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DIGITAL TRANSFORMATION IS TO KEY TO SCOTLAND FUTURE; ROUND TABLE: DIGITAL TECHNOLOGY.

Byline: KEN SYMON

in association with QHow can digital transformation across the economy boost Scotland's economic output? Svea Miesch: There is a lot of research from the US and the UK that shows that local authority spend on IT is one of the drivers of productivity.

This spend will make companies more efficient saving time and effort to do certain tasks and it will also streamline processes in certain sectors, so there is a lot of potential. Jim Hamill: The link between effective use of digital technology, productivity, national competitiveness, jobs and employment is now pretty firmly established, so I don't think that's up for debate, to be quite honest.

The most technology advanced nations also tend to be the most successful in terms of productivity, growth and competitiveness. The concern that I have is based on my experience.

Scotland as a nation is falling significantly behind in the digital race. I'm in the fortunate position of being able to visit a lot of other nations, and what I see happening there is frightening in terms of how slow the progress is we are making in Scotland, and in the UK.

Matt Lancashire: We already are in the fourth industrial revolution as we speak, there's no turning back from that. The world has changed in how people buy goods and services, that's changed completely.

But there's a fear in society that there'll be fewer jobs, less employment, fewer opportunities, which potentially could put more pressure on public services in the long-term to support individuals who may not be working. It's quite critical that we find a balance there. There's no question digital's here to stay, it increases productivity, it increases profit, but at the same time, the outcome of it can be quite concerning.

David McNeill: There is a need in Scotland do develop more hightech businesses like Skyscanner or Iomart. But we are a nation of small businesses and how do we get them to change and adapt to the modern world. I was surprised by the lack of digital capability in the tourism industry given how reliant the consumers are now on choice, being online.

How do we bring along those businesses that are massively important to the Scottish economy? How do they adapt? And that's partly about skills and about culture change. Lorraine McMillan: I come from a technology background and I am very clear that technology is one of the biggest drivers of productivity. What we've seen in digital up to now has been the rise of the disruptive companies. The new companies have done something very, very different, and in Scotland we've got some of the most fantastic digital technology in our universities, in our start-ups, and we've seen that driving productivity, driving growth. We're at the stage now in digital that it's really moving www.insider.co.uk into the mainstream, it's not about the digital companies, it's about how mainstream companies use digital to really make massive productivity changes.

The change over the next few years will be that massive adoption of digital by mainstream companies worldwide, not just in Scotland, and that applies to the public sector as well. The public sector is under a financial constraint and, from my perspective, digital gives us the opportunity to become more efficient and to improve outcomes at the same time.

Mark Dames: When I first started looking at this a few years ago, the figures coming out of the EU Commission, were really clear, that up to 50 per cent of productivity growth would come from the skilled exploitation of digital technology, and I stress 'skilled exploitation', because it's not sufficient just to have the infrastructure, it's how you use the technology.

Over the past ten years, productivity has not kept in line with projections pre-economic downturn, and one of the issues undoubtedly is investment in digital and investment in skills that underpin digital.

Alexander Holt: Our mission at CivTech is about driving daring and innovation in the public sector and so make people's lives better. From the public sector's perspective, opening up our problems to entrepreneurial talent creates an economic springboard. The public sector can be an exciting first customer, particularly in the fast paced digital sphere. To quote a poster that one of our companies read on the NYC subway, which sums up neatly the potential of digital: "We live in a remarkable time, when the promise of digital technology to genuinely improve human lives has accelerated in unimaginable waysconnectivity is so intertwined we take it for granted, turning wonders into daily expectations. There is an optimism that is exciting and awe inspiring." I love this optimism and sense of potential - what we as a society have to ensure is that no-one gets leftbehind.

QIs Scotland's digital strategy ambitious enough? Where are we against other countries? MD: I commend the Scottish Government's digital strategy published in March. But whilst all the words were there, the real question is whether there's a route map, a blueprint to actually achieve it within the requisite timescale. In terms of ambition, I absolutely commend it, but let's underpin it with a deliverable route map.

LMc: It is an ambitious strategy. Local government are part of that strategy, and we've got a role in delivering. It's got to be what digital can do to improve the lives of Scotland, make us a better nation, not just improve public services, but increase GDP.

The challenge in any digital strategy is that the minute you write it, you're almost out of date. The ambition has to be clear, but you need to be constantly changing the route map, because even within a year, your route map changes. In local government, we haven't gone for 200 page strategies, we've gone for fairly short, almost PowerPoint based strategies that we keep updating because of the rate of change of technology.

DMc: There's a real risk that nice words don't necessarily translate to clear actions. We're at a stage where GP surgeries, as an example, are just beginning to implement text messaging technology to communicate with patients, and that's resulted in less wasted appointments. But that's a 30, 40 year-old technology that's just at the stage of implementing, so we're not necessarily going to be cutting edge.

How do we change legacy systems in the public sector? How do businesses change their legacy areas of working? Because it's not easy to develop entire new business models, ways of working whilst still maintaining businesses as usual. ML: There is a problem when strategies like that don't dovetail with other Scottish Government strategies so we abandon them. It needs to dovetail with other strategies.

When the radio came out, it took 38 years to get 50 million users. When TV came out, it took 13 years to get 50 million users. When the iPod came out, it took four years to get 50 million users. When Twitter came out, it took nine months. When Snapchat came out, it took three months.

The pace of change of digital, how we use it as a society, is instant now. That needs to be taken into account when looking at what digital means to an organisation and how to implement it. JH: We really are in a position now where the why of digital has been won, and we really need to start looking at the how, how we change.

Is Scotland's digital ambition ambitious enough? No, I don't think it is, I don't think there is any ambition there. The vision in the most recent strategy document is to realise Scotland's full potential in the digital world; I have no idea what that means. In terms of KPIs, the target is that Scotland will be positioned in the top quartile of world nations, and a quick calculation with 196 countries in the world, we would be happy with a 49th position. The fear that I've got is that digital in Scotland, in the UK, is becoming a sideshow because of bits, namely Brexit, immigration and Trump.

PANEL MEMBERS Ken Symon editor, Scottish Business Insider Svea Miesch research and policy manager, Scotland IS Dr Jim Hamill director, Future Digital Leaders Matt Lancashire director of policy SCDI David McNeill digital director, Scottish Council for Voluntary Organisations Lorraine McMillan chief executive, East Renfrewshire Council Mark Dames head of policy and public affairs, BT Scotland Alexander Holt head, The CivTech Programme Special thanks to the Technology Innovation Centre at the University of Strathclyde for hosting the event.

I'm concerned that as the pace of digital change accelerates, we in Scotland have given up the chase. We're on the cusp of something great, and in comparison with what I'm seeing in other countries, I just don't see Scotland's progress being fast enough.

SM: In terms of infrastructure, the goal that's currently in the digital strategy is 30 megabit per second by 2021. We know that this is really important and there's difficulties in parts of Scotland to achieve this. But it's already out of date now because the European Commission has a goal of 100 megabit per second by I think 2025. So that's already three times higher than what we want to achieve four years before that. So even though it's going to be really challenging and difficult, we need to be more ambitious.

ML: If you're an SME in a rural area there are plenty of reasons why growth is difficult - getting the right talent, transport routes and so on and I wouldn't like to accuse all rural SMEs of not growing because of digital there are many other factors which need to be taken into account. LMc: The days of having an organisational strategy and on the side, a digital strategy, are gone. There'll be specific elements, foundations that you need like broadband but we need to get to the stage where every strategy in the public sector, every policy, has digital embedded in it. It's not an add on, they have to be one.

I know in my own organisation, one of the tests for all our strategies is how the benefits of digital technology are maximised, and I think that has to be true for the whole of the public sector.

If I was back in my economic development days, if I was working with businesses, I wouldn't be saying to them, have you got a digital strategy, I would be saying, is digital in everything that you do? JH: I think the challenge facing us in Scotland is not a digital challenge -digital is, if you like, the easy part of this -it's changing organisational mindset, culture and structure to become more fast moving, agile, responsive types of organisations. We need to redesign organisations for the digital era, because our organisational structures are no longer fit for purpose.

DMc: There's a danger that people will get caught up with new technologies as important drivers in themselves. As soon as you see something that says AI, machine learning and blockchain -that that is the future and we must get onto that bandwagon. That's actually a distraction from the real change. There's a danger that we focus on technologies, and not actually the fundamental organisational change that needs to take place.

LMc: There's a fascinating piece of work by change guru John Kotter that changed my perception of how we need to change in a digital world. What he's suggesting is in big organisations, we need two organisational structures. You will still need your hierarchy. If you're putting in a new finance system, you don't leave it to a small group to go and do what they want, there's some things you will absolutely need a structure for. But on top of that you need this very loose collaborative structure where people can build ideas, take them up, exploit them, test them out and grow them. The trick is getting those two things happening at the same time. ML: You can't be the digital number one country in the world if you're not going to invest in the research and development that allows you to be that champion of the world. You can't reduce your R and D and at the same time expect to have a digital strategy that works and empowers people and changes the economy for the better.

AH: The more public, private, third sectors, academia, investment and citizen groups can work together, the much stronger the fabric of our society.

Policymakers need to have short to medium term secondments in the areas where they are effecting change.

Equally, you should also have business coming into government to understand what it's like to be there.

You should have academia coming out of their research universes and actually coming to see what life is like for small business. And the third sector is hugely important, often regarded as the R and D arm for the public sector. It's about getting this revolving door of talent coming from different experiences, so that these professional silos are broken.

We are absolutely the right size of country to effect this meaningful collaboration - it's just a question of how badly we want to change.

QHow do we develop the skills for the digital age? We're talking about transformation, is there a clear focus in developing our workforces to achieve that? MD: We've been running a series of tech literacy programmes across the UK that get young people enthused to ask the question, are they just passive consumers of the technology or are they actively engaged, in terms of their ability to use those skills within the workplace, to forge new applications, to develop new innovations.

We're finding that there's a difference between young people's attachment to technology and their actual grasp of how it works. There's a danger in making an assumption that because young people are used to engaging with screens, somehow that will translate productively into the workplace. There's a lot of work to be done to understand that disconnect. JH: The evidence is overwhelming that there is a digital skills shortage. I think significant efforts have been made in the last few years to try and redress that, Scottish Government's put in PS6m; Google, Barclays Bank and so on are now running free digital skills training programmes. I'm not suggesting that we've fully addressed that issue, but we are addressing it.

If we're going to stop using the term digital strategy and start using organisation strategy for the digital era, then we need to take a wider view of digital skills. One of the big mistakes in Scotland that we have made is that we equate digital skills with technology, coding, software, and I'm not in any way undermining the importance of that, but we need to train people for the digital age, and that might be more in terms of how you manage data and so on.

ML: There's some evidence that suggested that someone coming into the workforce in the next five or ten years will have 15 jobs in their lifetime which sounds bonkers and very different from what happens right now.

No successful business can afford a massive turnover of staffand losing all the knowledge and the experience that results but the equivalent of that's going to happen with the massive changeover in technology.

If jobs are changing radically we need a more resilient society than we have. I don't think it's just about "I've got digital skills, so therefore I exist in the business for the next 50 years", it doesn't work like that. It takes resilience to work with new employees, new changes in culture of working, particularly with changing organisations.

All of this needs to start not in college, it needs to start in P1 when the kid walks through the door. It needs to be part of the curriculum wholeheartedly, and at the moment it isn't.

LMc: We need everybody coming out of school with some level of digital skills in the way we need everybody coming out of school with literacy and numeracy, it's absolutely got to be core to the curriculum.

But then you move on to the skills of our existing workforce which I think is a particular challenge for us, because as we move forward, more and more people will need digital skills.

Entry level graduate jobs are the ones that are going to go through a complete change; lawyers, accountants; and I don't think people have really realised that yet. It won't be next year, it won't be the year after, but not long after that we'll start to see quite a change in the graduate market, and we need to start thinking about that now.

QWhat is the leadership need to drive all these things we've talked about, and what are the metrics for measuring that that change is happening? JH: There need to be much greater senior management understanding and education in terms of the impact of emerging technologies on business. I don't think the message has yet got out to the majority of businesses who really don't understand the impact that this technology is having.

Then it's about empowering them to implement successful transformation, and that requires a whole range of skills throughout the organisation. It requires digital leadership vision and commitment, it requires digital change agents throughout the organisation, it needs to be a top down and a bottom up process.

ML: You go to many kinds of business association events where many participants are over 50 talking about digital transformation, when in reality, in ten years' time, they won't be in the workforce. People over 35, 40, will be, and they will be our future leaders making decisions on transformation, and they've got the knowledge and experience beyond the group of people in the room. They are working with that technology now so how do we take that, place it in front of the current leadership and say, how do you move things forward? JH: The challenge is not technology work, the challenge is changing organisations. I'm on record as saying that the Scottish establishment is leading us sleepwalking into a digital tsunami, and you can define Scottish establishment whatever way you want to define it, but I just don't see that vision emerging from our organisations that you would see in some Asian and Middle East countries.

We've been there before in terms of the industrial revolution. I wasn't born then, but I was born 60-odd years ago in Port Glasgow, which was a traditional shipbuilding town where there was something like 25,000 people working in the shipyards, and that's gone. There was a plant in Greenock for a company called IBM which employed 8,000, that's gone. Scotland was at one time called Silicon Glen because of the number of American electronic companies that were here, Honeywell, Motorola, Hewlett Packard etc., most of them, most jobs have gone. What concerns me is we've been there before, but I don't think we've learned the lessons.

We need to start now, and I just don't see this issue even being discussed in Scotland. MD: I'm not saying people are being complacent, that would be completely wrong, but I think since the economic crash and the failure for incomes, household and individual incomes, to rise, people throughout all strata of society have had a real wake up call in terms of the link between productivity, what we produce, and take home pay, it's almost a one on one link, and I think people realise that unless Scotland/the UK becomes more productive, that this may be our lot for the next ten, 20 years, so there's a real wake up call for everybody to be more productive and earn our place in the global economy. |

Our mission at CivTech is about driving daring and innovation in the public sector and so make people's lives better Alexander Holt, The Civtech ProgrammeI think the challenge facing us in Scotland is not a digital challenge it's changing organisational mindset, culture and structureJim Hamill, Future Digital LeadersWe need everybody coming out of school with some level of digital skills in the way we need everybody coming out of school with literacy and numeracy Lorraine McMillan, East Renfrewshire Council
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Title Annotation:News; Teasers
Publication:Insider Monthly
Geographic Code:4EUUK
Date:Mar 9, 2018
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