- The U.K. sits on the wrong side of the global digital industrial divide
- The new British government should bring a policy reset, but its first industrial call to action portends continued failure
- It must focus on working with pioneers in industrial digitalization
After 13 years of flagrantly dishonest, massively expensive, high-octane digital incompetence by the previous Conservative government, I had high hopes (okay, I had some hopes) that the new Labour administration might put the U.K. on the path to a brighter digital industrial future. The new government recently published a white paper titled Invest 2035: the UK's Modern Industrial Strategy fanned my optimism.
Then I read it.
Turns out the paper does not, in fact, outline a strategy.
Instead, it sketches out the desire to have a strategy and requests that invitees mail in their suggestions for what that strategy might be. Anyone can play (or could play; the window for replying to the call for responses was only open for a blink-and-you-miss-it six weeks).
This epic 96-page volume — which I read in full, so you don’t have to — avoids matters of substance yet delivers a clear and concerning indication of the direction of U.K. industrial strategy.
The wrong trousers
The clue sits in the title: “Modern Industrial Strategy.”
What the U.K. requires — and what Finland, Singapore, Brazil, South Africa, UAE, Hungary, Sweden, China, South Korea and many other countries have already developed — is a modern digital industrial strategy. (The EU is also pouring money and resources into a continent-wide digital industrial program, from which the U.K. no longer benefits post-Brexit.)
There is a realization amongst all these governments that digital technology is no longer an enhancer of the industrial economy, a valuable upgrade to be bolted on like a new carburetor, but rather that it is legitimately transformative — indivisible from the industrialized applications that it metamorphoses into more efficient, less polluting, and much more profitable economic engines.
But not in the U.K., where rather than proposing a mission to build an equivalent ubiquitous virtual framework over which all vertical industry operations can be supported, the Labour government’s white paper makes the classic digital neophyte error of placing digital in a separate silo — and paying it short shrift at that.
Of the five key tenets of industrial digitalization, buzzy AI receives almost a dozen mentions: automation, three; 5G (the most fundamental component in digital industrialization), one mention; cloud, one mention; and of predictive analytics, not a word is spoken.
This is a case of astonishingly missing the mark. Far from publishing a 21st century industrial strategy, the U.K. government has unveiled a dusty reliquary containing information and ambitions that are not substantively different from those published under the Blair Labour government of the 1990s.
Eton mess
Other than not seeming to understand the fundamental shift in the nature of industry, the danger here, obviously, is that His Majesty's Government (H.M.G.) will persevere with its traditional echo chamber of indolence, deferring to the same organizations and companies that helped stoke the crazy train of deadly digital bungling that has made the U.K. a global laughing stock (click here or here to read about its latest howlers).
Will it once more heed the advice of the mighty Fujitsu, the very company whose software precipitated the worst miscarriage of justice in U.K. history, as well as the death-by-suicide of several post office managers? What about the fifteen-plus companies responsible for the digital incapabilities of the U.K.’s dangerous, now defunct, smart motorways — including Balfour-Beatty and Thales? Or the 200 (!) tech companies involved in the NHS IT disaster, including biggies such as Accenture, BT, Fujitsu (again) and IBM — which collectively trousered £10 billion in fees despite the entire project having to be filed in the round folder in 2011.
There is no reason to suppose they will not, given that all these firms still receive money in government contracts.
Indeed, last year, the U.K. government paid Fujitsu another £180M to continue delivering the Horizon IT software that was at the heart of the Post Office fiasco. This begs the question: How bad would a software product or its supplier have to be for the British government to stop buying it?
Digital delusions
This problem is exacerbated by the fact that neither the U.K. (nor the U.S., for that matter) has an incumbent vendor with all the necessary technologies and knowledge to build 21st-century digital industrial infrastructure. The Chinese (Huawei, ZTE) and the Northern Europeans (Ericsson, Nokia) hold those laurels.
Unless the U.K. government can summon the ghost of the great and wise Guglielmo “googly-woogly” Marconi, it must prioritize conversations with these companies. Better yet, it should just move directly to issuing an RFP to them for building the UK's digital industrial infrastructure – all of it.
This is horses for courses stuff. If I need advice on how to really turbocharge my nationwide opioid epidemic, I retain McKinzie.
If, on the other hand, I wish to understand how to fabricate a digital biome to support an energy grid 30% more efficient than a traditional electrical network, I call Huawei, which has digitalized over 100 of them.
Get Smart
So, how do Ericsson, Nokia, and Huawei do the industry 4.0 voodoo that they do so well? Their approach is summarized in the Smart Cloud digital industrialization model below.
This illustration above should be an essential data point for any government designing an industrial strategy worthy of the name, and uniquely explains the digital construct that governments around the world are using to initiate successful digitalization projects in a variety of industry verticals.
Ignorance is strength
The U.K. government’s not-actually-a-strategy strategy paper is 96 pages long, the same length as George Orwell’s Animal Farm. There’s a nice symmetry to that fact.
It has two bylines: Rachel Reeves, Chancellor of the Exchequer (and C.V. embellisher), and Jonathan Reynolds, Secretary of State for Business and Trade, but its sheer bulk and paradoxical lack of substance reek of a McKinsey, Deloitte, or one of the other army of bullshitters/consultants that H.M.G. last year paid £3.4 billions of taxpayers’ money with to help it make spectacularly wrong-headed strategic decisions.
Rather than set out its stall with an acknowledgement that the U.K. now sits on the wrong side of the global digital industrial divide, and needs to bloody well do something about it, the paper adopts a relaxed glass-half-full-of-rather-delightful-claret tone and focuses on the “U.K.’s strengths, which creates huge opportunities for stronger and better growth.”
It’s quite an unconvincing and wanky list, honestly. Apparently, one of the U.K.’s fortes is providing a “strong pro-entrepreneurial environment.” Speaking as an actual digital entrepreneur, I call bollocks on this.
Where is the self-awareness in this paper? Where is the honest acceptance that the U.K. is Europe’s great digital-industrial dunce? Without this clear-sightedness, the U.K. is guaranteed to fall into the same industrial rabbit holes that have plagued it since it abdicated leadership in digital technologies to the U.S. during the International Computers Limited era of the 1980s.
Ghost writers
The copy editor in me senses that much of Labor’s industry paper was written using artificial intelligence. Ironically, while AI is one of the five digital technologies on which a 21st century industrial strategy should be based, writing government white papers is not the application of AI we are looking for; it is another application.
FYI, I did not use AI to write this op-ed or need it when writing to my colleagues at Ericsson, Huawei and Nokia, encouraging them to contact H.M.G. to aid the U.K. in its hour (century?) of digital stupidity.
To put this in digital terms that even the government can understand, the next decade will conclude with a binary result.
Nations that grasp the opportunity of Industry 4.0 and digitalization will emerge as winners, with vibrant economies. Those that don’t — and, right now, this includes both the U.S. and the U.K. — will form a second tier of industrial and economic underachievement.
Op-eds from industry experts, analysts or our editorial staff are opinion pieces that do not represent the opinions of Fierce Network.