Government must tread fine balance in building the information economy

The opportunities are huge, but so are the risks. The most important role Government can play is investing in digital infrastructure and getting businesses on board

Share
Related Topics

Since the emergence of the World Wide Web, politicians have merrily forecast economic transformation and social renovation. Yet behind the hype, the actual impact of the digital revolution has been uneven and change has often defied the bold predictions of ministers, investors and pundits.

For every new product or concept that takes off, many more sink without trace. A major company can emerge in the relative blink of an eye, while established titans can fall from grace almost as fast. This is a complex space, with both unusually low barriers to entry – apps, unlike jet engines, can be conceived and marketed from a teenager’s bedroom – but also strong tendencies towards natural monopoly.

All of this adds up to a sector where government interventions run the risk of being late to the party, heavy-handed or wasteful. An industry that wrong-foots experienced venture capitalists is no place for the Government to be picking favourite companies.

In developing our industrial strategy for the information economy, David Willetts and I have therefore considered the risks and limits of Government intervention as much as the great opportunities.

Of course, there is huge potential for British expertise in algorithms, data management and next-generation mobile technologies such as 5G. There are growing clusters up and down the country. Bristol and Cambridge excel in advanced microprocessors – Silicon Gorge and Silicon Fen respectively. Digital start-ups are coalescing around Media City in Manchester. Sunderland is building a reputation for software development, and Glasgow is working towards becoming one of the UK’s first smart cities. And there is the high-profile Tech City in London.

It's vital to make the most of our capabilities. Government support can make the biggest difference when it is designed in partnership with industry and academia. In this sector, it involves investing in digital infrastructure, such as broadband, and creating the security and privacy frameworks necessary to enable innovation and growth. It requires concerted action to address skills shortages, which are serious in computer engineering for example. Above all, it means helping British businesses of all kinds to embrace digital technologies and accelerate the transformation they can bring to relatively untouched sectors like education and construction.

Both of these sectors feature in the second wave of industrial strategies being published in the coming months. Like the first four, which included life sciences and aerospace, they're the result of industry leaders and government agreeing an approach which favours long-term planning over short-term political timetables.

This is especially true of the information economy, given its potential to underpin other sectors. The goal is to spread technology much wider, including into areas we cannot fully envisage right now. These technologies are highly unpredictable and disruptive. Just as the impact of electricity cannot be adequately expressed in gigawatts, the real measure of the information economy won't be in terabytes but in how far it transforms everything else we do.

Vince Cable is the Secretary of State for Business, Innovation and Skills

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Recruitment Genius: Sales Administrator - Spanish Speaking

£17000 - £21000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - German Speaking

£17000 - £23000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - Japanese Speaking

£17000 - £23000 per annum: Recruitment Genius: If you are fluent in Japanese a...

Recruitment Genius: Graphic Designer - Immediate Start

£16000 - £25000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Read Next
 

Forget charging by the page - with books, heart matters more than heft

Katy Guest
Nai or Oxi: whether Greece says Yes or No today its citizens will continue to struggle  

Greece crisis: Referendum exposes a gaping hole at the heart of the European Union – its lack of genuine legitimacy

Rupert Cornwell
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test