. It is also outlined that as part of broader devolution agenda there will be investment for scaling-up health tech, future mobility and smart energy programmes and deliver digital catch-up programmes so that everyone in the region can gain the skills and confidence to access the opportunities.

However, digital skills that are currently taught in our educational institutes and the talent consumed by our businesses, mainly focuses on the technological aspects of our digital environments, providing skills and expertise in digital infrastructure, business analysis, application development, coding, and systems integration. Although this can provide a good basis for the levelling-up agenda regionally and nationally, it’s not enough to create a significant impact as we live in a complex world where the adaptability of our current and future systems are key to our economic growth. The current digital skills taught are very tool based and application lead focused rather than system driven or the ability to be adaptive, providing inter-changeable, i.e. abstract skills that can be adapted when changes occur.

The view of the Centre for the New Midlands Digital Leadership Board is that, as a country, we are suppressing creativity and critical thinking and substituting it with functional skills which require updating with societal challenges. Although the core subjects of maths, sciences, English literature and communication skills are key part of future skills eco-systems, , they need to be taught and delivered in such ways which can foster creativity through new models of collaboration between industry, existing skills providers and our education systems. In our future articles, we intend to evaluate existing models applied by other countries and suggest new models for addressing current behaviour changes required in our skills and education development.

Digital Innovation (Intangible capital)

Innovation is a key aspect of growth across all sectors to ensure our businesses remain competitive and adaptive. However, we tend to forget or focus predominately either on ideation aspects of innovation through research and development or market opportunities and challenges that can be addressed through innovation. In other words, our innovation supply chain is currently dis-fragmented, siloed, traditional and out of date.

Innovation must be viewed as an iceberg, with the internal part (ie the invisible section) being the organisation’s internal needs and functionalities to generate new ideas, optimise processes and develop human capabilities in alignment with the market requirements (ie the visible section) which is influenced by external factors such as social, economic and political factors, as well as it’s the econ-systems of its supply chain. Therefore, the architecture for the alignment must be seen as a network empowered by the systems of systems which must not only be adaptive, sustainable, and resilient to the changes but trigger changes automatically, initiating new innovative ideas, introducing new behaviours in the form of new products or services, using both the knowledge and power of its network and systems across the supply chain and of its own knowledge and capabilities.

According to current industry and governments reports such as the research brief published by House of Commons library in 2021 (Hatton, 2021), the IoD SME priority report in 2022 (IoD, 2022) and the SAGE report in collaboration with Tech UK (Sage, 2022), has outlined that financial support, human capital development, infrastructure capabilities and market insight are the key capabilities of digital innovation for any start-up and scale-up businesses to grow and achieve sustainability. The levelling up white paper states that its intent is to address the collaboration issues and develop some of the capabilities required through programs such as £100M investment into innovation and R&D, looking at the models been used at MIT and Silicon Valley. Our Digital Leadership Board has established a working group for SMEs and Enterprise with the view to consider new models and approaches for fostering such collaboration and developing a capability model which will be published in our forthcoming articles.

Smart Cities and Digital

Smart city agenda across the world since started in the early 21st century have been driving the agenda to embed digital technologies in various sectors from health to transport and manufacturing, enabling service optimisations for local authorities, citizens, and businesses. The White Paper makes specific reference to this, enforcing the government’s ambition to push forward with its smart city agenda as part of the devolution deal. “The West Midlands Smart City Region Programme to scale up digital opportunities across the region using a special purpose vehicle (SPV) that brings together the public sector, the private sector (including start-ups and leading institutional investors), and the region’s leading research institutions, as well as practical business support for digital start-ups (drawing on learning from 5PRING) and a supply of patient venture capital to attract global innovators.”

In summary, the Levelling Up agenda seeks to provide capabilities that can address the existing challenges of our society by addressing some of the challenges we are currently facing, such as lack of skills, infrastructure upgrades and collaboration between industry, public sector and education and skills providers. The challenge remains that some of the decisions will only cover existing gaps and we need to level up again, hence we will be constantly in catchup mode if we don’t fundamentally change the way we create our future systems and ensure adaptability and optimisation is delivered in sustainable and automated way at the heart of our programs and projects regionally and nationally. As part of this, the Government recently published its digital policy which at the Centre for the New Midlands, we will be looking at this to provide models and solution based on existing UK and international experiences.

Finally, we welcome all organisation’s input into our working groups on SMEs, large enterprises and the public sector with their research and industry expertise to ensure the insight provided can benefit from different industry and academic knowledge base perspectives.

Ardavan is an expert in digital innovation and complex adaptive systems. In May 2020, he launched EsseSystems; a company of implementation specialists offering software solutions, training and consultancy to SMEs throughout the United Kingdom, with specialism in complex adaptive systems.

During his career, Ardavan has led and contributed on various smart cities projects with public and private sector, enabling transformation for transition, the ability to adapt and create cognitive solutions for social-economic challenges of our society including mobility, sustainability and regeneration development.

From 2006-2019, Ardavan worked at Birmingham City University as Professor of Enterprise Systems and from 2010-2018, he advised Birmingham City Council on its approach to Smart Cities. In 2017, he was appointed as honorary Head of Enterprise Engineering Department at Leading Practice working with international standard bodies such as ISO to establish enterprise architecture and business artefacts standards. In May 2012, Ardavan co-founded the West Midlands Data Forum and was the chairman of SAP UK and Ireland S/4 HANA digital technologies from 2011 to 2020.

Ardavan is a great believer in collaboration and has been a driving force behind the establishment of the Centre for the New Midlands Digital Leadership Board, of which he is its inaugural Chair.