Trade 'n' Tech: the role of trade and technology in the UK's post-Covid recovery

Big questions about Britain's place in the world post-Brexit, and the shape of economic recovery post-Covid, need to be addressed...

I spent a big chunk of the Christmas break binge-watching The Crown on Netflix. Historians can argue all they want about its factual accuracy, but for me and my family it was excellent lockdown entertainment. And throughout each series, there was a consistent theme about our place in the world: what does the UK stand for, is the Kingdom united, how are we perceived internationally and what are our core strengths?

Fast track to now. The context has changed massively. We’ve just left the EU (thank goodness with a trade agreement). We’re in the middle of the biggest, quickest national vaccination programme in our country’s history. And my economic forecasting friends reckon we’ll be back to pre-Covid levels of global income by the end of this year. This is great, but the fundamental, existential questions about who we are and what we’re good at remain the same.

We need a big conversation about these questions, and the business community wants a voice...

In PwC we've been trying to promote a big UK conversation, in which the business voice is writ large, about these big questions. With leadership from my wonderful friend Sir Charles Bowman and close colleague Matt Alabaster, we’ve done a mini-survey on UK Trade: The New Agenda, to which 450 businesses from up and down the country responded. We followed this up with a virtual ‘UK Trade Summit’ in November, attended by over 120 senior people from the private, public and not-for-profit sectors. Based on this we’re trying to formulate answers to those big existential questions. We’re not there yet but a number of pretty punchy themes are starting to emerge.

Trade and technology ('trade 'n' tech') will both feature prominently in Britain's post-Covid and post-Brexit future...

Firstly we’ve heard in spades about the need for us to double down on trade and inward investment. Our economists tell me that the UK has seen its share of global trade decline consistently to less than 4% today. All the businesses we’ve spoken to recognise this needs to stop. In our mini survey, 90% of respondents agreed that trade and investment are either ‘important’ or ‘very important’ for driving the post-Covid recovery across all parts of the UK. And in our UK Trade Summit, the discussion gravitated quickly towards the UK’s instinctive openness and brand as a ‘champion of free trade’; our world-leading expertise in sectors such as education, banking and healthcare; our commitment to technology-driven, place-based initiatives (e.g. the Oxford – Cambridge Arc); and our global reputation as a ‘soft power superpower’.  Secondly, it’s clear from our conversation with business that technology is going to underpin a lot of what we do to rescue the economy and drive a sustainable future, and it will feature strongly in whatever we do on trade and investment.  Here are three examples of where tech can make a difference, all of which are a bit personal to me and underpinned by some very solid, new PwC research.

Trade 'n' tech - Healthcare...

In March 2020, a few days before the first lockdown, I had a total hip replacement operation – a bit drastic, but it had to be done! The medics were brilliant and, on account of Covid, all my post-operative consultations were done remotely. But I didn’t really think the medics had the right infrastructure or skills in place for this, e.g. they did remote via telephone, not video, which I think would have been better. To be honest, I felt that a lot of them found the remote delivery model wholly counter-cultural. My personal experience in this regard aligns completely with new PwC research.  

Tech powered healthcare is definitely going to be a big deal for the UK’s future – we need major investment in our digital infrastructure, and a revolution in skills and culture across health sector professionals. And whilst this will require the ‘best of British’ to be to the fore – as it’s been recently with Covid vaccine development - global collaboration and bilateral investments will also be required. For example, in the UK Government’s most recent public statement of so-called High Potential Opportunities (HPOs) – of the big strategic investment opportunities that have been prioritised by UK leaders, technology-driven opportunities in health and life sciences feature prominently. For example, one such UK HPO is looking for investors interested in tissue repair and regeneration who want to be part of the technology convergence happening in the Leeds City Region.

[click here] to download Tech powered healthcare report

Trade 'n' tech - Cities...

I live on Cyprus Avenue in Belfast, where the great Irish musician Van Morrison had two 70th birthday concerts a few years ago. I love the city very much. But like many up and down the UK, we’ve really struggled during the pandemic, and this has brought into sharp focus the need for the Government’s so-called levelling up agenda. The Whitehall policy people I speak to are hyper about this place-focused campaign spearheaded by the Prime Minister, which is aimed at reducing regional and local inequalities and driving prosperity outside London.  

But in order to turn levelling up from rhetoric to reality, forward-thinking local and regional leaders in the UK are focusing a lot on trade and technology. For example, the West Midlands – a dynamic industrial region in the heart of England - has recently established a West Midlands India Partnership, and I’ve been supporting them on their strategy for post-Covid recovery. It’s focused on drawing on the strong historical and cultural ties between the West Midlands and India, leveraging the region’s top class universities and establishing new partnerships with Indian businesses and higher education institutions.  

More generally there’s a huge trade and tech opportunity in relation to “smart cities” that harness the potential of green technology and develop new academic collaboration and international investment to power R&D in urban transport, smart energy systems and digital healthcare.  The potential that stems from such international partnerships is limitless, and is sure to accelerate the solutions world leaders need to ensure a good, sustainable quality of life for their citizens, especially given the exponential growth in urban populations that we are witnessing.

[click here] to download 'Good Growth for Cities' report

Trade 'n' tech - Climate...

I had the privilege of hosting Minster Greg Hands and Sir Nicholas Kay at our 'The Big Reset' International Development conference before Christmas, our first ever fully remote conference. A big part of the discussion focused on the UK hosting the forthcoming UN COP26 climate conference in the great city of Glasgow. 

The UK Prime Minister Boris Johnson has rightly put climate change and Net Zero right at the top of the policy agenda. For example, the new Office for Investment (OfI) headed up by the impressive Minister Gerry Grimstone, is aimed at providing a ‘single front door’ and getting new momentum behind top tier, strategic investment projects.  There are High Potential Opportunities for investors interested in renewable technologies in the UK, and clusters of excellence in parts of Scotland and the North East of England that play host to cutting-edge innovations in power provision, including world-leading off-shore wind capabilities. It's clear that Net Zero, clean growth and green investment are all big priorities for the new OfI - and rightly so!  The scale of the global challenge – to transform every sector in the global economy so we can reach Net Zero carbon emissions by 2050 – is immense and unprecedented. And we’ve no hope of meeting such a challenge without innovative use of technology and global collaboration.

[click here] to download 'The State of Climate Tech 2020' report

Trade 'n' tech - together we're stronger...

Two final things that have come out of our ‘big conversation’ so far: firstly, we need to make sure we don’t miss the opportunities to use technology more effectively for activities relating to trade and investment themselves, e.g:

• technology that quickly connects buyers and sellers in different countries;
• technology that coherently maps regional assets and skills profiles for potential inward investors; and
• technology that makes it easier for everyday businesses to understand Governments’ and investors’ priorities, and get involved as appropriate.  

The UK Government, through DIT, is pretty solid on this, but I’ve no doubt more can be done.  Secondly, it’s crystal clear from our ‘big conversation’ that no one organisation or type of organisation can do ‘trade ‘n’ tech’ on its own. We’re in this together – business, academia, government and civil society - and we need to work together to get out of it. To do this we’ll all need to get behind a common goal – something like “build back better, fairer and greener” would be great. Let’s go for it…together! 

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Dr David Armstrong is a Partner in PwC and leads PwC’s International Development team in the UK. He focuses mainly on work relating to trade, investment, skills and education for the Foreign Commonwealth and Development Office and Department for International Trade.    David is married with three children and is a passionate supporter of the local live music scene in his hometown of Belfast where, prior to lockdown, he played regular live gigs.  

A version of this article will be presented at the Department for International Trade’s Annual UK Tech Week (Online) Conference, on 17 February 2021. DIT offer free and confidential services to potential investors including tailored market research; city / country location analysis; guidance in relation to business environment, tax and incentives, skills and recruitment; and links with key contacts such as centres of excellence, NGOs and sector representatives to help businesses understand if the UK is the place to invest.