Business matters: The race to embrace technology
Nick Gomer, Managing Partner at EY in the East, explains how mid-market companies are leading the way in embracing new technology and how Cambridge and the East of England are thriving at the forefront of innovation.
The East of England is home to two of the fastest growing areas of the UK – Luton and Cambridge – with both cities outpacing the economic performance of the rest of the UK.
According to EY’s Regional Economic Forecast, Luton and Cambridge are forecast to growth 2.3 per cent and 2 per cent Gross Valued Added (GVA) per year, respectively – ahead of the East of England’s growth forecast of 1.7 per cent and UK average growth of 1.8 per cent until 2020.
Cambridge has also been identified as one of 30 key digital technology clusters in the UK in Tech Nation’s 2018 report and is home to some of the fastest growing tech companies in the UK, such as GeoSpock.
The city has a digital tech turnover of £2.4 billion – more than double the digital tech turnover of the average UK cluster, according to Tech Nation’s 2018 report, sponsored by EY.
When we look at the number of jobs in the city, there are over 15,000 digital tech jobs in Cambridge compared to 4,500 digital tech jobs in other UK cities and towns.
The report also found that the number of new companies starting in the digital tech sector reached 145 in Cambridge last year, demonstrating that it is already attracting high-tech startups who want to be at the cutting-edge of technology.
The university city of Cambridge has a long history as a leading digital tech cluster, with a well-established and burgeoning entrepreneurial mid-market community, focused on driving productivity through technology.
Against this background, the EY Growth Barometer findings reveal strong evidence that mid-market companies are leading the way in adopting new technology, by focusing on the opportunity that digitisation and artificial intelligence (AI) presents.
The UK’s mid-market is fifth globally in the use of AI, above USA, Germany and Russia and was found to be an early adopter of AI with eight per cent of companies already deploying it – above the US (6 per cent), Russia (5 per cent) and Germany (5 per cent).
What’s more, a further 89 per cent of company leaders plan to adopt AI within the next five years. This is an extraordinary turnaround on 2017, when almost two-thirds (64 per cent) said they would never use cognitive technology.
Attitudes toward new technology have evolved rapidly over the past year and this is a strong reflection of the fact that we are now firmly in the midst of the fourth industrial revolution – described as a range of new technologies that are fusing the physical, digital and biological worlds, and impacting all disciplines, economies, and industries.
Our research shows how intelligent automation and machine learning have moved centre stage as vital enablers to ambitious mid-market growth. Almost three in 10 business leaders (29 per cent) see technology as the best means to improve productivity.
This pace of technological change brings with it unparalleled opportunities for Cambridge businesses, and others across the East of England, to disrupt themselves and enter new markets.
Our research reveals that mid-market companies are also optimistic about their future growth, with more than two-thirds expecting to grow by between 6 per cent and 10 per cent this year – far above the International Monetary Fund’s national forecast of 1.6 per cent.
The performance of Luton and Cambridge illustrates the importance of sectors in determining growth prospects and the economic performance of UK cities.
• To read the EY Growth Barometer report or find out more on accelerating growth for your business, visit us at ey.com/growthbarometer