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It is great to be back in the chamber to talk about the digital economy so soon after our recent debate on digital participation.
November 20 is not usually a date that springs to the forefront of people’s minds when reflecting on the history of the digital economy. However, on this day in 1985, Microsoft changed human interaction with machine learning, because it was on that day that the first mass-produced personal computer graphic package, Windows 1.0, was released. It is from that moment that digital technology truly began to enter the workplace and our lives and, of course, that the lives of people worldwide began to be transformed.
I am grateful that Stewart Stevenson was in the chamber to give us an update on that history lesson. I am sure that he can tell me more later.
Back in 2018, where I prefer to exist, more than 102,000 people are employed in digital occupations in Scotland. The digital and information technology sector is currently worth £5.2 billion in gross value added to the economy and is forecast to be the fastest-growing sector in Scotland by 2024. However, despite that, the sector struggles to keep up with the pace and demands of change, and it requires an extra 12,800 new employees each year just to stand still.
The interesting thing is that it is a sector that not only is dominated by multinational companies but is being shaped by small and medium-sized enterprises that require more support to meet the demands. For example, in Edinburgh, jobs in digital technology increased by more than three times the United Kingdom average between 2014 and 2017, and there are now an estimated 10,000 people in the city who work in the sector across 213 businesses, creating £1.4 billion of turnover. Those figures are, of course, replicated in Glasgow and, to a degree, in Dundee, Aberdeen and Inverness.
The latest Tech Nation survey found that digital tech workers are more productive than others by, on average, £10,000 per worker, and that jobs requiring digital tech skills command higher salaries than those that do not, with the average salaries being £42,578 and £32,477 respectively.
Those figures illustrate that we have a growing and innovative sector that holds a distinct opportunity for Scotland’s economy and our future ambitions. However, it is important to remember that a business does not have to be a tech business or start-up to be able to take advantage of the digital opportunities and the emerging technologies.
Since taking over this ministerial role in June, I have travelled the length and breadth of Scotland to meet many small businesses that are taking up digital as a way of improving their business processes, capabilities and productivity.
The minister is enthusiastic, as we all should be, about the positive opportunities that she mentions. However, is there not also a danger that, if we frame this debate only in terms of the positive opportunities, we might miss a trick? There are downsides and risks involved in this agenda, too, and, without wishing to pour any cold water on the debate, I point out that we will maximise the opportunities only if we identify and take action to mitigate any downsides and risks in terms of worker protection and a host of other issues. Will the minister reflect on that?
I thank Patrick Harvie for that comment, which he also made during the digital participation debate. It is an issue that I take very seriously, and I have three main concerns.
The first is that we must ensure that ethics are right at the heart of our strategies on data.
The second is that we must protect our people—particularly, perhaps, young people who are coming through school at the moment, who only know about engaging with others online. In conjunction with Young Scot, we are supporting the five rights campaign, which I am sure that Patrick Harvie has come across. The campaign is about young people’s rights: to remove information; to know what their rights are; to safety and support online; to informed and conscious use of online; and to digital literacy.
The third is to ensure that, as Patrick Harvie says, when it comes to automation, workers’ rights are at the heart of the debate.
Great. To conclude on Patrick Harvie’s question, those issues are shaping our strategy, both for economic growth because of digital and for supporting workers and people who are using digital.
I mentioned small businesses that are taking up digital. Many of those businesses, including Swansons Fruit Company in Inverness, WoodBlocX in Dingwall and Prater Contracts in Lanarkshire, are not necessarily tech companies and were initially far removed from the digital technology that they are now using. Thanks to Government-backed programmes such as digital boost and the recently launched digital development loan, they are now finding new ways to get digital and enhance their digital presence. It is companies such as those, which are the life-blood of the local Scottish economy, that we have to encourage to become more digitally aware.
On my travels, not least as a Highland MSP, I often hear that connectivity, especially in rural areas, is a barrier to small businesses getting online. While that may be true in many hard-to-reach areas in this vast country of ours, even those that are connected are still not making the most of the infrastructure that they have. A recent Scotland’s Rural College report about unlocking the digital potential of rural areas in Scotland and across the UK stated that
“even when such concerns about network connectivity are put aside, more than half (52%) the rural businesses surveyed identified some other constraint which has reduced their ability to go digital.”
There are clearly barriers other than connectivity that we need to address, and I hope that this debate will be constructive in doing so. Some of those barriers are structural, but others are personal and about aspiration and ambition. It is that ambition that we want to see unlocked, which is why digital represents a huge opportunity for Scotland. If we ensure that our support is right, it will also afford the most excluded from the job market—be they mothers of young children, disabled people or young people with fresh ideas—the same chances to participate as anyone else.
The other advantage of the digital economy is that it enables businesses to become more productive, to streamline processes and to become more efficient. A recent CBI Scotland report said that Scotland’s productivity falls short of that of overseas countries and differs across Scotland, with a variation between local authorities of up to 50 per cent. The report stated that one of the contributing factors to productivity was a skilled and diverse workforce. It quoted research that suggests that firms with a high level of gender diversity outperform rivals by as much as 15 per cent and firms with high levels of ethnic diversity outperform rivals by as much as 35 per cent.
That is why the Deputy First Minister’s commitment to ensure that there are more teachers in science, technology, engineering and mathematics in particular is so welcome, and the career-changing bursaries of £20,000 to those who want to move into teaching STEM subjects are so vital. If the next generation, in particular, has the digital skills to enable them not just to leave school as future software engineers but to become teachers, doctors, nurses and carers with the digital skills that they need, we will see transformation right across the public and private sectors.
There are great examples of Scottish tech companies that are striving to address the need for partnership between business and Government in order to spread good working practices and change workplace culture. In partnership with the Scottish Government, many companies have signed up to the 50:50 by 2020 initiative, which aims for gender-balanced boards in order to ensure that higher level of productivity.
Some businesses identify the challenge of engaging with the public sector as one of the hurdles that they need to overcome. Imagine if we could harness the power of digital so that a business does not need to provide the public sector with the same information multiple times, and if the time that is taken to make a decision could be reduced from 28 days to one day. Imagine if there was a single place where a business or a citizen could access information on the progress of an application on a device and at a time of their choice. The Scottish Environment Protection Agency anticipates such a time reduction following introduction of its common licensing platform. All that is possible because SEPA has automated repetitive clerical tasks and joined them up, allowing staff to focus where they can truly add value. That is what we want to see right across the public sector, through our supporting businesses, citizens and entrepreneurs as much as possible to achieve their ambitions.
Of course, we need to do that in a way that ensures that we operate safely and securely online. That is why we are putting cyber resilience at the core of everything that we do in the digital world. Our public sector action plan was published last November and is now well advanced, with non-departmental public bodies, health boards, local authorities, universities and colleges all working hard to ensure a common baseline of cyber resilience. Earlier this year, the Deputy First Minister published our private and third sector action plans on cyber resilience, which set out how the Scottish Government will work in partnership with leading businesses and charities, and with the national cyber security centre, to help make Scotland a world-leading nation in cyber resilience.
Everybody will be well aware of the strength of Scotland’s financial sector. The depth of talent and expertise that we have in Scotland, particularly in Glasgow and Edinburgh, is one reason why companies continue to choose to invest in Scotland. For example, Barclays recently announced its commitment to a new facility in Glasgow and, just this morning, I visited Clydesdale Bank to see the ways in which it is supporting businesses and customers with better online platforms.
Advances in technology, particularly in the field of data, mean that the world of financial services is changing. Scotland is particularly well placed, with its strong financial sector and its world-renowned data and analytical expertise, to exploit those opportunities. The value of data-driven innovation to the economy is forecast to be up to £20 billion over the next five years, and there are aspirations for Scotland to become a global centre of excellence in the field, with positive developments beginning to happen in oil and healthcare, as well as in financial technology. We cannot allow unwanted and unneeded barriers to jeopardise those aspirations.
Much of what I have spoken about this afternoon looks at the positives that we possess as a country and at the opportunities that we have in adopting digital. Our refreshed digital strategy in 2017 has a vision of digital for everybody at its heart. Of course, work needs to be done to realise our ambitions, but we are starting from a solid base.
I encourage every member in the chamber to champion the message of digital to their constituents and businesses. They should consider some of the challenges that Patrick Harvie set out in relation to the ethics that are required, the rights of our people and the way in which we protect users and businesses. However, over the course of the debate, I hope that we can look at the ways in which the digital economy provides for businesses and citizens in every local area throughout Scotland.
That the Parliament recognises the benefits of the digital economy to every business, region and citizen in Scotland; acknowledges the strong evidence of the importance of technology to growing Scotland’s business base and productivity levels, and recognises that a combined focus by government, the wider public sector and private sector is the most effective way of improving the digital capabilities and processes of Scotland’s businesses and workforce, which in turn will increase productivity, profitability and, as a consequence, result in higher paid jobs, building Scotland’s reputation as an innovative nation.
I am pleased to open for the Scottish Conservatives as my party’s spokesman on the digital economy. It is only a few weeks since I closed for my party in the debate on digital inclusion, which raised many pertinent issues about people’s digital access as technology continues to develop rapidly.
We are in the rapidly developing and enveloping fourth industrial revolution, which Scotland should be leading, as with the previous three revolutions. No cabinet secretary, minister, shadow minister or back bencher would be fulfilling their parliamentary duties if they did not recognise the pivotal role that digital technology will play in all our futures. It is therefore fitting that the minister has introduced another debate on the digital industries.
There is much in the Scottish Government’s motion and the Labour amendment that the Conservatives agree with. Ms Forbes should—and, I have no doubt, will—be a regular contributor to debates in her role as the digital economy minister, because there is not one aspect of our future that will not be shaped by decisions that are taken about the fourth industrial revolution.
I welcome recent research that suggests that digital devices have been taken up faster in Scotland than in any other part of the UK. However, much more can be done to go further in ensuring that Scotland has a bright digital future, as my amendment says.
As I am an MSP for a rural constituency, not a day passes when I am not contacted by an individual or an organisation that is pushing for greater urgency in delivering better connectivity in homes and premises. It is clear that far too many businesses are still not properly equipped with digital technology, which negatively affects productivity and innovation.
I genuinely hope that the reaching 100 per cent programme will deliver for rural Scotland, despite the stark warnings from Audit Scotland. When it comes to the digital revolution, we cannot afford to leave anybody behind.
We hear the term “digital divide”, which often refers simply to internet connectivity. The divide used to be between those who had broadband and those who had dial-up, and then it was between those who had broadband and those who had superfast broadband, but there is still a divide between those who have connectivity and those who do not.
As the pace of change is ever increasing, the digital divide could get wider and create divides not only in economic opportunity but even more so in the social, health and wellbeing dimensions. We cannot allow that to happen. After the previous digital debate, a constituent contacted me to ensure that we do not forget that people who suffer from digital autism could also be excluded.
We know from the digital economy business survey that was carried out last year how important developing our industries for a digital future is to them. It is concerning that only one in four businesses said that their employees were fully equipped with the skills to meet their digital needs, which was down from 37 per cent in 2014. When we combine that statistic with the fact that more than three quarters of businesses said in the survey that digital technologies are essential or important for the current operation of their business, it is clearer than ever that action needs to be taken to address the imbalances in our businesses when it comes to new technologies.
I disagree with that claim. I am involved with the borderlands deal and I look forward to an announcement in the spring about addressing the digital technology improvements that we need in rural Dumfries and Galloway and in the Borders.
We have seen advances in health and social care, and Scotland is leading the UK in developing new applications. Scotland’s universities also have a global reputation for the development of artificial intelligence—we see an expansion of the expertise at the Edinburgh centre for robotics and the University of Edinburgh’s artificial intelligence applications institute.
That all links very positively to the UK Government’s industrial strategy, which aims to put UK industries at the forefront of the industries of the future. At the heart of that is making the UK a global centre for innovation. As my amendment states, the Scottish Government and the UK Government can work together with stakeholders to ensure that the UK is not left behind in the fourth industrial revolution.
The city and region deals, which have been brought together by the two Governments working together, are a perfect opportunity for ensuring that our industries have the investment to develop new technologies and to open up new opportunities for communities, particularly communities in rural parts of Scotland, in which it is harder to bring new technologies into action. That is why I hope that the Scottish Government takes seriously the Scottish Council for Development and Industry’s recommendations. Most pressingly, it says that Scotland currently lacks the strategic leadership for the fourth industrial revolution.
Absolutely. I would have preferred it if Kate Forbes had become a cabinet secretary because, as her shadow, that might have put me in the shadow cabinet, and I would have helped to hold her to account.
As the SCDI has pointed out, the lack of leadership is not exclusively down to the Government. Again, that highlights the importance of everyone working closely on the future strategy.
We must have a national focus on what Scotland can do to harness the opportunities that come in order to boost the economy. As the minister will remember, we had a very fruitful discussion about data soon after she was appointed to her new role. I am heartened by the SCDI’s belief that data are fundamental to the latest industrial revolution and that it believes that data are a current strength of a lot of technical companies in Scotland. If we can develop a strong data strategy that can alleviate the risks that some associate with personal data, Scotland can truly unlock its potential.
I urge the Scottish National Party Government into quicker action in respect of the digital growth fund. The First Minister launched that fund, which is worth £36 million, in March 2017, but the first payments from it were not made available until June 2018. That is simply not good enough, as we always need to keep up with advances in technology.
As “Automatic ... For The People—How Scotland can harness the technologies of the Fourth Industrial Revolution to increase economic and social prosperity” points out, there have always been winners and losers from any industrial revolution and, with the
“accelerated growth in Scotland’s cities”, the productivity gap has widened in comparison with the productivity in our rural areas. Any future digital industry strategy must address that geographical imbalance. Many of our vital sectors, such as the food and drink and tourism sectors and, indeed, our education and health services, are at risk of being left behind if their demands are not met in the latest digital strategies.
We are at a critical point in how our economy will develop for the next generation, and who will be able to access the opportunities in new technologies is all-important.
The “Industrial Strategy: Building a Britain fit for the future” white paper is a hugely important piece of work that outlines just what can be achieved through working together and addressing the current imbalances.
It has been a pleasure to bring forward suggestions and to highlight more of the same in my amendment.
I move amendment S5M-14807.1, to insert at end:
“, and calls on the Scottish Government to work with the UK Government, industry, workers, academics and citizens to capitalise on opportunities available to Scottish businesses under the UK-wide industrial strategy, including through city and region deals, sector deals as well as the Industrial Strategy Challenge Fund and Innovate UK, which helps businesses develop new ideas and grow research and innovation strategies.”
This is our third debate on digital issues in several months. The minister was right to highlight the important contribution that the digital economy can make in Scotland and that we have to get that crucial area of the economy absolutely right, as it will continue to grow. That will be a test of whether we properly have an economy that is fit for the 21st century.
I want to bring two issues to the fore: getting more people access to the technology and ensuring that we address the skills that are required in order to ensure that we make the most of the potential of our digital economy.
From reflecting on the previous couple of debates, there is a slight feeling that a bubble debate is going on at Holyrood in that people are getting concerned about connectivity speeds and what particular types of technology are available in different parts of the country. There is a lack of recognition that, sadly, too many people in too many areas of the country do not have access to the internet at all, never mind information technology devices.
That is because there are areas in which there is a lot of child poverty. In Scotland, 230,000 kids are still living in child poverty and 487,000 people are not being paid the living wage. In Rutherglen Central and North—one of the wards in the Glasgow region that I represent—just short of 28 per cent of children are living in child poverty. For people who are bringing up kids in a house like that, it is difficult to make ends meet, to pay the bills and to put proper, nourishing meals on the table. They do not have the money that people in other areas have to enable access to information technology. If people do not have access to the appropriate digital devices, that is detrimental not only to those individuals but to the economy, because if people do not have access to information technology, companies’ economic access to them through digital connectivity is restricted.
With regard to the budget, there is a bigger debate to be had about how we lift people out of poverty and increase household income. Ultimately, we need to address those issues if we are going to ensure that there is greater digital connectivity coverage in the country. That has a direct input into business; it is not just about the individuals.
We need to look at making the most of the area. Only 3 per cent of companies in Scotland are in the top rating for their digital capability, which means that we have a lot further to go. Another issue is getting the right people into those companies. I acknowledge that the Government has made some progress on that, but when I speak to businesses, one of the shortcomings that they see is that college and university graduates are not quite skilled enough in the technologies that are required for the jobs that the businesses are creating.
This is a fast-moving area, and we need to ensure that we have people coming in not just with the appropriate skills, but with the appropriate capability to pick up and develop the technologies quickly.
I agree with a lot of the member’s points. Does he have any thoughts on supporting the current workforce with reskilling and upskilling, so that people have the digital skills no matter what job they have?
Kate Forbes makes an important point, because one of the issues is automation. As we automate more, that will have tremendous advantages for business and for individuals, but, unfortunately, there are people who do not yet have those IT skills. As individual businesses change their focus, they should try to make sure that they take their employee base with them and give the employees the opportunities to upskill. There is a link into the Government strategy and into the higher and further education sector, to make sure that people have proper training opportunities. It is absolutely key that automation does not mean that people are left behind, ultimately disenfranchised and potentially left out of a job. That is very important.
We need to address how to get more women into STEM positions. Sadly, women make up only 19 per cent of the tech workforce, so we are not making the most of bringing women forward for those positions. That goes all the way back to school level. In 2012, only 32 per cent of qualifications in computer-related subjects were achieved by women. The position deteriorated recently and the proportion has reduced by nearly half, to 18 per cent, which demonstrates the issue that we have in bringing girls and young women into positions in the sector. We are failing to make the most of our potential in that regard.
This is a massive issue for the Government and the Parliament, as we look to build a successful Scottish economy. It requires an overall strategy, which ensures that we give as many people as possible access to technology, so that they can contribute to the economy. We must have a joined-up strategy, which runs through from school and university to employers, to ensure that people are properly skilled to be able to make the most of the advantages of the 21st century.
This is an important debate, which gives us big issues to discuss. There are opportunities; there are also challenges that we need to address.
I move amendment S5M-14807.2, to insert at end:
“; further recognises that Scotland’s digital skills gap and the digital divide, which affects far too many people in rural communities, those on the lowest incomes, people with physical or mental health conditions, and older people and women, who are often digitally excluded, poses a threat to Scotland’s ability to maximise the benefits of digitisation; agrees that strategic leadership and a comprehensive strategy is needed, which includes ensuring that digital skills development is embedded in schools, from primary to further and higher education, that employers are supported to embrace retraining and upskilling, that existing infrastructure constraints, and other barriers to digital inclusion, are addressed and that the challenges of cybersecurity and securing digital democracy are recognised, and agrees that the development of a comprehensive strategy must have the principles of fair work at its heart and include the involvement of the trade unions to ensure that the benefits of digitisation can be realised for all.”
There is a savage irony for me as I start to speak in this debate, in that today, much against my better judgment, I was foolish enough to trust my device with my notes, and now the screen has frozen and the device is unusable, so I am going to have to wing it. [
I remember that the first thing that I was supposed to do was to draw attention to my membership of the Open Rights Group, just as I did at the start of the debate three weeks ago. I will expand on themes that we touched on in that, because there is a great deal of overlap between the two debates.
My experience with the device that is in front of me reminds me of one of the first feelings of frustration that I had on being elected to this Parliament, when I found that I would be locked into a Microsoft environment—not one that I would have chosen. Members of this Parliament are not given the option of spending a fixed budget on IT to meet their needs; we are told that we have to live within a walled garden. That is clearly still a frustration for me; I do not know whether other members have the same experience.
The member should try rebooting his device.
Does the member agree that the feeling that he is experiencing now is shared by many rural constituents, including two who are sitting in the gallery, who are from a farming company and experience the same frustration daily when their internet connection goes down? We need to accelerate roll-out.
I certainly recognise that frustration.
One of the arguments that I made in the previous debate, which I make again, is that although we should be concerned to ensure that everyone has adequate access, I think that there is an obsession with the idea that absolutely everyone in the country must have superfast speeds. I am not sure that I would prioritise someone in my street in Partick getting superfast speeds over people in other parts of the country getting speeds that are good enough. We need some discussion about what access to networks and broadband is good enough, rather than thinking that if people do not have 30Mbps connections they are somehow digitally deprived.
Roll-out, uptake and ability to access are not the only things that we should be debating. I want to talk about three broad themes: impact on the workplace, the framework of laws that protect things like copyrights and patents, and the digital rights agenda.
James Kelly mentioned the impact of automation on people who in the future might not have jobs—or certainly jobs that pay them a liveable, secure, reliable income. We have debated that on a number of occasions. In particular, we have debated the impact of the gig economy and its employment standards. We have talked about the vulnerability that people live with when their income is temperamental or unpredictable, or when the companies that operate the platforms through which they get access to work do not regard themselves as having employers’ responsibilities towards their workers.
People might not be doing tech work or working in a tech industry, but if they are working across a platform that is provided by a tech business they are affected by it, and a great many people are working for significantly less than the minimum wage, let alone the living wage, with no security around holiday entitlement, sick leave and so on. There are a host of workplace protection issues in that regard.
Even for the big tech businesses, there are issues. I mention our neighbours Rockstar North in this context, only because it has had negative attention in the press recently in relation to workplace issues. Among that press attention, some individuals have been quoted as saying that things are getting better; they have been conscious about the need to improve. However, that consciousness reminds us that big tech industries can often be, and have often been, very exploitative in expecting huge amounts of overtime, including unpaid overtime, particularly in what is referred to in the games industry as the crunch period—the final frantic phase of the development of a new game or product—when people are expected to work above and beyond their contracted hours.
We want a fair economy, and we recognise that the Scottish Government has a fair work agenda. We need to think about the new aspects of that agenda that have to develop in relation to the tech industries and the digital economy.
The second theme that I want to talk about is loosely called “intellectual property”. I have used that phrase in the past, but I have been persuaded that it is a confusing term. We should be talking in different ways about copyright, patent and other forms of trade protection such as trade secret protection or trademark protection. They have different purposes. In particular, we see copyright and patent used in different ways in relation to software. We should be asking whether those are the right forms of protection. Are they stimulating genuine innovation or are they merely protecting those who own a walled garden such as the device that I am holding—whether they serve us well or poorly on any one day? Is the copyright and patent framework the right way to achieve the maximum social benefit? It should not just be about maximising the profit of intellectual property owners, but about maximising the social benefit and the social utility that comes from creativity.
The arguments on copyright ought not to be playing out in relation to a piece of code in the same way that they do for the latest Hollywood blockbuster. However, at the moment we seem to be using a legal framework that protects the profitability of the biggest businesses and the owners of the most profitable bits of IP while not protecting those who want to earn an ordinary living doing creative work, whether in the digital industries or elsewhere, and we are not necessarily stimulating the greatest production or dissemination of creative goods. We need a fundamental debate—and it has to be on an international basis—about the reform of intellectual property laws.
Finally, on digital rights, which I have spoken of in the past, I am pleased that the Labour amendment uses the phrase “digital democracy”, because there are fundamental questions in the wake of the deliberate hacking of the democratic process here, in the US and in other countries. Even analogue democracy can be hacked digitally and we need to be looking at a whole host of digital rights in relation to privacy, surveillance and the operation of the basic democratic system. These are unanswered questions, as yet, and I do not expect the Government to have all of the answers, but those questions need to be on the agenda, rather than the agenda being one of only growth, growth, growth.
The Scottish Government’s motion makes it clear that Parliament should recognise
“the benefits of the digital economy to every business, region and citizen in Scotland”.
I would be surprised if there is anyone in the chamber who does not see the huge benefits to be gained from promoting our digital economy. By connecting businesses and individuals, developing new technologies, innovation and education, and creating new skills and highly paid jobs, we can and should take advantage of changing global markets.
However, none of that matters one jot if it is not backed up by world-class digital infrastructure. For many people living in rural and remote communities, the feeling is that they have been simply left behind. The minister knows that in Aberdeenshire and her own constituency in the Highlands and Islands region, communities have not had anywhere near the same level of access to the technological revolution that some other areas have. In fact, the number of people without access to broadband in Aberdeenshire is second only to the number in the minister’s Highlands and Islands region. Citizens Advice Scotland reports that about four in 10 rural consumers have had problems with their broadband service in the past year. I want to know from the minister what the Scottish Government is doing to deliver on its commitment to connect the thousands of homes and businesses that have been left behind.
I will answer with two points. First, Mike Rumbles will know about our commitment, which is backed up with £600 million, to connect 100 per cent of properties to superfast broadband. If he knows well the frustration and the need in his constituency to see that commitment delivered, I know those things even better in my constituency.
Secondly, I will throw back to Mr Rumbles a question that I asked him in our digital participation debate. In the light of the quote that I gave earlier, we know that even where there is connectivity, we need to do more to support the skills of businesses and citizens to make the most of digital. How does he propose that we do that where there is infrastructure for more than 95 per cent of the country?
We must make sure that we do not put the cart before the horse. It is useful to have the infrastructure before we talk about all the other things that we need to make progress. If the infrastructure is not there in the first place, how can we possibly address what needs to be done?
With regard to the R100 programme, we are now halfway through this parliamentary session and the minister must know that progress to get everybody connected has been glacial. We are now at the 11th hour of the Scottish Government’s election promise—I hear a murmur from the SNP back benches—to achieve 100 per cent coverage by May 2021, which Fergus Ewing has often spoken about in the chamber. Amazingly, that target date has moved to December 2021.
Finlay Carson has made a good point.
BT has said:
“100% coverage is achievable but will require” what it calls
“unparalleled partnership and collaboration between the contracted supplier, the Scottish Government and Scottish public sector, communities, businesses and citizens.”
It says “unparalleled”, not “glacial”, but that is not the level of effort that we are seeing from the Scottish Government on the matter.
As technology develops and digital connectivity becomes an ever-important if not essential part of modern life, it is vital that connectivity is reliable and that digital infrastructure keeps up with the rest of the country. I believe that rural areas have the most to gain from digital inclusion, both economically and socially, and that good connectivity is the answer to some of the challenges of rural living. The Scottish Government’s research shows that four fifths of Scottish businesses say that digital technology is essential or important to the future growth or competitiveness of their business. Improving Scotland’s digital infrastructure was identified by the Federation of Small Businesses as the second top priority for small businesses. Why would that be any different for rural areas? Fast and reliable access to the internet and a dependable mobile phone signal is no longer a luxury. Good connectivity is now an essential service.
Of course, there are other things that the Scottish Government can do to improve the situation for those who already have reasonable access—how fortunate they are. They include upskilling workers—which the minister asked about—as job markets change and businesses embrace new technologies, automation and even artificial intelligence. It could also help by supporting UK and international efforts to strengthen the domestic and international regulation of big tech companies in the interests of consumers.
However, for rural communities at the back of the queue, none of that will have a meaningful impact until the infrastructure is in place. At the moment, the only answer is to wait for public investment and commercial operators to fill the gap—and wait and wait we do—by which time the rest of the country will have moved forward again. That is marvellous for cities such as Glasgow and Edinburgh.
Although I support the motion that is before us, it is not the motion that I would have lodged. I am disappointed that our amendment was not selected, but we cannot challenge why amendments are not selected and I understand the reasons for that. As well as being disappointed with the motion, I think that the amendments could have had a stronger focus. In the motion and the amendments before us, we see warm words about our digital economy. I urge the Scottish Government to demonstrate real progress for our rural communities by completing the 100 per cent coverage by the date by which it said that it would in its manifesto for the most recent election.
I will start by declaring that I am a member of the Institution of Engineering and Technology, a fellow of the Royal Society for the Encouragement of Arts, Manufactures and Commerce and a professional member of the Association for Computing Machinery. As far as history is concerned, the Association for Computing Machinery is perhaps the most important of those organisations, because at a meeting of the ACM on 9 December 1968, Douglas Engelbart demonstrated a system that, as well as having windows, hypertext, graphics and videoconferencing, showed the first mouse in action. There is a video of that demonstration that can be viewed on the internet.
The Government’s motion talks about the need to harness the public sector and the private sector, so it is worth revisiting the history of how we got here. The public sector played a very important part in the digital developments that we benefit from today. Tommy Flowers, who was an engineer at the Post Office’s Dollis Hill laboratory during the second world war, used his own money to develop the first electronic computer. He scrounged a huge number of electronic valves and produced a computer for use at Bletchley Park, against the recommendation of the person who was running the place. In doing so, he contributed enormously to the war effort. The commercial company that was J Lyons and Co tea shops produced the first commercial computer, which ran its first transactions in 1951. The history that is encompassed by the motion has involved the public and the private sectors working together on a long-standing basis.
Digital ways of expressing data have been around for a very long time. It was Leibniz who, in 1679, came up with the binary system, and it was George Boole who, in 1847, introduced Boolean algebra, which underlies much of the work in this area. The first digital electronic circuit was installed in Edinburgh in 1868—it was a telegraph circuit that connected the Bank of Scotland’s head office in Edinburgh to its office in London. Incidentally, the bank installed its first telephone in 1881; the board said that that could be done only on the strict understanding that it would not be used to conduct business.
I hope that the line of the Government’s motion that says that
“a combined focus by government, the wider public sector and private sector is the most effective way of improving the digital capabilities” is relevant to some of the remarks that I have made so far.
However, let us move on to today and the important things that we must do to deliver the modern world in which everyone can benefit from the adoption of digital technologies.
We know that about 2 per cent of our workforce are employed in the digital economy. We heard from James Kelly about the gender discrepancy that exists in the industry. Although he was right to say that, it is interesting that when I started in it in 1969, the balance was more or less 50:50. What seems to have happened is that, when the BBC Micro computer was launched in 1981, parents gave it to the sons in the family. We can see from the graph that, a couple of years after that, the gender bias moved dramatically towards men. Sometimes there are cultural issues at play, as well as Government policies. However, women will be very welcome in the industry, and I hope that they will join the more than 60,000 people who are working in computing in Scotland today.
The important thing is to get the infrastructure in place. However, Mike Rumbles wants us to cut the Government’s implementation period for the R100 programme from 549 days to 334 days—the delivery schedule that Mike Rumbles wants. That would be quite a substantial downdrop. We cannot simply squeeze projects into smaller spaces, without taking risks. The non-commutativity of time and effort applies to the project.
I am somewhat confused. It was quite clear in the Government’s programme that R100 would be delivered by the next election. That is what the Scottish National Party stood on at the most recent election. In fact, that is what the First Minister was saying until January this year. It was not until Fergus Ewing changed his position, which happened in about March, that the First Minister changed her position, which was in about July, if I remember rightly. I think that people in Scotland are expecting R100 to be rolled out by May 2021, as we were originally promised. I do not understand what the obfuscation is about. Perhaps Stewart Stevenson can explain it to me.
I hope that colleagues will forgive me: I am not rebutting a single word that Edward Mountain said about previous intentions. I am making the substantial point that rolling out to the last 5 per cent is a huge programme to undertake and we need the right amount of time to get it right. Any Government that fails to deliver on a project that it has set out will quite properly find itself in a difficult position.
Presiding Officer, you have generously given me a little time back, but I will not overegg the pudding. There are 120,000 or so homes in Scotland to which we must deliver R100, but it has correctly been said that the infrastructure of communication is merely the scaffolding upon which we can build the propositions that deliver value. Getting people who are not digitally capable up to a different place in society through libraries, public spaces and the education system, and converting private and Government business to digital delivery are also part of what we must do.
I look forward to my superfast broadband being delivered by fibre. If the last 5 per cent is by fibre—as, I guess, it will be—we will be ahead of the cities for the first time. Fingers crossed.
Following that speech, I will try to remain in the modern world in which we are all forced to live.
We heard evidence during the Economy, Energy and Fair Work Committee’s inquiry into Scotland’s economic performance—we will hear more about that on Thursday—that no sectors are exempt from digital disruption, and that many face an “Innovate or die” scenario. Again, that is not a reference to, or an attempt to echo, one of Stewart Stevenson’s comments in his speech.
We heard that manufacturing companies that are embracing new technology are thriving, and that those that are not doing so are finding it more challenging to grow. It is clear that Scotland needs to harness the opportunities that are brought about by technological developments in order that we are not left behind by our competitors.
However, in too many areas in this country, we are not equipped to take full advantage of new technologies. It is particularly disappointing to note the “Digital Economy Business Survey 2017: Office of the Chief Economic Adviser” report, which shows that only one in four businesses thinks that its employees have the necessary digital skills to meet business needs. That figure is down on the figure of 37 per cent from the same survey in 2014. To make the most of the digital revolution, it is not good enough simply to have the infrastructure without the skills. Some members have touched on that, already.
Greater use being made of such skills and use of online data have been linked to an 8 per cent rise in productivity. We badly need productivity in this country.
Witnesses to the committee’s inquiry were frustrated by what they saw as continued skills shortages for technological firms in Scotland. BT said that it hoped that the national shortage in computer science teachers in Scottish schools could be addressed so that we can produce a workforce for the digital future.
The Scottish Conservative amendment today highlights the need for the Scottish Government to work together with the UK Government to make the most of the opportunities that are provided by the UK industrial strategy and other initiatives. That industrial strategy is ambitious about teaching of computing in schools in other parts of the UK, and it commits £84 million over five years to a comprehensive programme to improve teaching of computing and to drive up participation in computer science. The Scottish Government must take action in that regard, and halt the 25 per cent decline in computing teaching numbers that has been seen during the past decade and a bit.
Likewise, as the need for digital skills increases, it is important not to leave people behind. We often look ahead to the future with trepidation as the new technology that we enjoy replaces the need for lower-skilled work. As downturns happen in sectors—oil and gas, for example—people find that the lack of a dynamic approach to skills provision renders them stuck in a particular field, competing for shrinking numbers of jobs.
There is also an acknowledgement that most skills interventions focus more on younger generations and less on reskilling people to contribute to the modern digital economy as they might have done to a past economy. The industrial strategy acknowledges the new economy and the changes that will be required to support it. It commits to a national retraining scheme, which the Chancellor of the Exchequer recently announced he would fund with £100 million, including for digital skills courses using artificial intelligence.
The Scottish Government is playing catch-up in this area, but it has announced a national retraining partnership in its latest programme for government. That is to be welcomed, but it needs to be pursued without any further delay, given the pace of technological change. This is about embracing the future in Scotland, giving people the skills that they need to thrive in a new environment, and supporting employers to adapt.
As we move into that future, Edinburgh and the wider Lothian region will play a key role. As a Lothian MSP. I welcome the Edinburgh and south-east Scotland city region deal, which is an example of what can be achieved in the digital age if the two Governments and others work together. The £1.3 billion that is being invested aims, among other things, to turn the region into the data capital of Europe—data being a commodity that is fundamental to the digital economy.
The University of Edinburgh hub at Easter Bush will be just one of the beneficiaries of the deal, and will work towards meeting a challenge that is global in nature but which affects us directly here in Scotland. Using digital agriculture—agritech, as it is called—it will seek to boost efficiency in the sector by collating a wide range of data that will be able to determine the right food species and the right products, in the right field at the right time, to maximise agricultural productivity. That will help to increase global food supply at a time when it is estimated that agricultural production needs to increase by 50 per cent by 2050.
Easter Bush and other projects that make up the Edinburgh city region deal build on the tech expertise that we already have in the region. There were 363 tech start-ups incorporated in Edinburgh in 2017 alone. There is therefore reason to be excited that the region and Scotland will be productive and innovative digital economies in the future, but more needs to be done to ensure that we have the required skills to achieve that.
The two main issues that Scotland faces in pressing forward with our digital ambitions are getting the computer science software development skills that we need and finding a way to continue to participate in the digital single market in Europe post-Brexit.
We know that the digital economy is the fastest-growing sector worldwide and that its growth will not stop any time soon. We think that it is worth about £5 billion to the economy, as the minister mentioned, and there are around 100,000 technical professionals working in the industry just now.
The cabinet secretary’s vision to take that number to 150,000 over the next four or five years is to be welcomed, and his aim of reaching out to schools and encouraging more females to choose science and computing is absolutely essential if we are even to keep pace with the demand for software skills.
The figures coming from industry in Scotland show that more than half of the demand is for technology skills and that about 70 per cent of that demand is for software development skills. It is therefore good to see a number of initiatives to support those skills. The digital skills programme, the digital development fund, CodeClan and the Digital Xtra Fund are all examples of interventions that are making a difference.
The other key area, which I have mentioned, is the digital single market in Europe and what our participation in or association with that will look like post-Brexit. The European digital single market is one of the biggest trade markets for online digital services. It is estimated that spending online in Europe is worth about €500 billion a year. Incredibly, that figure is expected to double by 2020.
It is also crucial to think about how the UK and Scotland can continue to share in or work alongside that digital market sector, which is worth about €400 billion per year to the European economy and supports hundreds of thousands of jobs. Worryingly, there is not even a mention of that in the UK Government’s proposal, which was issued last week; nor is there a mention of it in the industrial strategy that was mentioned earlier.
The digital single market has three main pillars or aims: access to online products and services; setting the right conditions for digital services and networks to thrive in; and growing the digital economy. It will allow consumers to access all their digital content right across Europe at no extra cost—if we are still in the single market. There will be no geographic blocking of our data and applications any more—if we are still in the single market. It will also continue to allow consumers to use their mobile phones across Europe with no roaming charges applied—if we are still in the single market. The question is: what is Scotland’s role and what is the UK’s role in all of this?
The consumer experience is crucial. If the situation is not resolved, people from Scotland and the UK will get none of the benefits but all the costs and restrictions as soon as they set foot in Europe. For businesses, the situation will be much worse—it will mean that Scottish and UK businesses will be unable to compete for and offer digital services within that market. Such an exclusion will be a huge disadvantage to them.
It is time that we heard from industry about the matter so that some sensible arrangement can be put in place before it is too late. Any politician who claims that it is a good thing to leave such a market or not to have any relationship at all with it really needs to think again about the damage that they are about to do.
I do not want to take members back in time to the late 1970s, when I studied and graduated in computer science, but some of the key issues then are still with us now, such as how we can get more young women to take up careers in this amazing industry. That issue was touched on by James Kelly.
I mentioned the cabinet secretary’s welcome intention of reaching out and encouraging youngsters at school—particularly girls—to take up careers in software. It is a well-paid profession—it is more highly paid than most other sectors—that usually involves full-time jobs and allows those with the right skills to work anywhere in the world in some of the most exciting areas of development, from film, animation and games technology to systems to help our national health service or to manage data and services in a huge range of ways across the public and private sectors. No area of business or industry can succeed without good software development, and we need good software developers to build all the systems of the future.
The journey has to start early, at primary school, and there must be an almost continual focus on it to give us a realistic chance of success. When I meet youngsters who come to the Parliament from the many schools in my constituency, I usually ask, “Who wants to work in software development?” The number of pupils who say yes is still worryingly low, and there lies the challenge. If we want youngsters to join this wonderful industry, we have to excite those young minds about their potential and what they can achieve.
The challenges in front of us are formidable. On the one hand, the commitments that the Scottish Government is making are clear and we can see the road ahead. Keeping pace with technological change and demands will be challenge enough, but our aim is to push ahead and make Scotland a leader in the digital economy, although that is not entirely within our gift. On the other hand, the sooner that level heads and individuals in the UK Government with some technical knowledge about digital technology have their say and can effect a change of approach in relation to the digital single market in Europe, the better for us all.
The timing of the debate is apt because, at a point when the whole of UK politics seems to be focused on and obsessed with whether the Prime Minister’s deal will get through Parliament, we are having a debate on a topic that we need to talk about: technology change. That is the problem with Brexit. At a time when we have to face up to the realities of how technology will change the world of work, we are focused on issues that are only a distraction and that will prevent our doing that.
In December 2016, Mark Carney gave a speech about the importance of the changes and the need to face up to them from a policy perspective. He said:
“The fundamental challenge is that alongside the great benefits ... every technological revolution mercilessly destroys jobs and livelihoods”.
He went on to point out that, especially with the latest wave of technology change, that includes service jobs that many professional people until now thought were preserved and not subject to the sorts of change that we have seen in other industries.
The debate is sometimes caught between those who say that we all need to fear the rise of the robots or learn to love our new robot masters and those who say that nothing has changed, that this is just another technological wave and that we have always coped with those in the past. The reality is somewhere in between, but some things are different this time round and, fundamentally, from a policy perspective, we have to face up to them.
One of those issues is pace. Following recent technology changes, we have seen that industries can find themselves irrelevant within a matter of years. The record industry is a good example of that. In a matter of years, its whole business model became completely irrelevant.
There is also the manner of the technology change. We now have technologies that have cognitive functions and that can make assessments and decisions. Coupled with robotics, we have technology change that has the very real prospect of displacing jobs in entire supply chains, which will no longer need human input. From the point at which an item is produced through to its delivery to the consumer, everything will be carried out by robots and artificial intelligence. That is the reality of the challenge that is in front of us.
However, the good news is that, as members have said, we have some of the ingredients that we need to take advantage of the change—particularly in Edinburgh, which, in the past few years, has become a major technology hub without anyone really noticing. I do not need to repeat all the numbers that others have mentioned; the key figure is the one that the minister gave when he said that the number of jobs in technology in Edinburgh has increased at three times the UK average rate. As other members have pointed out, recognition must be given to the university. The informatics department at the University of Edinburgh is the largest such department in Europe. It is a major international hub and, what is more, it has been at the heart of technology start-ups that now employ thousands of people in the city. That is a success story, but we need to learn from it so that the whole country can benefit from the same things.
At its heart, the issue is about having talented people with the right skills and knowledge. It is also about investment, but there has not been enough discussion of that in the debate so far. In countries and systems that have dealt with the issue successfully, Government-backed investment has been at the heart of that. Whether we look at the Defense Advanced Research Projects Agency in the United States, Tekes in Finland or the National Taiwan University of Science and Technology, behind them all is the fact that the Government sometimes needs to step in and take the risks that the private sector cannot take. That applies even in a country such as America.
The other issue is scale and form. Those start-ups are often not in the form that we are used to. They often involve people working from coffee shops with laptops. That is all that is needed for a technology-based industry of the future. Big factories and offices are not necessarily needed. Robots costing $20,000 mean that things can be produced in a garage with the same cost-efficiencies as by a multinational corporation in a factory. Those are the realities and changes that technology means. We must make sure that our infrastructure and public policy allow us to take advantage of those things instead of being left behind, and I think we can do so.
There is a real challenge here. I come from an industry that has already seen many of the consequences of automation. Prior to coming to Parliament, I worked in retail, and we all know the issues that are faced on the high street. Although we might not call those issues the product of automation, the same factors lie behind them. The lessons are there and we need to learn them now.
Every business needs to become a tech business. Every worker and every person working in every company needs to understand the application of technology to their job. I worry when people talk about 2 per cent of people working in technology. The reality is that 100 per cent of the workforce needs to be able to understand and apply technologies. According to McKinsey & Company, 36 per cent of jobs in the workplace could be replaced. In transport and distribution, the figure goes up to 77 per cent, and that industry employs 5 per cent of the workforce.
We should learn the lessons from our recent past. There are cities and areas in Scotland that have yet to recover from previous technology changes, whether the change was in the steel industry, in shipbuilding, or in jute manufacture. In the areas that were reliant on those industries in the past, there are still higher levels of underutilisation of the working-age population. We need to learn those lessons lest we suffer again in the future.
We also need to address the skills agenda. Our skills regime needs to be as much about reskilling people as it is about giving people skills at the start of their working lives—if not more so. The emphasis for colleges, universities and apprenticeships is too much on young people who are leaving school; it needs to be as much on older people.
The solutions are about education, teachers, investment, support for innovation and, above all, making sure that our city economies are at the heart of our national economy. That needs to go far beyond city deals; it needs to be about making our cities work together. The big missed opportunity of city deals is that there are separate ones for our Scottish cities rather than one cohesive strategy for them all.
I want to touch on a couple of points that Daniel Johnson spoke about. His final comment was about the city deals. I remind Mr Johnson that city deals are not solely about the cities. In my area in the west of Scotland, it is about the Glasgow regional deal, which includes Inverclyde, West Dunbartonshire, East Dunbartonshire and other areas. I appreciate that Mr Johnson represents a city, but I do not.
The second point is about Government investment. Mr Johnson will be aware of the total contribution of £280 million from across the public sector in Scotland for the Digital Scotland superfast broadband scheme and the £600 million investment by the Scottish Government in the R100 programme, which seeks to provide access to superfast broadband to all homes and businesses.
I agree with the member’s points, but I sometimes worry that the debate focuses on connection to the internet, rather than looking beyond that. It is about growing businesses within the technology space. I believe that that is where there is a bigger role for Government.
That is a valid point. At the same time, if people are not connected, there is a deficit for them and their businesses to make up in progressing their interests—particularly for smaller businesses, which I will touch on in a moment.
Prior to the SNP Government’s intervention, superfast broadband coverage in my constituency was below 80 per cent; by the end of 2017, it was up to 96.2 per cent; and by 2021, every home and business in Scotland will have access to superfast broadband, thanks to the Scottish Government’s £600 million of investment, which is the biggest public investment ever made in a UK broadband project.
Can the member remind the chamber whether the investment in broadband in the Scottish Government’s current budget went up or down? If he cannot remember, I can help him with that—it went down.
I will come to that point in a moment, and Mr Carson will need to listen to the points that I make.
The figures indicate that things are looking good and have improved for Inverclyde, but there are still pockets of my constituency that are not included in the roll-out. Consequently, I have been contacted by a local business that is considering closing due to the poor broadband speeds that it receives. Outdoor Spares Ltd, based in Lynedoch industrial estate in Greenock—not a rural part of my constituency, but a town—has tried numerous ways to improve its broadband speed over the past few years. That is because, of the two BT Openreach cabinets that service businesses and homes in the area, only one is fibre-enabled and can provide ultra-fast broadband now. The other, cabinet 64, which Outdoor Spares Ltd is serviced by, was not enabled during the last roll-out.
Ian Homer, who owns Outdoor Spares Ltd, waited to see whether cabinet 64 would be one of the first to be upgraded in the current, final phase of R100. It is now almost 2019, and Ian’s business is still struggling to operate due to the abysmal broadband speeds. In September of this year, Ian said that he has started to work from home more frequently as the broadband speeds in the industrial estate are not suitable for running his business, which is an online shop supplying a range of spare parts and accessories for Mountfield, Stihl, Partner, Makita, Honda and Flymo retailers. Although his business has been growing, the fact that he does not know whether the roll-out will reach him next month or in two years’ time means that Ian is finding it difficult to plan for his business, unless those plans involve locating elsewhere, which would result in local jobs being lost, all because of poor broadband speeds.
A quick survey of other tenants in Lynedoch industrial estate shows that some are getting download speeds of around 15MB and upload speeds of around 1MB to 3MB, which is what Ian gets on a good day. That means that he does not qualify for the UK Government’s better broadband subsidy scheme, so he is saddled with broadband speeds that are not conducive to a growing, web-based business.
The last thing that Inverclyde needs is for people to think that we are not able to support technology-based businesses. We can, we have done and we will do so even more in the future.
Digital technology benefits not only tech companies, but all kinds of businesses, enabling them to engage with customers directly, to develop new processes and products and to sell those products to a global market, 24 hours a day, at a relatively low cost. It is therefore crucial that industrial estates that house dozens of businesses are not left until last in the roll-out. If they are, constituencies such as mine will suffer.
Another local business that approached me about its poor broadband speeds is the Ardgowan Fishery. Why is it important in terms of this discussion? It is an important business for the local tourism market as it brings people into Inverclyde to spend money.
I recognise that other parts of Scotland have more challenges than my constituency, but, as well as the issues in particular parts of Greenock that I have mentioned, we have some rural areas. What does the issue that we are discussing mean for constituencies such as mine, which have rural and agriculture businesses that cannot enjoy efficient broadband speeds and cannot simply relocate? I know that the Scottish Government is committed to making Scotland a world-class digital nation. We are already ahead of our European peers on superfast broadband coverage, take-up and average speeds. However, I am concerned for local businesses in my constituency that are part of the 3.8 per cent that do not have superfast broadband.
To answer Mr Carson’s question, the SNP Government is picking up the slack after a lack of investment by previous Scottish Administrations. The UK Conservative Government has been no better, as its contribution to the R100 programme stands at a miserly 3 per cent of the total investment. I therefore have a wee message for Mr Carson: he should talk to his colleagues in Westminster and get them to up their game and put in more money so that not only his constituency but mine can have a better result in terms of the economy.
I welcome the debate, which allows us to focus on an area of crucial importance to Scotland’s economic future. We have heard from other members about some of the prospects for the growth of the digital economy in Scotland. That potential is significant, which is why it is right that we are giving the tech sector our attention today.
In its existing position, the growth value added by head for Scotland’s tech sector is some 60 per cent higher than that for the economy as a whole. The tech sector is already making a disproportionate and effective contribution. Digital industries employ highly skilled professionals, with the added benefit of a market that has a global reach. We only need look at some of the Scottish success stories to see what can be achieved.
However, there are undoubtedly still opportunities to build on our existing strengths and create a digital economy for the future. The enterprise and skills agencies have highlighted a number of areas of potential expansion, but a common thread is that each of those will require investment—and not simply financial investment—to lay the groundwork for future success. I am speaking not just about small-scale interventions, however welcome they may be individually, but about all levels of government taking a serious look at how we create the foundations for growth and expansion in the years and decades to come. I implore the Scottish Government and its agencies to work closely with industry and other Governments at local and UK level to support the change that we need to see.
Later this week, the Parliament will discuss the report on Scotland’s economic performance from the Economy, Energy and Fair Work Committee—a committee that I sit on. I raise that because a number of the report’s conclusions are relevant to how we look at support for particular sectors and businesses.
Investment is key to this. The member seems to suggest that the Scottish Government is about to deliver on commitments that it has made and repeated again and again. As somebody who represents the Highlands and Islands, I can say that the picture created by members on the benches over there is very different from the picture in my area.
I particularly highlight the committee’s work around regional growth. The jobs that technology can support are often not geographically tied in the way that the industries of the past were. Where the conditions are right, the tech sector can be an engine of growth, providing and supporting local economic hubs in regions such as mine. The next silicon glen could be based in the Highlands or in one of our island communities. We could have a connectivity coast in Moray. I have not trademarked that, so the minister is welcome to suggest it to Highlands and Islands Enterprise—or not, as the case may be. That is achievable if Government is willing to work collaboratively with existing local organisations such as colleges and universities.
However, other key elements need to be in place. I have spoken at some length about the connectivity problems that my region faces, which, unfortunately, are stark. The Highlands and Islands region contains the majority of the worst-performing areas for broadband download speeds in the entire UK. In our previous debate about digital inclusion, I pointed to a number of those cases and the problems that have presented themselves in my region for some time. It is unfortunately a blunt fact that, for much of the rural Highlands and Islands, digital exclusion rather than inclusion is the norm. If the technology sector is to be the driver of regional growth rather than of deepening regional inequality, those barriers will have to be broken down and those many years of exclusion reversed.
A skilled workforce is also essential. I will be generous to ministers and say that a number of positive examples and projects have been demonstrated in recent years, many of them led or supported by the private sector. A problem, however, is in learning the lessons from those projects and scaling them up to expand their reach.
We are also, disappointingly, in a position where more than half of our population is at a distance from the tech sector. We have spoken previously about the gender pay gap in the sector, which remains stubborn. Others have highlighted that although women comprise just under half of the general workforce, they only account for under a fifth of employees in tech roles. Not only are opportunities being lost, so too are the skills and abilities of many of Scotland’s people.
I welcome the additional routes into STEM learning that have been offered by foundation and graduate-level apprenticeships. With foundation apprenticeships, in particular, there is a real chance to provide the proper job-based introduction into such sectors that can serve a young person well throughout their career.
Again, there is work to be done. On several occasions, I have raised with the minister’s colleague the priority that must be given to ensuring that the range of foundation apprenticeship frameworks are accessible throughout Scotland’s council areas and regions. I sincerely hope that those steps are being taken, and taken quickly.
Another element is the continuing gender gap in STEM subject choices and training. The detail does not need repeating, but it is clear that the gap at the very least necessitates our taking a better approach to careers guidance and having greater connections between schools, employers, colleges and universities at an early stage.
Even today, the skills gap diminishes our ability to grow the sector. Figures that were acquired by Skills Development Scotland demonstrate that 82 per cent of employers in digital industries struggle to recruit people with the technical skills and expertise that are needed by their businesses. About two thirds of employers have also reported the difficulty of finding skilled staff as a barrier to expansion. That strikes me as one of our most significant obstacles to success. The glint of light is that we are having the debate today, in Government time, and that the research and analysis is available through the work of the enterprise and skills agencies, in particular. Appreciating problems might be the first step towards addressing them, but, as with connectivity, the response can often still be slow.
As we look with a keener focus on innovation and productivity in our economy, we must surely recognise that the sector can be a key component in delivering in those areas. However, there needs to be real and sustained ambition if we are to create the conditions for our digital industries to thrive, particularly outside the central belt.
A lot of good points have been made in the debate. In particular, Daniel Johnson’s points were well made.
One of the things that we should be careful of is that, although there are major challenges in terms of the number of jobs that will be lost, the McKinsey report, which Daniel Johnson referred to, indicated that the net impact, if we seize the opportunities, could be more jobs, better jobs and better-paid jobs. The real challenge for all members across the chamber, the Scottish Government, the private sector and the training and enterprise agencies lies in how we ensure that we not only participate in the digital revolution but exploit the opportunities to the maximum.
One of the mistakes that we could make is to look at the digital sector as one industry. It is not one industry; it is made up of a number of industries. I want to pinpoint three particular industries in which there are huge opportunities for us in Scotland. One of those three, which has already been mentioned, is the games industry. It is headquartered, in effect, in Dundee—when I say headquartered in Dundee, I mean that, in many respects, the global headquarters of the games industry, not just the Scottish headquarters, are in Dundee.
The leading entrepreneur in the games industry, in Scotland and internationally, is Chris van der Kuyl, who made an interesting observation earlier this year. He said that, if we exploit the opportunities in the games industry, and if we invest enough in the games industry in Scotland, we could end up employing as many people as worked in the North Sea oil and gas industry at its peak—that would be more than 100,000 jobs in the games industry alone. The Government should sit down with Chris van der Kuyl and put together a plan to make that ambition happen, because such jobs are exciting and well paid, the number of them is growing and the sector is growing globally. There are huge career opportunities and huge payments through the spin-out to the rest of the economy.
The second sector within the digital framework is health and social care. Last week, we had the first-class announcement, jointly from the health service and the Scottish Government health directorate, along with the University of Glasgow, about using artificial intelligence in the health service. Scotland is again ahead of the game, but we need to stay ahead of the game. The industry has shown the amount of money that we could save in the health service by investing heavily in artificial intelligence.
In principle, if we develop the artificial intelligence tools that are available, we can have personalised digital medicine such that, in a few years’ time, the health service will be able to predict what diseases individuals are likely to develop before the symptoms show up. The saving for the health service and, more important, the impact on patients could be revolutionary. I therefore ask the minister and Jeane Freeman to get together to develop a hugely ambitious strategy that focuses not just on healthcare but on social care.
The third area in which we have a presence and could do a lot more is in the industry to tackle cybercrime. Cybercrime is a major challenge for businesses and Governments around the world. Fighting cybercrime commands huge budgets in the States, Canada, the UK, Australia and round the world. There is an opportunity to develop the talents that are required to effectively fight cybercrime worldwide. The people who sit in Glasgow in established companies that fight cybercrime work in a global industry. The services that they provide remotely from Glasgow are counted in our export figures. The opportunities are huge.
We can learn a lesson from the high-tech hotspots in America and the triple helix in Norway, which bring together in each growth sector the public sector—the Government and councils—with private sector firms that are already operating and with academia. Scotland already brings together those three sectors in the life sciences and, in effect, we do it in parts of the renewable energy sector. We now need to do it in games technology, in health and social care, in tackling cybercrime and in each digital sector that has massive global opportunities.
I am not allowed to take an intervention; that is an opportunity that we will need to miss.
Of all the industries that are growing in Scotland, the digital industries have the greatest global opportunity. Let us forget the petty party politics about what month next year R100 will be finished, and let us think big, act big and do that together.
That is called, “Let’s do it”—it is always a pleasure to follow my esteemed colleague Mr Neil.
I welcome the opportunity to contribute to this debate on developing Scotland’s digital industries for our economic future. I thank my colleague the minister for bringing forward a debate that provides us with the opportunity to talk about the investment that the Government has delivered in digital infrastructure and the role that it will surely play in our economic policy.
I will begin with that investment, because some of the numbers and actions that are involved are truly impressive. The Scottish Government launched the first Scotland-wide internet of things network last month, as part of a £6 million project. The new network will provide a wireless sensor network for applications and services to collect data from devices and send that data without the need for 3G, 4G or wi-fi. That will support businesses to develop new and innovative applications and change the way in which they work.
The network will also give all businesses the ability to monitor the efficiency and productivity of their assets and equipment, to enable the scheduling of maintenance and improve production. As an example of innovative practice, IOT Scotland could support the wider use of smart bins that wirelessly inform local authorities when they require to be emptied. Would not that be a good thing? That would ensure the best use of bin lorries and help to reduce carbon emissions. Similarly, the network could monitor office environments to lower costs by saving energy while reducing the carbon footprints of buildings.
Such technological investment delivers more than just intelligent working; it can and does have the potential to change the way that we work, especially, as I have outlined, in respect of local authority functions and working smarter. That extends far beyond local authorities, of course. The SNP group in the Parliament wants as many people and businesses as possible to benefit from the transformative potential that the internet of things offers. That is complemented by our most recent programme for government. In the year ahead, we will develop and deliver a range of activities across Scotland to inspire and enthuse enterprises of all sizes along with public bodies and our communities about what that technology can achieve. That is a welcome priority as we move forward with our digital industries and developing for our economic future.
This is, of course, absolutely about our economic future, as the digital economy is set to be the fastest-growing sector in Scotland by 2024. That means that we must all recognise that the impact of the digital revolution is no longer confined to technology companies but affects all sectors, as increasing types of business are harnessing the benefits of technology to drive innovation and increase competitiveness. I want to repeat that: increasing types of business are harnessing the benefits of technology to drive innovation and increase competitiveness.
Finlay Carson’s Government—I do not call it the UK Government; I call it the English Government—has wasted so much money and caused so much misery to people over the years, but he has the cheek to stand up and talk about the Scottish Government. The Scottish Government is doing far better than his Government has ever done in its puff.
As members will note from a previous contribution on the digital economy, I have been assisting a local company that wishes to see wi-fi installed on lamp posts and to have the lamp posts powered by renewable energy. Such innovative thinking and technology are essential as our industries develop for the future and contribute to the economy. I am delighted to note that various agencies in the SNP Government now support that company to pursue its ideas and make them a reality for communities in Scotland. I hope that that is particularly the case for the remote and rural areas that I often hear about in the Rural Economy and Connectivity Committee.
There can be no doubt that our digital and technology sector is on the up, and its contribution cannot be overstated. To put the scale of that sector in perspective, in 2015 it contributed billions of pounds to the Scottish economy and thousands of people were employed as tech professionals across all sectors. That is a significant and welcome investment, as Mr Neil said, and thousands more jobs could be created. The news that that investment is only set to grow even higher is testament to the support that the sector enjoys from business, the public and the Government.
With the growth in the sector, of course, the digital revolution continues to pick up pace and creates unprecedented demand for skills by employers across all sectors. Indeed, the Government’s economic action plan sets out a number of new and existing actions that will work together to build a strong, vibrant and diverse economy.
I see that my time has run out. Thank you very much, Presiding Officer.
As the debate has highlighted, the automation and digitisation of the workplace is not some distant, faraway prospect. Technology is transforming almost every aspect of our lives, and it is doing so now. As Daniel Johnson stressed, the impact of that digital revolution is not consigned simply to technology companies; every field and sector is increasingly seeking to harness the benefits of technology. Businesses are making use of digital innovation to expand, to improve efficiency and competitiveness and to drive innovation. Our schools and other educational institutions are utilising technology to improve learning and access to education. As Alex Neil said, the NHS is using new technology more and more to improve services, with predictive healthcare analytics facilitating a more preventative approach. It is impossible to overstate the impact that digitisation has had and will have on our jobs, our economy, our services and our lives. However, with the opportunities of what some describe as the fourth industrial revolution come risks and threats if we do not ensure that the benefits of digitisation are realised for all.
A few weeks ago in the Parliament we discussed digital inclusion, and we highlighted the importance of ensuring that groups throughout society have equal digital access. At present, rural communities, those on the lowest incomes, people with physical or mental health conditions, older people and women all suffer because of digital exclusion that mirrors the wider social and economic inequalities that James Kelly spoke about. If we do not make digital inclusion a priority, digitisation will not only continue but will entrench those inequalities.
Investing in our digital capabilities is not only essential to our long-term economic prosperity. Done properly, it is an opportunity to address injustice and inequalities; to create good, well-paid jobs with targeted investment in rural and deprived areas; to help to close the gender pay gap by encouraging more women into STEM jobs; and to give young people who do not want to go to university better career options—for example, by developing foundation and modern apprenticeship schemes.
If we take a business-as-usual approach, those who are left behind will increasingly be unable to access essential services. They will not only be unable to access the job opportunities that changing technology can bring; they will be impacted negatively by that change. Job losses that are caused by automation disproportionately affect those in lower-paid jobs. As James Kelly highlighted, those who are affected, or who are likely to be affected, must have alternative opportunities. We can provide those opportunities by properly investing in adult learning and by supporting employers and those in the labour market to embrace retraining and upskilling. Tackling that growing digital skills gap will also mean truly embedding digital skills development in our schools, right through to further and higher education.
If we are serious about inclusive growth, we need to address the fundamental regional and social inequalities that exist with regard to digital infrastructure. How can we expect businesses in Orkney to take full advantage of the opportunities created by digitisation when superfast broadband coverage is as low as 65 per cent in that area? As we go forward, lessons must be learned from the roll-out of the previous Scottish Government fibre broadband programme.
Instead of rural Scotland always having to play catch-up, how about giving those communities a competitive advantage for once? I will give the minister one example of how we could achieve that in South Scotland. Sitting on the desks of the UK and Scottish Governments is a borderlands growth deal proposal from Dumfries and Galloway Council, Scottish Borders Council and the three furthest north English local authorities. At present, fewer than a third of the people who live and do business in the borderlands area have access to superfast broadband connectivity, and they can access average download speeds of just 8 to 10Mbps.
A key component of the borderlands growth deal is the aim of breaking down that digital divide through the digital borderlands plan. That plan seeks investment to complete the roll-out of superfast broadband to the properties that do not yet have it, to extend 4G coverage further into remote areas and, crucially, to develop transformational hyperfast digital infrastructure in key settlements and employment sites, enabling speeds of 1Gbps. In addition, the plan includes proposals to pilot emergent 5G technology and develop digital skills in the borderlands—an area that suffers a chronic shortage of such skills.
Government funding for that type of outside-in approach, which prioritises rural areas for future investment, would give communities that are currently disadvantaged, such as those of the borderlands, a technological and economic advantage that they have previously been denied. Support for the borderlands growth deal would represent digital inclusion in action. It would help to deliver the inclusive growth that the Government talks about but that is far out of reach for too many of our rural communities.
Delivering the benefits of the digital economy for all will require a comprehensive approach, from schools to the workplace. It will also take strategic leadership. The authors of the report, “Automatic … For the people? How Scotland can harness the technologies of the Fourth Industrial Revolution to increase economic and social prosperity”, recommended:
“A Scottish Commission on the Fourth Industrial Revolution, including policymakers, industry, workers, academics, citizens and young people, should be established to recommend a strategy and actions for government”.
I support that recommendation. It is crucial that key stakeholders are brought together and, more important, that a strategy is developed that delivers for everyone and leaves no one behind. That is why the Labour amendment unashamedly highlights digital democracy as well as the principle of fair work and the role of trade unions in developing the strategy.
Technology enables more efficient and effective methods of producing and delivering existing and new products and services. It enables work in our society to become less about time and more about output, which should release workers to enjoy and participate more in family and community life.
The challenge for us all is not only to deliver growth in the digital economy but to tackle digital exclusion, break down barriers to access and opportunity and ensure that working people benefit from growth. To coin a phrase, we need a fourth industrial revolution for the many, not the few.
We will vote for the Scottish Government’s motion at decision time. We also lodged an amendment to highlight the significant opportunities for Scotland’s digital economy that are available through the UK industrial strategy. I will come back to that.
The minister opened the debate by emphasising—rightly—the importance of the digital economy and by providing an update on initiatives in that regard, including the digital growth fund and digital boost. We welcome those initiatives.
However, Scotland still faces challenges that must be addressed if we are to achieve the objectives of increasing productivity and building Scotland’s reputation as an innovative nation. I will consider how we might best address those challenges by approaching them through the framework of the Scottish Government’s economic policy of inclusive growth, internationalisation, investment and innovation.
On inclusive growth, the Scottish Government needs to do much more to ensure that the benefits and opportunities of digital are available to all. Ofcom has reported that the level of internet use is significantly lower in Scotland than it is in the rest of the UK. Some 23 per cent of Scottish households do not have access to the internet and 21 per cent of the population do not have basic digital skills.
Finlay Carson, Jamie Halcro Johnston and Colin Smyth said that limited digital access is of particular concern in rural areas. According to Audit Scotland, 370,000 households in Scotland still lack superfast internet speeds, and the issue is expected to be resolved for fewer than half of those households by the Scottish Government’s original 2021 deadline. As Mike Rumbles said, that is glacial progress, indeed. It is clear from the data that the Scottish Government needs to do much more if it is to meet its original targets and prevent hundreds of thousands of people across Scotland from being digitally excluded.
On investment, the recent report “Automatic … For the people? How Scotland can harness the technologies of the Fourth Industrial Revolution to increase economic and social prosperity” highlighted concern about the increasing digital skills gap that is emerging in schools, colleges, apprenticeships and universities. James Kelly, Patrick Harvie, Daniel Johnson and other members mentioned that.
The issue reflects the position after 11 years of SNP Government. Since 2008, the number of maths teachers has declined by 15 per cent, the number of science teachers has declined by 12 per cent and the number of computer science teachers is down by nearly a quarter. There has also been a decline in the number of college places and apprenticeships that are dedicated to science and digital subjects. If we are to equip Scotland’s workforce for a digital future, we need to address that underinvestment or the workforce of the future will not be prepared to capitalise on the digital opportunities.
On internationalisation, we face a critical shortage of digital support in the business environment. Nora Senior, the chair of the Strategic Board for Enterprise and Skills, told the Economy, Jobs and Fair Work Committee that only 9 per cent of businesses in Scotland have embedded digital in their business operations compared with 43 per cent of businesses in competitor countries. The digital gap presents a massive challenge if we are to increase productivity, and it presents a massive challenge for companies that are looking to increase their global trade and exports.
The global export market and international trade are increasingly dominated by online commerce and digital platforms. I saw that at first hand earlier this year during a trade mission to Hong Kong and China. I met a number of trading companies whose business models for import and export are now predominantly online. That means that they trade largely with other businesses that will use only e-commerce and digital platforms. Scottish businesses will lose out on massive trading opportunities that are available in the global market if we do not address that digital gap.
That is obviously going to be subject to the negotiation, but the precursor is to have business in Scotland digital ready. That is my point—there is no specialist public agency in Scotland that is dedicated to the establishment of e-commerce and digital platforms for business and international trade.
I might in a second. I need to make some progress.
In order to address that digital gap, we are calling for the establishment of a dedicated institute of e-commerce and specialist support agency for Scotland that would help to move large and small businesses online in order to take advantage of global opportunities in e-commerce. The policy has gained significant support in the business community and I look forward to hearing the minister’s response to that initiative.
In the crucial area of innovation, the Scottish Council for Development and Industry has called for Scotland to actively participate in the UK industrial strategy. That is reflected in our amendment, which calls on the Scottish Government to work more closely with the UK Government to deliver the real benefits of the industrial strategy to Scotland. In recent years, Innovate UK has invested £2.5 billion in innovative businesses across the UK and the British Business Bank has helped to unlock £10 billion of new finance for business across the country. By actively participating in the UK industrial strategy, Scottish business can tap into innovative digital markets across the UK and into UK-wide research and development and financing opportunities.
In this area, as in many others, Scotland’s business will be significantly better off if we fully capitalise on the benefits of being part of the fifth largest economy in the world. I support the amendment in Finlay Carson’s name.
I thank members for their contributions to this interesting and valuable debate. It is fair to say that the digital economy is of paramount importance to Scotland and its people. That view is shared by the majority of members in the chamber.
There were some highlights in the speeches. The common theme running through them was that members actually engaged with the motion. I take on board the comments that were made by Opposition members, and stress, once again, that I believe that the digital strategy that we have set out is the correct one. However, we are open to ideas and, as the first minister with explicit responsibility for the digital economy, I am open to the ideas of Opposition members when it comes to dealing with the thorny issues that are before us. I would like to talk about those issues.
The first issue that was raised by James Kelly, which was reiterated by Colin Smyth, concerned the importance of digital inclusion and digital participation. It is critically important to acknowledge that, during debates, this chamber can often feel like an echo chamber when it comes to recognising the challenges that are faced by people, particularly those who are disadvantaged by poverty or other aspects regarding digital engagement.
We know that digital has the potential to be inclusive. We have to be intentional about that. We have invested £1.5 million in the digital participation charter fund, which has supported 169 local projects across Scotland to enable more than 20,000 people to gain or improve essential digital skills. The digital participation charter has secured commitment from nearly 600 public, private and third sector organisations to build on those digital skills. I am also working with social housing providers to ensure that there are affordable internet solutions for older people, for people with disabilities and for hard- to-reach single people.
I will pass on that question to the Cabinet Secretary for Transport, Infrastructure and Connectivity, who is responsible for the roll-out. Today’s debate is about the digital economy; although connectivity is a critical aspect of that, there are complex issues that it would serve us all well to engage with.
Gordon Lindhurst made the good point that infrastructure without skills would not get us the progress that we need. He started to quote from the DEB survey, and I will quote some of the stats: 34 per cent of businesses are now doing something to address the skills issue, which is up from 26 per cent in 2014, and 48 per cent of businesses stated that they were well equipped with the skills but that they recognised that there were gaps. We recognise that, with regard to the pace of change that Daniel Johnson outlined, there is a role to support businesses to meet that skills gap.
Patrick Harvie and others spoke about the need for rights, the need to ensure that we have the ethics in place, and the need for us to develop, with Governments across the world, the legal framework that we require as technology continues to emerge. At the beginning of the debate, I referred to the five rights campaign that we support with Young Scot to ensure that young people in particular know their online rights: to remove; to know who, what, why and for what purposes they are sharing their data; to s afety and support; to informed and conscious use of online technology; and to digital literacy.
With regard to the right to know how a person’s data is being used, does the minister acknowledge that the general data protection regulation’s attempt to address that, although well meaning, has resulted in the vast majority of us simply clicking “yes”, “yes”, “yes”, “accept”, “accept”, “accept”, in response to a blizzard of requests? That is not meaningful consent to anything that is provided in that way.
I agree with Patrick Harvie that we want all citizens to feel confident that their personal data is being shared responsibly to create better and more responsive services. However, in order to do that, they need to understand what their data is being used for and to feel empowered to engage and agree or disagree.
Daniel Johnson’s speech was one of the most perceptive about the challenges and opportunities that we face. He spoke about the perception that automation has the potential to destroy jobs. We need to be intentional that digital includes more of the population. I said at the beginning of the debate that we need about 12,800 new entrants to the tech sector just to stand still. That is an opportunity to train, reskill and upskill our current workforce and an opportunity to ensure that we have skills that will never be replaced by machinery—particularly the emotional and soft skills that will continue to be needed. Daniel Johnson spoke about an ecosystem with the universities, whether it is driven by city deals or by local authorities working in partnership with Government, to ensure that universities know what skills are required and put in place the training that is needed. That ecosystem is particularly obvious in a city such as Edinburgh.
Lastly, Daniel Johnson spoke about the investment that is needed in SMEs, which Alex Neil touched on with regard to training. The Scottish Government has funded CodeClan, which is the first industry-led digital skills academy, with just over £3 million of investment to date. It offers students an intensive four-month training programme with direct access to employers, so that businesses—wherever they are, whether in the Highlands or one of our cities—get the skills that they need.
I have less than 60 seconds left.
Industry outlines the skills that they need and we ensure that they have them in an intensive way.
There are other ways in which we are supporting businesses, particularly around cyberresilience. My colleague Derek Mackay launched the cyberresilience economic opportunity action plan, which provides voucher schemes to SMEs to ensure that they have the cyberresilience that they need. In addition, the digital boost programme and the digital voucher scheme help us to target our investment in SMEs to ensure that they have the skills that they need, that we in Scotland lead on the digital revolution and that countries around the world look to Scotland to see what is being done on the partnership between the public, private and third sectors to take advantage of the new opportunities that come with the digital economy.