Barclays Corporate Communications | Barclays



House of Commons Business, Innovation and Skills Select CommitteeDigital Economy inquiry – response from Barclays Bank PLCAbout BarclaysBarclays is an international financial services provider engaged in personal, corporate and investment banking, credit cards and wealth management with an extensive presence in Europe, the Americas, Africa and Asia. Barclays’ purpose is to help people achieve their ambitions – in the right way.With 325 years of history and expertise in banking, Barclays operates in over 50 countries and employs over 130,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide.For further information about Barclays, please visit our website .SummaryBarclays welcomes the opportunity to respond to the Committee’s call for evidence. The digital economy is a global one, with Google, Facebook and other major, large scale and well-resourced technology businesses competing and innovating at pace. It has also been one of the UK’s success stories in recent years and we believe the country is well placed to continue developing a strong and vibrant sector that drives growth right across the economy, not least because of the UK’s strength in financial services. However, there are some significant challenges on the medium- to long-term horizon which the Government, regulators, law enforcement, industry and other players should look to tackle together, and sooner rather than later.Key amongst these is the need to take a holistic approach to digital. Given its importance for maintaining the UK’s international competitiveness, support for the development of transformative, digital technologies should be rooted in the culture of public and private sector organisations alike. There is much the Government can do to set the agenda, provide a forum for experts to collaborate and raise the profile of new innovations by vocally supporting industry’s work, and it can also accelerate adoption of new tech by rolling it out through Government departments and other organisations. The introduction of contactless payment technology by Transport for London is a case in point as take up of contactless merchant acquiring terminals in the surrounding local economy immediately ballooned as a consequence. Equally important will be the other side of the innovation equation though – providing the legal and regulatory environment in which it can thrive. For example, the EU Commission has launched a series of initiatives under the banner of achieving a Digital Single Market (such as completion of the General Data Protection Regulation), but there are many other policy files which could have a major impact on digital innovation such as Capital Markets Union, the soon to be published Retail Financial Services Green Paper and others more focused on non-financial service industries. Establishing guiding principles for addressing privacy, security and trust concerns, putting consumers at the heart of innovation and guaranteeing a level playing field for all participants which then informs all future policy and regulatory design both in the EU and UK will be crucial for encouraging innovation. Similarly, regulators can nurture innovation by providing a safe environment for the private sector to experiment with new innovations without immediately incurring normal regulatory consequences, supporting the development of industry standards (which are crucial for allowing interoperability of digital technologies) and by fundamentally regulating in a manner which supports digital processes, not just physical ones. Regulators in the UK have a good record of aiding innovation by engaging proactively, identifying barriers to growth and innovation, feeding back concerns to those driving innovation as technologies are being developed and allowing the development of industry-led solutions. Using ex ante regulation to deliver specific and targeted outcomes in complex and dynamic markets has proven to be a less successful model in the past and we would advise caution before seeking to adopt this approach to stimulating growth in digital services.Finally, there is a considerable challenge around digital skills and education. On the one hand, consumers need to be digitally savvy so they can take advantage of the benefits digital offers. On the other, we need to ensure industry has access to people with the required skills for the economy of the future, whether it is through UK schools and universities producing tech trained graduates or by allowing labour with specialist skills fast-tracked access to the country. QuestionsQ1: What are the major barriers to UK business success in the digital economy? What?steps could?the Government take to help businesses to overcome these barriers?We discuss a number of specific issues we believe would create opportunities for success in the digital economy in response to later questions, but from the perspective of removing blockers for the financial services industry Barclays’ recent response to the FCA’s call for input regarding regulatory barriers to innovation in digital and mobile solutions raised points that are equally applicable here.In summary, we called for the regulator to create an optimal environment for facilitating the accelerated roll out of new innovation, in particular ways to meet Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements that would enhance the roll-out of existing services and encourage the development of wholly new ones (see our response to Question 5 for further details). In addition, we would encourage the Government to look more broadly at the structure of regulation and the scope of regulators. Given customers’ increasing use of the internet and other digital delivery channels to engage with financial services, there is a risk of confusion over regulatory responsibilities, with the FCA, Ofcom, the ICO and the CMA all potentially accountable for addressing consumer protection matters. The debate on an appropriate structure and approach to regulation in a converged digital communications sector has stalled since 2003 with the implementation of the Communications Act, and although the UK Regulators Network is working to address cross-regulator issues, there is at least a good argument for the Government to take a more holistic approach given the vast number of previously discrete sectors which are now core components of the digital economy.We would also like greater flexibility in using digital as a communication channel to reflect consumer preferences. Banking online and through smartphones has become the number one way in which customers choose to interact with their bank, and they expect us to reflect their own channel preferences in our engagement with them. We consider it essential that firms are able to adapt their communication approach with confidence.More generally, we would like to see regulation evolve in a manner which allows industry space to innovate and, when regulatory change is required, time to plan strategically for it. Short implementation deadlines and last minute modifications stifle industry innovation by demanding more resource allocation and denying firms the latitude to find creative and innovative solutions. Good dialogue between regulators and industry, Governments and non-financial services regulators at a domestic and European level (and often international level for digital developments) is vital for achieving this.We would very much welcome the Government supporting these suggestions.?Q2: How effective are UK financial markets in supporting the digital economy? What actions could the Government take to improve their effectiveness??The UK is witnessing a rapidly increasing amount of inward investment aimed at creating the successful companies of tomorrow. Businesses are maturing a lot more quickly with financing rounds occurring at shorter intervals.On the debt side, Barclays’ focus is on delivering a seamless ‘micro to IPO’ service. We support fast-growth potential tech companies perhaps most directly through a tailored debt finance product available through our partnership with the European Investment Fund (EIF) and delivered locally by specialist relationship directors. Over the next two years up to ?100 million will be directed to businesses where we are most likely to find transformative growth.We have also collaborated with Google to launch a unique lending programme that invests in fast-growing UK small and medium enterprises (SMEs) in the technology, media and telecoms (TMT) sector. This deal makes the Google for Work (GfW) suite of work productivity applications available to eligible companies through low-interest financing, enabling them to finance strategic initiatives, hire additional staff and invest in future expansion.But, more often than not, firms in all sectors at the start-up, micro- and small business stages in particular need risk finance, which is why it is important to address the business angel and venture capital (VC) finance equity gap in the UK.The average time period from conception of an idea to commercialisation and revenue generation in high innovation sectors is found by several studies to be around eight years, though with significant variation (for example, a lower cost, nimbler development model associated with software development may be considerably shorter) and during which time running costs and development expenses must be met, with the probability of that innovation finding a market decreasing the longer the innovation takes to commercialise. That is why the structure of the finance is a more important question for these innovators. They require finance which does not need interest repayments since they lack revenue to meet them. Since the financer will not have the certainty of a repayment amortisation schedule (or indeed repayment at all), they will expect to have access to the potential upside if the innovation succeeds. As such, the funding requirements for these businesses must be met primarily through equity investment, rather than debt. Whilst VC liquidity is improving in the UK and Europe more generally, and notably in the tech sector specifically, the data show that there is still a lack of this finance. The SME Finance Monitor reports that only one per cent of UK SMEs use equity from external sources, compared to the six per cent of businesses which several studies (including the well regarded 2009 NESTA report) estimate as being high growth, innovative or subject to significant expansion.It is worth noting that the most important capital injection a business receives is the capital with which it launches, or receives in its earliest stages. Given the high failure rates of SMEs –only half of businesses make it to five years – having sufficient cash in the bank to absorb a misstep or a failure is crucial. Equity capital can be thought of as providing a sufficient level of protection to allow a business to achieve an ‘escape velocity’ of scale, cash and growth where failures are no longer existentially threatening to a business.Beyond this level, later stage business angel finance and VC is subject in the UK to generous taxation supports, which have been demonstrated to offer good value to the tax payer. However, the smaller market for equity means that creating efficient, large scale and expert clusters requires a market at a continent wide scale. That is why our view is that the goal should be to address barriers in the EU Single Market to create a genuinely cross border equity finance market where clusters of specialist investors develop in areas where there is a matching business focus, and we welcome Government support to accomplish this.In tech investment, the Silicon Valley market is often held up as an efficient system for channelling finance to start-ups, with anecdotes of venture capitalists spending just hours with an entrepreneur before committing to investing. Whilst these are clearly extreme cases, strong VC market liquidity is only generated by investors having a deep understanding of the technology underpinning a business and the market in which it will be operating or seeking to disrupt.The lack of a single European market for SMEs, however, hinders this expertise from developing, by requiring VC investors to diversify their portfolio outside of their expert sectors, and by effectively capping the size of individual funds and investments. A single market might see several sector specific clusters develop where the continent’s entrepreneurs gravitate to centres of excellence to raise funds. It would be rational, for example, for the continent’s bio-technology start-ups to go to Cambridge/Oxford/London ‘Golden Triangle’ to raise funding. Part of the reason for this lack of a single market is a failure of EU member states to achieve harmonisation of the requirements of the VC schemes, so that it is very difficult to raise your first round of funding in one country, and then a second and third wherever that sector’s dominant financial centre is found.Equally, there are comparatively few physical facilities to encourage low cost, collaborative incubation at the very earliest stage, which is one of the reasons why we established Barclays Rise, a global community that connects start-ups, corporates and experts around the world to co-create?the future of financial services, and beyond. Rise consists of physical sites located in the world’s top innovation ecosystems as well as a digital platform that enables the members of the Rise community to connect, collaborate and scale. Rise currently operates sites in London, Manchester and New York, with more sites launching in Europe, Asia and Africa in 2016. By bringing together expertise and resources from Barclays and partnering with a curated range of global experts, we believe we can create an ideal environment to help businesses grow.In order to amplify Rise’s impact, Barclays has also partnered with TechStars to establish our Barclays Accelerator programme at Rise London, located in Whitechapel at the heart of East London’s flourishing FinTech scene. The Barclays Accelerator is a three month, intensive course designed to deliver breakthrough innovations by mentoring FinTech entrepreneurs, developing their business ideas and making them a more investable proposition for VC or indeed a partner for Barclays. 21 start-ups have already gone through the programme in London and more than 80 per cent of these have achieved their self-defined funding goals within months of ‘graduating’, whilst seven out of 10 companies from the most recent London Accelerator cohort are exploring opportunities with Barclays. The Accelerator programme has also now been rolled out to Rise New York and will shortly be launched at new Rise sites in Cape Town and Tel Aviv.We believe this model – of establishing an eco-system of start-ups in a particular sector, having large corporates mentor and share knowledge with them as well as connecting them to other experts in the field, and ultimately looking to bring start-ups into their supply chain or introduce them to relevant investors – is working to support the scaling up of FinTech firms in East London, and there is no reason why it could not be equally effective in other digital sectors in areas of the country more suited to cyber security, digital manufacturing or digital media, for example. Government can play a key role in encouraging these digital clusters to spring up by connecting stakeholders and working with them to foster a supportive environment for entrepreneurship to take root.Q3: What lessons can be learned from the Government’s support of tech start-ups and other measures targeted at the digital economy??How is this developing around the regions and nations of the United Kingdom??The Government has undertaken a series of initiatives aimed at ensuring the UK is the number one destination for tech start-ups, ranging from funding for research and development (R&D) to investment in digital infrastructure. We welcome in particular the creation of Tech City and Tech North, which we believe are important for retaining focus on and advocating the development of the tech industry across the country. Tech is a diverse sector, however, and as indicated by our response to Question 2 our view is that an understanding of the local business and community needs in each region will be required. A one-size-fits-all approach to growing the digital economy will not deliver the greatest impact so it is important to identify dynamic locations with the right infrastructure, skills and knowledge base for creating a successful cluster of companies with particular tech specialisms. For example, the Bournemouth and Poole area is one of the UK’s leading creative and digital centres. According to Tech City it witnessed a 200 per cent rise in the number of tech companies incorporating in the area between 2010 and 2013, with a particular focus on digital advertising and marketing, e-commerce, games development and publishing. Many of the skilled workers required for these roles are the product of the local higher education institutions, Bournemouth University and the Arts University Bournemouth, which excel in related academic disciplines.The right conditions for these companies to thrive in were also shaped by a range of other factors of course, including fast and accessible broadband, good access to finance and strong backing for digital entrepreneurship from the local community, in particular the council (Bournemouth Borough Council is the current Digital Council of the Year according to this year’s Digital Leaders 100 awards), Local Enterprise Partnership (LEP) and wider private sector who have supported hackathons, an open data portal, fast and free Wifi in the town centre and an annual digital conference. But it is not just entrepreneurs and start-ups that we should look to support. Barclays recognises that it is equally important to develop deep, strategic partnerships with existing companies and organisations to help them keep pace with advances in the digital world. In Salford, we have recently developed a partnership with the local authority that goes far beyond the traditional banking relationship and integrates Barclays into the fabric of their organisation by digitising their operations and backing wider community initiatives in the area. For example, a large proportion of council employees do not have access to a desktop computer, which can make communication with them a challenge for leadership teams. To help overcome this problem and as part of our arrangement with Salford City Council, we have white-labelled and rolled out a Barclays app to their members of staff that grants them secure access to council systems via a personal smartphone or tablet. We are also exploring how we can extend our cloud capabilities to the council so that they can establish a ‘resident’s well-being portal’ containing medical and educational records, and have delivered a large number of digital and wider skills initiatives to the local community amongst other things.In summary, 'digital' is a burgeoning industry in the UK and one the Government has done much to champion in recent years. We would encourage a focus on developing clusters of particular tech and digital excellence, however – in collaboration with the private sector, local Government and academic institutions – and in locations with identifiable labour market and infrastructure competitive advantages. As digital breaks down traditional business and sector barriers, it is becoming increasingly important that relationships between organisations that fundamentally understand each other’s strategic aims and values are formed. Q4: Does the?UK’s?Intellectual Property regulatory regime provide effective protection for the?digital economy and sufficient scope for innovation and competition?We believe the UKIPO and the UK’s IP legislative and enforcement frameworks allow for the proper protection of innovation, whether arising from the digital market sector or elsewhere. However while protection can be achieved reasonably effectively in the UK, an understanding of the value that may be derived from such protection is significantly less accessible, particularly in the digital economy.Data published by the Government on 31 March 2014 showed UK investment in intellectual property and ‘intangible’ assets had increased by 5% to ?137.5 billion, outstripping investment in tangible assets, such as buildings and machinery, which fell to ?89.8 billion. The figures indicate the importance of the digital economy in the UK and signal the growing value UK businesses attach to knowledge, innovation and creativity. In this context, there have been a number of initiatives examining the efficacy of intellectual property in a modern economy, both at the European and local levels. The 2014 ‘Final Report from the Expert Group on Intellectual Property Valuation’ published by the European Commission identified a number of shortcomings following a detailed examination of various sectors, including financial services. In its response to the ‘Banking on IP’ report commissioned by the UKIPO, the Government itself recognised a material shortfall in the ability of UK businesses to protect and exploit their intellectual property assets and that IP was ‘a missed opportunity with millions of pounds worth of business assets whose value was not being leveraged...’We agree with the Government’s assessment and believe there is a significant impact on the digital economy in particular. We believe that there is a key role for Government to play in exploring how IP as a property asset might be valued, including the feasibility of establishing a recognised professional qualification and a standardised framework for valuing intellectual property. Further, we would support a Government focus on improving access to IP value by examining IP-relevant initiatives, in particular IP trading platforms and the provision of transparent IP transactional and ownership data. Finally, we believe the Government is well positioned to examine the suggestion that the complexity of IP from an accounting perspective leads to problems in its reporting and as a result has the potential to create an incomplete impression of a company’s financial health. Should such a problem exist, it may be exaggerated in the digital economy where companies are more likely to base their performance on intellectual property.The nature of the digital market makes it easy for a company to release its product or service across several jurisdictions at once. Therefore we believe that any UK initiative to develop a more effective IP regulatory framework should take account of the global environment. For example, various countries including China and Singapore already operate Government backed schemes that purport to give companies a means to better leverage the value of their intellectual property and secure finance against it. We believe, however, that the UK is in a position to lead the development of this area globally, given the world class reputation of its independent legal system and regulated professional institutions.?Q5: What actions could the Government take to foster the development of potentially disruptive technologies??Are?further?safeguards warranted to help existing businesses adapt to the impact of these technologies on their traditional business models?The financial services industry is taking the opportunities presented by digital innovation to improve services to their customers, widen participation in the digital economy and boost growth potential. We believe that Government must look at the digital agenda holistically, however, so financial services and other industries can deliver to their full potential - from addressing privacy and security issues to supporting a range of transformative inventions. We have identified five areas which we believe should be priorities for accelerating digital progress:Big DataAs a bank, we are continuously evolving our business model to ensure that we can keep up with the demands of our customers and the threats of competition from new entrants. One of the ways we can do this is by utilising data to generate opportunities that add real value to our customers’ lives. Data generation is set to increase exponentially in future, spurred on by cloud services and the Internet of Things. 90 per cent of data in existence today has been created in just the last two years in fact according to the tech consultancy firm IBM. Interpreting this data smartly - or using ‘Big Data’ analytics - could disrupt industries and bring significant benefits to businesses, individuals and society alike. With the right controls and protections in place, the banking industry may be able to, for example, develop better risk profiling systems and predictive tools for making instant loan decisions, or reward customers with ways to save money based on their behaviour or our buying power. Equally, the wider financial services industry (and FinTech in particular) may be able to benefit from accessing and utilising in clever ways data held by banks. The Government recently commissioned an industry-led working group, which Barclays is playing a key role in, to look at how bank data can be shared securely and in a limited way with third party institutions, enabling them to offer innovative new products and services to consumers and small businesses.These are just a few examples; there are a plethora of others which could effectively bring the personalised service currently experienced only by the very wealthy to the mass-market bank customer. And we see no reason why the approach the banking industry is taking cannot be taken forward in many other sectors too with similar expectations of improved consumer outcomes.The most important thing will be giving customers’ choice about what information organisations hold for them; what they do with that information; and how they allow others to work with them to provide customers with value. To be clear, Barclays does not see Big Data as an opportunity to market or cross-sell products to customers, or to sell lists of customers to other companies.? Big Data is all about patterns or trends in aggregated data that cannot be linked to an individual or business.We recently replied to a House of Commons Science and Technology Committee inquiry into Big Data where we identified the following ways in which Government could help promote this transformative development:Firstly, there is a severe lack of trained data scientists in the UK, such that UK-based businesses currently have to attract talent from, and base some of their centres of excellence in, other locations. Increasing the number of graduates and postgraduates studying data science, artificial intelligence and machine learning would give the UK a competitive advantage and should in our view be a priority.Secondly, at a different level of education, it is important that people have a better understanding of how data is used and how they should ensure that their privacy is protected. Consumers should also be given the ability to digitally control their data instead of using a paper trail and relying on the Data Protection Act as it exists today. Holding data is a high cost burden for large corporations, especially sensitive financial data or personally identifiable information, so this could lower the cost on industry and provide the consumer with greater confidence.Thirdly, alongside education we need to improve the level of regulation of data such that ‘bank standard’ becomes the universal standard for all industries. The UK Government is already engaged in deliberations in Europe about the proposed new General Data Protection Regulation (GDPR) which may be the appropriate vehicle for bringing about such changes (although we share the UK Government’s concerns about the current wording of the proposal).Finally, Big Data’s most significant cost after people is energy. Data centres require a substantial amount of it for processing and cooling, such that locations with low energy costs are usually favoured over others. The UK could capture a huge opportunity and gain significant international prominence if it were to invest in the infrastructure (including low-carbon energy) required that allowed it to become the data hub for the new world economy, much as it is the global centre for finance today. BlockchainBlockchain first came to public light as the digital protocol that underpins Bitcoin’s technology. It allows real time, peer-to-peer transaction settlement of assets or information in a way which is assured (ie an unhackable version of the truth) and provides a historical record of all counterparties. Essentially it is a spreadsheet that is publically visible and accessible and can confirm the uniqueness of a digital transaction.Many experts in the field believe blockchain has the potential to be as disruptive as the Internet wave of the late 90s, but the technology faces some substantial challenges. In particular, its origins with Bitcoin have associated it with stories of fraud and other illegal activity which colours people’s perceptions of its value. Blockchain’s conceivable uses, however, range from protection of critical national infrastructure; transparency of supply chains; disbursements of social welfare, aid and remittances; and real time taxation.The Barclays response to date has been to understand how the technology works and experiment to learn how we can build solutions that radically reduce the cost of our infrastructure, reduce operational risk and provide bank accounts to companies employing blockchain. We are a founder member of the Distributed Ledger Group (a consortium of global banks for blockchain technology) and the Whitechapel Think Tank and advocacy group for blockchain.?In addition we are working to help the Bank of England understand how their digital sterling goal could be realised, and the Government Office of Science on how blockchain tech can benefit the ernment can play (and is playing) a major role in driving development of the technology by demonstrating that it recognises its potential; providing a forum for experts to convene and share knowledge; working with industry to understand how blockchain could be effectively regulated; working with regulators to ensure there is a safe environment for the private sector to test innovative new blockchain products and services; and vocally supporting start-up success stories. All of these things will help to establish the UK as open for blockchain business and a world leader in setting international blockchain standards.Identity Assurance (IdA)IdA is a digital solution that allows individuals to prove they are who they say they are and validate their right to receive a service in a smoother, more efficient way. Privacy and information security are key to making this technology successful. Banks have built their reputations on keeping their customers’ money safe, and now we must do the same for the currency of the 21st century – personal information. That is why Barclays is well placed to become a provider of trusted transactions between citizens and Government departments through GOV.UK Verify. Soon, once the customer has set up a digital identity with Barclays, the next time they need to e.g. renew their driver’s license or complete a tax self-assessment, they will be able to log-on easily and securely with the Government via a single digital log-on.Barclays believes that rapid adoption of digital identities will create opportunities for reducing the friction experienced by many users of existing public and private services. In the banking world, for example, a key difficulty is in identifying and verifying applicants electronically, which means that some are directed into a bank branch to complete Know Your Customer (KYC) checks – a process they may well have completed before with other providers. This discourages take up of services, particularly by young people and consumers from foreign countries with less well developed UK credit histories, and is out of kilter with what the average person is increasingly coming to expect from a customer experience perspective.The Government has led the way by developing GOV.UK Verify and we would welcome them rolling this digital identity gateway out to all Government departments at scale and as quickly as possible. We would also like to see GOV.UK Verify identities used to access private sector services, such as opening a bank account, in the not too distant future.To facilitate the use of IdA there will need to be some amendments to existing UK regulation and, at the same time, the UK will need to ensure the alignment of emerging EU regulation such as the GDPR. Standardisation and consistency of technology as well as legal and regulatory frameworks will be key to enabling cross-border digital trade using IdA.Cyber securityAs businesses across all sectors embrace digital technology huge opportunities in the form of increased efficiencies, greater intelligence, lower costs and access to new markets present themselves, but it also brings significant new risks which it is critical we prepare for. Chief amongst these is the threat of cyber-attacks, which are growing in number and sophistication. 74 per cent of small businesses and 90 per cent of large businesses suffered a cyber breach in the past year according to the Government, whilst a series of high profile breaches in the US and UK have hit the political agenda.Whether it is customer data, intellectual property, or simply company reputation, all firms – but particularly banks – have a lot on the line. Cyber security is therefore becoming as relevant as real world security and an increasingly fundamental aspect of all firms’ business strategies. Firms should expect cyber-attacks and ensure they are as prepared as they can be, aiming to achieve the Government’s ‘Cyber Essentials’ standard as an absolute minimum. They should make sure everyone in their organisation is fully aware of cyber security best practice and understands the need for good governance and controls. Larger firms should also have an effective response unit to manage cyber-attacks when they occur. For those firms that do not have these measures in place, Government can play a useful role in providing the wake-up call they require. Businesses should also work with the Government and each other to best protect their industry as a whole from cyber threats. For banking, we believe it is important that firms cooperate and share information on cyber-attacks to alert counterparts and prevent vulnerability of the wider system. The newly created Cyber Defence Alliance is a helpful step forward and should provide welcome collaboration here. Equally, it is worth noting that the cyber security industry in the UK is prospering with TechUK estimating that it is now worth around ?17 billion. Government should be commended for taking a number of steps to support growth in the sector, such as funding the newly established cyber security pre-accelerator. We hope the pre-accelerator provides the catalyst for the ‘clustering effect’ with start-ups locating nearby and bringing innovative new cyber security products to market. Much needed research links with universities have also been established and Government funding has been provided to create links with cyber security companies, too. Barclays welcomes the acknowledgment of the importance of R&D and the need to get ahead of hackers, rather than always reacting to intrusions after they happen. Maker spacesIn the early 2000s the Massachusetts Institute of Technology Centre for Bits and Atoms (MIT CBA) established the first of their ‘fab labs’ (fabrication laboratories) to explore how computer science can advance invention. They equipped a number of workshop spaces with tools such as 3-D printing machines and laser cutters and allowed the wider community access to see what they would create.Today, the ‘maker space’ movement has spread across the world, the cost of computer-controlled design and manufacture machinery has dropped dramatically, whilst more advanced software has greatly increased their capabilities. Barclays is of the view that digital manufacturing could be the next wave in the digital revolution as mass automation and local production becomes possible at a rate never been seen before. Prototype development by designers and craftsmen could be achievable in a matter of days rather than the more usual 10 – 12 weeks, with no need for products to be transported from the Far East where they are typically made today.The opportunities and threats to new and existing businesses and consumers of these new techniques are, of course, huge, which is why Barclays wants to be at the forefront of supporting our customers and local communities in this new world. Later this year we will be establishing the first of a number of UK based maker spaces in Bournemouth in partnership with the local authority and universities. The site will be equipped with digital fabrication machinery and available to the public at large to use, including for free one day a week in keeping with the Fab Foundation ethos.We would of course welcome Government support for this type of initiative, perhaps by encouraging and empowering more local governments to look at how they can be involved in the maker space movement through e.g. making under-utilised, publicly-owned buildings available for fab labs and partnering with local business and academic institutions to kit them out.Q6: What?actions could the Government take to ensure the availability of a workforce?with the skills to?support businesses in the digital economy?In the last few years the UK Government has introduced a number of measures designed to improve digital literacy including the establishment of the National College for Digital Skills and Coding and the publication of a digital inclusion strategy. Whilst digital knowledge and skills has been integrated across the education system there is still a clear need for basic access and skills for those who haven’t benefited from regular exposure to technology.Local authorities are in a key position to drive up digital literacy generally and awareness of the opportunities that the digital economy can offer. Barclays has been working with a?number of them, offering access to our c. 15,000 trained Digital Eagles and the use of our free education tool, Digital Driving Licence (digitaldrivinglicence.barclays.co.uk), to give their colleagues a baseline level of knowledge on digital topics that builds their confidence and awareness of digital business. Several other private sector and academic organisations also have digital skills initiatives freely available to the public, such as the Open University’s FutureLearn platform, which the Government could help raise the profile of and connect to education authorities and Government departments. Similarly, the regulator can play a role as facilitator. We note that Ofcom has responsibilities to promote media literacy, which it currently seeks to fulfil through publishing consumer research. We would encourage the Committee to explore with Government and with Ofcom how this responsibility could be supported beyond simply the undertaking of consumer research. Moreover, we would encourage a more forward looking interpretation of this responsibility to incorporate digital skills and literacy.Turning back to the formal education system, coding has become a key component of the revamped computing curriculum, but it would be good for the Government to understand whether the changes have been effective in building knowledge and skillsets which lead to students progressing to study computer science at degree level and/or are transferable to the workplace. From a resourcing perspective we are seeing declining numbers of computer science graduates overall and very low female participation, so it may be that incentives are required to make this degree (and other key disciplines related to STEM subjects and required for tomorrow’s economy) more attractive and prevent it from becoming a scarce skill. It would also seem that universities are struggling to keep degree courses current as technology is evolving so rapidly in this area.Also, Government could ensure that incentives for public and private sector providers of apprenticeships with a digital focus are in place. As part of the Trailblazer initiative, for example, Barclays designed an apprenticeship course (which includes options for two degree level qualifications) and contributed a third of the costs towards the delivery of the programme. The Trailblazer model could be readily modified to prioritise apprenticeships with a digital focus rather than apprenticeships generically.Lastly, LEPs could be encouraged to prioritise and channel capital funding towards regional initiatives which will improve digital literacy and ultimately help create and sustain digital jobs.If you have any questions at all please do not hesitate to contact me on 020 7116 7094 or tom.burton@.Tom BurtonGovernment RelationsBarclays Bank PLC ................
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