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What is Local Digital Capital and why is it important?

Local Digital Capital describes the building blocks of strong technology ecosystems. High levels of local digital capital allow for the development of strong clusters that deliver growth and better digital services to communities across the UK.

techUK developed the concept of Local Digital Capital from seven dialogues held over the second half of 2020. These dialogues took place across the four UK nations of Scotland, Wales, Northern Ireland, and England, including four English regions: The North East, West Midlands, Yorkshire and the Humber, and North West.

These dialogues included more than 260 local businesses, local and devolved government officials, local tech sector representatives, and start-ups, to better understand how the tech sector can help the economic recovery across the UK, solve local problems, and ensure that UK wide, national, and local policy is fit for purpose, reflecting local priorities and experiences.

Following on from those conversations, techUK released eight reports – one UK-wide report, and one from each of the devolved nations or regions: the North East, West Midlands, Scotland, Yorkshire and the Humber, North West, Wales, and Northern Ireland. Each report examined the state of Local Digital Capital in that particular nation or region, and how to strengthen each aspect of Local Digital Capital to support a return to growth.

Local Digital Capital is comprised of the eight inputs that make up a local tech ecosystem, that when taken in aggregate, can build, sustain, and grow a local tech ecosystem that enables citizens, companies, and the public sector to interact and work together more effectively, improving both economic and social outcomes.

The eight components of Local Digital Capital

  • Digital Skills: Digital skills range from being able to access basic public services online, to understanding the most advanced quantum computing.
  • Digital Adoption: The adoption of digital tech platforms, primarily software, by businesses (e.g., cloud, CRM, accounting, and team management software) – these tools allow businesses to increase productivity, efficiency, resilience, and agility, and enable future innovation and growth.
  • Data Ecosystems: Access to data and datasets allows governments, firms, and individuals to gain greater insights into local economies and societies. This requires better data collection and analysis to provide insight into the design of public services or new products.
  • Digital Infrastructure: This is about the physical infrastructure that creates the digital world and enables access. Greater speeds and higher levels of access allows more people to access digital tools and services, and weak connectivity and infrastructure can have a severe, highly localised effect.
  • Finance & Investment: The availability of capital and loans is key to ensure that more ideas are funded and can play a key role in boosting the attractiveness of a location for new businesses.
  • Research & Innovation: The funding and structure of investment into long-term innovation – to help new ideas and process improvements develop, as well as build towards long-term assets for the local economy like academic institutions and research facilities.
  • Trade Support: Guidance and information to allow SMEs and other businesses to navigate the complex requirements of exporting products to new markets.
  • Collaboration & Coordination: Effective collaboration and coordination across and between public and private sector bodies is critical to success. This is key to delivering growth objectives and improving all other aspects of Local Digital Capital.
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