The new report from techUK provides an analysis of the UK technology sector’s current state and future growth prospects, outlining key policy recommendations for the UK government to ensure the sector’s growth. Here, we highlight the key messages for employers.
The report highlights the sector’s rapid growth, its economic importance, and the challenges posed by global uncertainties such as climate change and geopolitical instability. The recommendations in the report focus on building policy coherence, enabling security, accelerating growth through trade and strengthening international cooperation. With a key recommendation of the report being for the UK Government to put advancing the UK’s tech sector at the heart of its growth mission, what are the key takeaways and insights for UK businesses both in and outside of the sector?
Growth and challenges for the technology sector
The sector is a rapidly growing part of the UK economy. Last year, the UK became the first G7 economy to export more services than goods with an estimated 74.9% of UK service exports digitally delivered.
Despite the continued growth of the sector, significant challenges such as climate change, geopolitical tensions, economic instability and shifting government priorities towards sustainability and national security are all factors which contribute to a complex landscape. It is important for businesses to recognise that these global risks are not isolated and require a holistic approach to risk management.
The report emphasises the importance of collaboration and innovation in addressing these challenges. Businesses could seek partnerships with other businesses, government bodies, and non-profit organisations to develop innovative solutions to shared challenges. A collaborative approach can lead to more sustainable and effective outcomes.
It is important that businesses prepare for future risks by adopting a proactive approach to risk management. This could include conducting regular risk assessments, developing contingency plans and staying up to date with emergent trends and threats. By being proactive, businesses can better navigate uncertainties and safeguard their business interests.
Embracing the digital transformation
The report underscores the importance of digital transformation in building resilience.
Digital transformation is the process by which businesses utilise technology to drive change. It refers to the integration of digital technologies into all aspects of a business, fundamentally changing how organisations operate and deliver value to their customers or clients. It encompasses a wide range of initiatives including adopting advanced technologies such as artificial intelligence (AI) and machine learning, to enhancing digital skills and creating a culture of innovation. This may involve investing in technology that enhances operational efficiency and enables remote working.
In the view of techUK, digital transformation is not just a buzzword: it is a strategic necessity for UK businesses.
The report highlights the benefits of embracing digital transformation:
- enhancing efficiency and productivity: digital technologies streamline processes, automate repetitive tasks, and enable data-driven decision-making, leading to increased efficiency and productivity
- improving customer / client experience: by leveraging digital tools, businesses can offer personalised and seamless experiences to their customers / clients, enhancing satisfaction and loyalty
- competitive advantage: businesses that embrace digital transformation are better positioned to adapt to market changes, innovate and stay ahead of competitors
- employee engagement and retention: digital transformation can empower employees by providing them with the tools and skills needed to thrive in a digital workplace, leading to higher engagement and retention rates
The benefits of digital transformation are clear, but the journey can be complex and challenging.
Key considerations for businesses will be:
- assessing digital readiness: before embarking on a digital transformation journey, it is essential to assess digital readiness. This involves evaluating your current technology infrastructure, digital skills and organisational culture
- investing in digital skills: one of the most significant barriers to digital transformation is the digital skills gap. Employers must invest in upskilling and reskilling their workforce to ensure they have the necessary skills to leverage digital technologies effectively
- fostering a culture of innovation: digital transformation requires a shift in mindset and culture. Employers should encourage a culture of innovation, where employees are empowered to experiment and embrace change
- ensuring data privacy and security: with the increased reliance on digital technologies, data privacy and security is paramount. Employers must implement robust data protection measures to safeguard sensitive information and comply with relevant regulations.
Workforce considerations
A key takeaway from the report is the need to ensure that the technology sector is resilient to challenges and to power continued growth. Part of this will be driven by the resilience of the workforce.
How do you foster a resilient workforce? There are no one-size fits all solutions, but this may involve investing in employee well-being, offering flexible working arrangements and providing opportunities for continued learning and development. A resilient workforce will be better equipped to adapt to challenging circumstances and contribute to the organisation’s long-term success.
The report recommends prioritising longevity by investing in tech expertise to understand the rapidly evolving tech sector. Businesses should therefore consider and analyse the skills of their workforce.
A skills-based approach is essential for addressing any gap between existing skills and the evolving demands of the tech sector. Skills training will also allow employees to effectively leverage new technologies and tools and can help with enhancing productivity and supporting innovation.
Examples of skills training might include:
- basic digital skills: e.g. email and internet navigation
- advanced digital skills: more complex topics such as coding and data analysis
- emerging technologies: such as AI
- soft skills: digital communication, collaboration tools and remote working best practices.
Businesses in the sector may also face difficulty in retaining talent in a competitive global market. The report recognises that migration plays a vital role in sustaining ongoing innovation, competitiveness and employment opportunities in the UK.
Conclusion
The report highlights the technology sector’s vital role in the UK economy. While the recommendations made are for the UK government, the report provides valuable insights for businesses who are navigating the complexities of the global challenges facing the sector, as well as employers outside of looking to adopt technology within their own organisations.
Disclaimer
This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2025.