The UK has the potential to lead the digital revolution - boosting productivity and our economic power in the process. Some 15 per cent of the nearly 600,000 businesses registered with Companies House in 2014 were digital. By 2030, the UK is set to employ 7.1m people in science-based roles and the digital sector already employs 1.46m people.
But we have a problem. As explored by Sherry Coutu in November, the UK has a great reputation for starting businesses but isn’t good at growing them. Some 150,000 jobs could be created if start-ups reached their potential size by 2034, contributing £225bn towards UK GDP.
So why are we struggling to turn startups into the next Facebook?
Looking at the digital sector, startups face some major challenges as they strive to grow - most often around access to the right data. There is a huge reliance on the use of personal data to accelerate innovation. In order to test products, perhaps a smart healthcare device, startups need access to patient data. But there is a lack of consumer trust in sharing or providing access to this. In a study we commissioned, 60 per cent of the public admit they are uncomfortable sharing personal data.
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In a world where data access will be needed to turn digital startups into scale-ups, this is a huge problem that needs addressing.
A big part of this comes from a lack of communication between businesses and consumers. 79 per cent of consumers believe the main use of personal data is for organisations’ own economic benefit.
Looking at what would encourage them to share data, the majority said they would share information if it was used to improve society. The very reason the public say they would share data is the reason the vast majority of organisations want access to it.
So why is there a problem and why is it hindering our startups? Simply put, consumers don’t trust businesses and this will stop us growing them. This is why open, transparent communication is so vital. It is also why it’s important to let people control their data - for 76 per cent of consumers, the main concern around data sharing is that they have “no control over how data is shared or who with”.
We need to work with industry, technology developers, government and academia to build public trust and create a forum for the controlled sharing of personal data. Digital stakeholders must act now to create this and make it clear to the public that they can control their data but also share it to benefit their own future. Without this, our startups will never reach their potential.
If the community – from entrepreneurs to VCs and government – do not address the issue of data access, the startup community will die. We must continue to act now to stop this from happening.