For the last few months, Brexit – or the departure of the United Kingdom from the European Union – has dominated global news coverage. But for those of us concerned with digital transformation, are there practical implications? Here, digital transformation expert Mark Skilton from Warwick Business School sounds off on the challenges and opportunities in a disrupted world.
Digital transformation + Brexit = what, exactly? This was the question that last month, I set out to answer for our readers.
Mark Skilton is a Professor of Practice in Warwick Business School’s Information Systems and Management Group. Also a private consultant with an incredible website and two very informative books, (Building Digital Ecosystem Architectures: A Guide to Enterprise Architecting Digital Technologies in the Digital Enterprise, 2016) and Building the Digital Enterprise: A Guide to Constructing Monetization Models Using Digital Technologies (2015)), Skilton could very well be THE global expert on this topic.
London was known as the digital capital of Europe. What was the state of digital transformation in the UK prior to Brexit?
The UK has a long history of being a leader in digital creativity and innovation. Several of the leading global creative agencies are based in the UK, and new entrepreneurial initiatives are attracted all the time – as witnessed by the Silicon Roundabout in London’s Shoreditch district and the Cambridge hub Silicon Fen. We also have huge international companies, including Unilever,Proctor & Gamble, and MasterCard, expanding their digital footprints.
Digital technology has transformed the way the private sector functions in UK companies of all sizes. Always-connected, socially engaged, multi-channel markets have influenced the local, regional, country, and international supply chains, as well as sector automation, job creation, employment productivity and GVA (gross value-added, or the measure of the value of goods and services produced in an area, industry or sector of an economy).
Overall, how do you think Brexit will affect digital transformation efforts, both within the UK and the global economy?
The UK relationship to the EU and to global digital transformation will evolve in several areas, including relationships, cybersecurity, and competitive innovation. EU legislation such as the General Data Protection Regulation (to be introduced by May 2018) will still need to be honored from the standpoint of privacy and consensus rights if this becomes a mandatory trade position. The new UK surveillance bill seeking mandatory access to company and consumer data through “back door” methods will be a legal issue for other countries. National security and corporate cyber protection will still need cross border collaboration in governments and industry, and the UK will continue to be a leader in this field.
Digital transformation will enable greater online trading access. One Brexit-related issue is whether barriers to stock trading to the EU will result in a flight of both skilled talent and corporate headquarters to mainland Europe. This remains difficult to predict. But Brexit may also present a huge opportunity for the UK to seek digital transformation investment and competitive new models within the EU and other countries not defined by EU conditions.
We will still require the right human skills to create knowledge capital and financial investment to fund digital transformation. Aleksi Aaltonen, Assistant Professor in Information Systems Management at Warwick Business School, recently wrote about Brexit’s impact on startup entrepreneurship. He discussed the critical need for technology skills possessed by the migrant workforce and the problem of the proposed £35,000 earnings threshold for migrants living in the UK.
Access to EU innovation investments, including the H2020 fund of 80 billion euros, may be a casualty of the Brexit. If the UK cannot participate in these programs, we may not attract high-caliber members of the academic and scientific communities to work here. However, the EU’s efforts to form public/private partnerships that can effectively compete against Asia and the U.S. have not really come to fruition. Ironically, a UK outside the EU block may be a better way for this country to build global digital scale and to help the EU move toward a better integrated market.
For the rest of Mark's interview, check out the QuickBase Fast Track blog.