How can government achieve its new year resolution to deliver economic growth in 2025 and beyond?

For me, it starts with intelligent and ambitious investment in infrastructure, and exploiting the opportunities presented by digital transformation in the public sector.

Digitalisation of UK infrastructure could be a major driver of innovation and economic expansion and a 2022 report by consultancy PublicFirst estimated that digitalisation could grow the UK economy by ￡413 billion by 2030; as we rapidly approach 2025, the government needs to quickly understand where its stands on progress towards this critical opportunity.

That said, the journey towards a digitally transformed public sector is not without its (significant) challenges; interoperability between legacy systems and new digital platforms remains a significant technical obstacle, hindering seamless service delivery. Additionally, ensuring equitable access to digital services for all people, irrespective of their socioeconomic status or geographical location, demands innovative solutions.

The accelerated adoption of digital technologies, such as cloud computing, artificial intelligence, and the Internet of Things, can play a vital role in government’s plans to drive economic growth.

However, to fully harness the potential of digital transformation in the public sector, addressing existing systemic and systematic challenges is imperative: fragmented and disconnected systems are among the biggest barriers to progress and overcoming these obstacles will require concerted, cross-department effort, strategic investment, and a long-term commitment to innovation.

Keir Starmer 's recent instruction to key regulators - including the Financial Conduct Authority , Competition and Markets Authority , Ofgem , Ofwat , and the Environment Agency (amongst others) - to develop innovative approaches to stimulate economic growth by mid-January does reflect a focused strategy to address the UK’s economic challenges - and hopefully some joined up thinking.

The directive issued on Christmas Eve by the The PM, Chancellor Rt Hon Rachel Reeves and Business Secretary Jonathan Reynolds MP underscores the urgency of leveraging regulatory frameworks to create a more dynamic and competitive economy - and I sincerely hope that emerging technology is front and centre of the suggestions that are provided to 10 Downing Street on 16 Jan!

The starting point for regulators should be to reassess policies that inadvertently hinder investment or innovation. By fostering a regulatory environment that is conducive to growth and which reduces unnecessary barriers, regulators can facilitate innovation, investment, and competition - all of which are central pillars of a free market economy!

There are numerous sector specific examples of the opportunities presented by embracing emerging technologies:

• Energy (Ofgem): A push for innovative solutions may accelerate investments in renewable energy, smart grid technologies (adoption of IoT and AI to optimise energy distribution and manage grid reliability), and efficiency programmes designed to meet sustainability goals while driving economic activity. Take Sizewell C for example: the government and the French state-owned company EDF (UK) will fund about 40% of the project, with ministers currently sizing up private investors to meet the rest of the costs - but if government are to succeed in securing investment in these (and other) key capital infrastructure projects, the numbers have to stack up - which means the investment opportunity has to be attractive and viable!
• Finance (FCA): The FCA should explore initiatives to simplify financial regulations, enabling fintech and small businesses to grow and thrive, while safeguarding consumer interests: blockchain technology could improve transparency and efficiency in financial transactions and compliance, and AI could be deployed for fraud detection and risk assessment.
• Competition (CMA): The CMA could focus on policies to enhance competition, prevent monopolies, and ensure fair pricing, directly benefiting consumers and businesses: big data analytics could be leveraged to monitor anti-competitive behaviours, with AI used to analyse market trends and predict and model the economic impact of updated regulations.
• Ofwat (Water): ?IoT technology could be deployed to monitor water usage, water quality, and waste management, whilst AI could be deployed to manage infrastructure via predictive analytics to anticipate infrastructure failures and improve service delivery for millions of customers.

Notwithstanding these opportunities (and I am no expert), regulators must navigate the delicate balance between promoting growth and maintaining their primary mandates, such as consumer protection and market stability. Further, effective implementation will require seamless collaboration between diverse regulatory bodies to ensure cohesive and impactful outcomes for the wider system of government.

If they can work collaboratively to identify innovative solutions across sectors, regulators can help stimulate investment, improve service quality, modernise critical industries, and enhance competitiveness in key industries via:

Pro-Growth Policies: simplified regulations to reduce barriers to market entry; incentivise investment via policies that encourage private sector investments, particularly in industries with high growth potential, like green energy, fintech, and AI-driven healthcare; promote competition to ensure fair pricing, consumer choice, and innovation.

Collaborating with Innovators: regulators can foster partnerships with tech firms, academic institutions, and start-ups to test and implement emerging technologies; establish regulatory sandboxes to trial innovations in a controlled environment, reducing risks while encouraging new solutions; host public-private innovation challenges to crowdsource solutions to sector-specific issues.

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Building Tech-Forward Frameworks: standardisation of standards and regulations for emerging technologies like AI and IoT to ensure safety, interoperability, and scalability; secure data sharing across ecosystems to enable cross-sector collaboration and improve decision-making; ethical development of AI and emerging technologies to balance innovation with public trust.

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However, emerging technologies should be framed not just as tools for immediate economic recovery but as enablers of long-term competitiveness and growth. ?A great example of where this has already been done is Denmark, which has engaged effectively with the private sector to develop platform-based cloud solutions that can revolutionise public sector administration by enabling efficiency, transparency, and innovation across various government services - demonstrating how digital solutions can modernise public sector operations and improve service delivery on a national scale:

1. Centralised and Integrated Digital Infrastructure

• Deploying a centralised digital infrastructure, integrating disparate public sector systems into a cohesive platform to streamlines communication and data sharing between government agencies
• Interoperability: enabling seamless interaction between different government databases and platforms to reduce duplication of effort, reduce huma error and improve service delivery efficiency

2.?User-centred service delivery

• Self-service portals to enable online access to various public services, such as health records, tax, and welfare benefits, through intuitive and user-friendly interface
• Personalisation: using data-driven insights to offer personalised services, ensuring that users receive relevant information and support based on their circumstances

?3. Process Automation

• Efficiencies via automation of repetitive administrative tasks such as application processing, approvals, and notifications, reducing delays and minimising human error
• Cost reduction via automation significantly reduces operational costs and frees up resources for other critical public sector initiatives

4.?Data-Driven Decision-Making

• Real-time analytics to provide government agencies with access to real-time data and intelligence, enabling better decision-making and policy formulation
• Predictive capabilities and advanced analytics tools to predict trends and potential issues, such as healthcare needs or economic challenges, allowing proactive intervention and investment

5.?Transparency and Accountability

• Open data policies: making government data accessible to the public fosters trust and accountability
• Audits: cloud based, and platform-based solutions ensure all actions and decisions are recorded, making it easier to trace and resolve disputes or inefficiencies

?6. Resilience and Scalability

• Cloud-based infrastructure platforms operate on a scalable and resilient digital infrastructure, ensuring uninterrupted service delivery even during peak demand
• Adaptability: cloud solutions and platform-based architecture can be more easily adapted to new technological advancements or legislative changes, ensuring they remain relevant and effective.

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Digital Transformation in Key Sectors (Denmark)

• Healthcare: Patients can schedule appointments, access medical records, and communicate directly with healthcare providers online; predictive analytics helps to more effectively anticipate patient needs and manage resources (such as staffing and hospital beds) at regional and national level.
• Tax & Finance: Automation and integration with other systems have made tax filings and financial management simpler and more efficient for individuals and businesses, as well as improving fraud detection using advanced algorithms.
• Social Services & Welfare: Automated online applications for benefits, pensions, and child support, with faster processing times; secure integrated data sharing between different agencies; & predictive analytics to plan appropriate interventions to address social issues.
• Transport & Urban Planning: Smart public transport to enable integrated digital journey planning & real-time updates; IoT sensors and analytics to support traffic management and optimise infrastructure usage; & data driven insights to support infrastructure investment & development.
• Judicial & Public Safety: Digital case-management to reduce paperwork (& associated human error) and accelerate processes; predictive analytics and AI to identify high-risk locations or high-risk events in order to allocate resources more effectively; online platforms to enable people to report crimes quickly and conveniently, and access to key information regarding their complaint, or public safety information.

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Fully harnessing the potential of digital transformation in a fragmented and disconnected public sector, and addressing existing challenges, is imperative. Adopting emerging technologies, and effectively aligning them with national strategic priorities and policy objectives, has reshaped critical sectors in Denmark and illustrates the transformative potential of digital platforms in public sector administration.

By integrating technologies across these domains, Denmark has set a global standard for how governments can modernise their public sectors, and regulatory frameworks, to enhance efficiency, accessibility, inclusivity, transparency, and sustainability, to better serve their people.

Denmark also offers a clear and comprehensive roadmap for delivering value and driving results, alongside a number of lessons that other states can learn; by doing so, the UK can build a resilient, inclusive, and forward-looking digital infrastructure that benefits all people, and drives economic growth.

It won’t be easy – but it can be done!

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