The Knowledge Economy

In less than three years time, more than half of UK GDP will be generated by people who create ‘something from nothing’, according to the 2007 Developing the Future (DtF) report which we helped our client Microsoft launch yesterday.

The report was commissioned by Microsoft and co-sponsored by Intellect, the British Computer Society (BCS) and The City University, London, and it sets out the key challenges facing the UK as it evolves into a fully-fledged knowledge-based economy.

Some of the key drivers identified by the DtF report 2007 include:

The Knowledge Economy is the fastest growing part of the UK economy: It is expected that by 2010 the Knowledge Economy will contribute 50% of UK Gross Domestic Product (GDP)
Investment in the Knowledge Economy is strong: Private sector investment of £127 billion a year on intangible assets (such as software development and R&D) now equals that of tangible assets (physical and material assets such as plant equipment and property)
Globalisation has the potential to be a force for good in the software economy: Global markets will drive innovation in the UK if the challenges are met
London is a growing hub for innovation, with support from Silicon Fen, Thames Valley and Scotland’s Silicon Glen

The report also identifies a number of significant challenges that the technology industry needs to address if these opportunities are to be grasped. Primarily, these are emerging markets and skills shortages:

At current rates of growth China will overtake the UK in five years in the Knowledge Economy sector
The IT industry faces a potential skills shortage: The UK’s IT industry is growing at five to eight times the national growth average, and around 150,000 entrants to the IT workforce are required each year. But between 2001 and 2006 there was a drop of 43% in the number of students taking A-levels in Computing.
The IT industry is only 20% female and currently only 17% of those undertaking IT-related degree courses are women. In Scotland, only 15% of the IT workforce is female

Personally I would add the issue of property prices for young professionals to this list.

The DtF report 2007 is a call to action for policy makers and the industry and includes a number of key recommendations (amongst others):

There is growing pressure on the UK Government to reform the National Curriculum to allow students to study computing at GCSE level and a curriculum review of teaching computing and ICT in schools is required. Current GCSE ICT courses study the use of software and technology rather than the creation of software and technology. We need to find ways to inspire young people in computing in order to generate new recruits into the industry
UK Government should put in place some robust incentives for implementation of the skills agenda with particular emphasis on SMEs
The IT industry should look to dramatically increase female recruitment in order to help fill the UK IT skills shortfall
There is a loud clear call for the UK Government to develop appropriate Intellectual Property Rights (IPR) for the ‘digital age’ to support innovation

And again, personally, I would add the need for government to speed up action to make housing affordable for young “knowledge economy” workers in key cities.

The full report can be downloaded here: http://www.microsoft.com/uk/developingthefuture/default.mspx

[tags] Knowledge Economy, Microsoft [/tags]