The UK government’s approach to economic growth must shift from a sole focus on frontier innovation to enhancing a nationwide technology diffusion system. This shift is essential for enabling businesses to adopt productivity-boosting technologies and stimulate economic recovery. Historically, the success of Britain’s Industrial Revolution stemmed from a network of institutions, incentives, and skills that transformed invention into widespread innovation.
For every inventor like James Watt, there was an entrepreneur like Matthew Boulton, who provided capital and networks to bring new ideas to fruition. As the government grapples with revitalizing growth following a challenging Budget, it must take heed of this historical lesson. Recently, the government reaffirmed its commitment to innovation, announcing investments in AI infrastructure and research as part of its AI Opportunities Plan. While this emphasis on cutting-edge innovation is commendable, it fails to address the needs of the majority of businesses that perceive the adoption of new technologies as high-risk with uncertain returns.
In the latest Global Innovation Index, the UK ranks sixth overall but drops to 37th for “knowledge absorption.” This disparity indicates that innovative ideas are not being effectively disseminated across the economy. Other countries have recognized the importance of technology diffusion and established systems to support it. For instance, Singapore’s SMEs Go Digital initiative and Germany’s Mittelstand-Digital actively assist businesses in integrating new technologies. In contrast, UK investment in the foundational elements of technology diffusion—such as workforce training and organizational development—has halved since the financial crisis.
Adopting new technology can be a daunting task. Identifying, procuring, and integrating the right tools often requires significant time and financial resources, leading to short-term revenue impacts before long-term benefits materialize. A robust diffusion system could alleviate these challenges by simplifying the adoption process for businesses. Currently, UK businesses encounter a fragmented support landscape that lacks the necessary mechanisms for scalability, resulting in a two-tier economy where a few leading firms thrive while many struggle to catch up.
To address this disparity, the UK must modernize its technology diffusion ecosystem, ensuring that all businesses, not just the largest, receive comprehensive support in technology adoption. Leveraging existing assets, particularly the nation’s world-class universities, will be crucial in building this infrastructure. These institutions already play a vital role in local economies and possess the expertise and connections needed to assist thousands of firms.
With appropriate funding and direction, a national network of University Technology Adoption Centres could provide hands-on guidance, training, and peer learning opportunities. This would significantly reduce the complexity and costs associated with technology adoption for smaller businesses. Additionally, the establishment of a digital “CTO-as-a-Service” system would give firms a single point of access for technology assistance.
This system could utilize modern technology to deliver personalized support at the firm level while maintaining scalability across the entire ecosystem. The key components would include a digital CTO platform to streamline support, a business digital identification system to tailor advice, and an AI assistant to enhance the overall capacity of the ecosystem. Together, these elements could transform the current patchwork of initiatives into a cohesive and modern technology diffusion system.
The potential economic impact of upgrading the UK’s technology diffusion system is significant. According to analysis from the Tony Blair Institute, such reforms could add over £6 billion to the UK’s GDP within the current Parliament—a contribution comparable to major government initiatives like planning reforms. This investment not only promises economic growth but could also enhance tax revenue, offsetting much of the associated costs.
Beyond the financial implications, a nationwide diffusion system offers broader societal benefits. By facilitating the spread of new technologies to underserved regions and businesses, it presents a viable path toward more equitable and inclusive prosperity. A well-structured technology diffusion initiative would transform the government’s objective of stimulating growth into a collective national endeavor.
Ultimately, the UK’s future economic prosperity hinges not solely on the innovations it creates but on the effectiveness of its technology dissemination strategies. As the government re-evaluates its growth policies, it must recognize that sharing innovations widely is just as crucial as inventing them.
