As the Covid pandemic rolls on, those in the UK are beginning to see signs of hope – both in terms of the economy and the virus.
Although the digital and technology industry has fared relatively well throughout the lockdown compared to many other markets, any movement towards the end of the pandemic is still likely to have a significant positive effect as the wider economy improves.
Most significantly, Prime Minister Boris Johnson has announced the UK’s plan, commonly referred to as the covid “roadmap”, out of lockdown. Here’s a summary:
- Step 1: 8 March – schools return, 29 March – the return of the rule of six for outdoor gatherings.
- Step 2: no earlier than 12 April – non-essential retail will reopen, as well as gyms, outdoor attractions, hospitality and self-contained accommodation, all with limits.
- Step 3: no earlier than 17 May – most social gathering rules for outside removed, indoor hospitality and large-scale sporting events return, with some limits.
- Step 4: no earlier than 21 June – the plan is for all legal limits on social contact to be removed.
Roadmap implications
The immediate and most obvious effect for the digital and technology industries is that all of these measures – which effectively amount to the slow end of the pandemic in the UK – are expected to boost the economy.
As previously mentioned, the digital economy has performed well during lockdown because many aspects of life have moved almost entirely online – from shopping and ordering food to work. There are several elements to that consumer shift which helped the digital and technology markets. First, purely digital companies like online-only retailers, food delivery services or streaming providers saw a boost in business as consumers effectively had no other choice.
Second, more “traditional” companies quickly had to pivot in any way they could. Figures from the Confederation of British Industry, for example, show that despite big hits in the retail sector, internet sales growth hit record highs.
Third, almost all office workers had to work remotely, giving productivity and communications providers – and in turn their own infrastructure providers – a surge of demand.
But there was still a national economic turndown. It’s well publicised that the UK economy shrank by 9.9% in 2020 – the biggest contraction in more than 300 years. Although shielded from the worst of the economic effects, there was simply less business and money going around, meaning tech and digital inevitably suffered to some extent.
But looking longer-term, many of the changes – such as an accelerated move towards eCommerce and remote working – are likely to be semi-permanent. That means the tech and digital workforce may doubly benefit when the UK leaves lockdown because the pandemic pushed digitalisation forward by several years – in a trend that will continue beyond the end of the pandemic – and on top of that, the economy more generally will improve.
Job figures
Another notable recent development is the latest release of labour market figures by the Office for National Statistics. Analysis of the figures carried out by The Register show that the number of UK tech jobs is now higher than they were even before the pandemic; the sector in fact now employs more people than ever before.
The Office for National Statistics, which defines the industry as “information and communication”, said 1.58 million worked in tech in the UK in the last quarter of 2020.
What’s more, recent research by techUK and CWJobs found that almost half of firms are looking for talent to fill tech roles. 45% of professionals asked said their company is looking for tech talent, the research said.
All this suggests tech and digital remain in a strong position and that now is a good time to hire.
Return to work
One of the biggest practical issues for businesses is whether financial support schemes such as furlough will continue. The government will clarify this in its budget in early March, though official advice states that it will “carefully tailor the level of support to individuals and businesses to reflect the change in circumstances”.
At the time of writing, it’s not certain exactly how tailored that support will be – but it’s possible that digital and technology companies may be last in line if support is being offered based on need, given how well they have done so far during the pandemic.
Remote work will continue to be an issue, too. It looks possible that workers will be allowed to return to the office en masse come 21 June, but it’s another question whether they will want to.
Technology companies have led the charge with allowing long-term or even permanent remote working policies, and the end of lockdown may cause a crunch point where employers are forced to consider whether they really want to allow their staff to stay remote.
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