Local Digital Index 2023

The East of England occupies third place overall and has some significant areas of strength particularly research and innovation, as well as digital adoption because of the significant digital employment share and high level of R&D spending. 

East Anglia has high research and development spending (securing 2nd spot in that component) but its digital infrastructure remains low (36th in that component) and ensuring progress in this would help raise the area and regions Index score. The digital skills score for Essex outperforms East Anglia, Bedfordshire and Hertfordshire, making this another area for attention especially a strong tech sector score and proximity to other high performing areas. 

London, and the areas within London, continue to feature highly in the Index. However, that isn’t to say there isn’t a need, as in all areas of the UK, to improve digital inclusion and opportunities for all to engage with digital technology. There’s still work to be done on updating digital infrastructure, ensuring high growth companies remain in the UK and key to that is increasing the digital firms based in the capital as well as improving the digital skills of both the general public and the tech workforce.  

While the North East lags behind its fellow Northern regions, much of this stems from low scores in digital skills. We see lower levels of internet usage, lower numbers of HE students and that is despite the number of HE students in the region studying computing and engineering + technology per 1K population being closely comparable to London. Additionally, those downloading information is the second lowest in the UK (less than 50% and 10p.p. behind the next region). In the Tees Valley, inward investment in ICT is some of the lowest in the UK making it difficult to compete with city region peers. Credit must go to Northumberland, Tyne & Wear on digital infrastructure which, despite some large rural areas which can be more difficult to connect, still scores well to compete with its city region peers on this measure. 

Greater Manchester’s Index scores show they’re the regional centre for digital and tech but that shouldn’t hide the good scores for Merseyside on inward investment in ICT, and in Cheshire on R&D spending. Greater Manchester produces the vast majority of students from the region. 

Perhaps as expected, and as seen in last year’s Index, Cumbria is the lowest performing area. Will a new elected Mayor for the area help drive improvements in the same way Andy Burnham in Greater Manchester has targeted tech, innovation and digital inclusion? Time will tell. 

Improving the region will mean upskilling the population and tech workforce in Merseyside and ensuring Greater Manchester can draw in and build on R&D spend to champion innovation in the region. Cheshire’s scores are good, perhaps due to proximity to both Greater Manchester and Merseyside, but do come from a small base with a significant digital employment share. 

On the face of the data, Northern Ireland’s scores may look bad but this fails to acknowledge that data is often inconsistent in Northern Ireland e.g. delays on inward investment in ICT data, or acknowledge the positives in the data such as the excellent gigabit broadband score (85.5% coverage). techUK’s own search using datexplorer from The Data City suggests the tech turnover in Northern Ireland could be as high as £37.6 billion, 118k digital employees and nearly 300 fast growing companies (over 20% annual growth).  

Scotland remains a mixed picture. Eastern Scotland scores in the top third in every component with West Central Scotland just behind. Digital infrastructure scores are good, the number of HE students remains high (and more broadly in Scotland the number studying computing, tech and engineering is the highest per 1k of students in the UK and over 264k digital occupations in Scotland). 

Rural areas such as the Highlands and Islands remain substantially behind in terms of digital infrastructure however the progress made is noted in the report. 

techUK again examined the data explorer platform and saw significant turnover linked to ‘net zero’ businesses, and much company data linked to turnover driven BP or ExxonMobil. This also showed significant employment and business counts being driven by Edinburgh, Glasgow and Aberdeen, and the cumulative growth in tech companies in Scotland had increased by 82% in 10 years.  

Scotland needs to continue rolling out improved digital infrastructure especially in not spots, targeting and supporting further FDI into the tech sector in Scotland, increasing the number of digital occupations to retain more homegrown talent in Scotland and harnessing the R&D spend to raise the profile of innovation in Scotland. 

The region scores well and sits in the halo of London while also being strong in its own right. Berkshire, Buckinghamshire and Oxfordshire scores 2nd in the ITL2 areas, with Kent the lowest in the South East in 29th. Improving digital infrastructure across all areas seems an obvious area for future investment and to improve the regions Index results, particularly in gigabit broadband and 5G. 

The number of students studying computing or engineering could be raised in the region to cater for the large volume of high growth companies (the proportion of HE students studying these subjects is the lowest in the UK). This is particularly pertinent when the finance and investment scores are so positive and these should be take advantage of with a talent pool ready to take up new roles or develop their own companies and ideas.

Improving digital infrastructure again remains the overwhelming priority from the Index results. While Gloucestershire, Wiltshire, Bath and Bristol (GWBB) remain significantly ahead of their neighbours, digital infrastructure scores across the South West need improving. Less than 70% gigabit and 5G coverage in GWBB is far behind rivals such as Greater Manchester, West Midlands and West Yorkshire, particularly when considering that inward investment in ICT and investment in the ICT sector is far ahead of those comparison regions. In fact, for finance and investment the GWBB area is 6th in the UK and 5th for R&D. 

The other component to focus further attention on from our Index scoring in digital adoption, with the South West’s digital employment share and occupations comparable with Scotland, and UK business count in digital comparable with the North West. The region should seek to take advantage of this and take all businesses on the digital adoption journey.  

Wales is split into two ITL areas and it’s West Wales and the Valleys that prove to score lower than East Wales (the area that includes Cardiff). There aren’t huge differences in the investment in ICT or UK business counts but digital occupations favour East Wales as does digital infrastructure (related to the topography and connection challenges in rural Wales). R&D scoring also shows a divide with East Wales scoring higher in the Index that West Wales. Using dataexplorer from Data City, techUK noted that Wales recorded £2.6 billion in the tech sector and with the estimated company turnover attributed to Wales being £48.9 billion. 

The region scores well overall, featuring 4th in the Index. Each area within the region has its own strength and drawback. The West Midlands CA area has strong digital infrastructure scores with gigabit broadband at over 88% coverage and 5G coverage over 95%. Both are well above the other regional partners scores in the West Midlands. But the West Midlands CA area should look to improve finance and investment coming into the region, especially VC funding and harnessing digital skills in the area to take on the roles of the future. 

Shropshire and Staffordshire present digital skills challenges in terms of volumes of HE level trained students, featuring in the bottom five nationally for this metric.  

Herefordshire, Worcestershire and Warwickshire’s R&D score is particularly strong (3rd nationally) driven by spending. The regions digital infrastructure is lower than it should be given the strong scores on other components and finance availability remains an anchor on future growth. 

Using the data explorer platform from The Data City to aid the Index we see that it suggests the West Midlands has secured £9.35 billion investment funding, compared to £20 billion in Yorkshire and the Humber and £41 billion in the North West, holding back future growth. 

Yorkshire and The Humber’s data offers some interesting results for the region. Improving digital infrastructure in North Yorkshire stands out as an area for improvement, with gigabit broadband and 5G coverage remaining below national averages.  

In South Yorkshire, gigabit broadband tracks below neighbours like West Yorkshire, however of more concern is the lower levels of investment in the ICT sector to help drive future regional growth. East Yorkshire and North Lincolnshire also struggles East Yorkshire and North Lincolnshire also struggles with finance and investment but the low skills score (low HE students and low internet usage) is more of a priority to drive digital tech improvements, particularly as the digital occupations rank is much lower than its neighbours. 

Finally West Yorkshire has moved up the Index scoring in each of the components but remains in the same place overall due to other regions improving more quickly. West Yorkshire should continue to prioritise skills and drives to increase digital adoption in the region.  

Using the dataexplorer tool from Data City, techUK found that West Yorkshire received £3.9billion investment funding and had a estimated turnover of £45.5 billion with Leeds being the base for many of the companies and in turn employees with cyber and life sciences being particularly significant.