{"id":24402,"date":"2018-11-07T12:01:52","date_gmt":"2018-11-07T12:01:52","guid":{"rendered":"https:\/\/digileaders.com\/?p=24402"},"modified":"2019-05-08T14:46:33","modified_gmt":"2019-05-08T13:46:33","slug":"whats-the-real-impact-of-a-digital-economy","status":"publish","type":"post","link":"https:\/\/digileaders.com\/whats-the-real-impact-of-a-digital-economy\/","title":{"rendered":"What\u2019s the real impact of a Digital Economy?"},"content":{"rendered":"<p class=\"s4\"><span class=\"s3\">One of the greatest pleasures of my role in Digital Leaders is meeting talented and <\/span><span class=\"s3\">well informed<\/span><span class=\"s3\"> members of the Digital Leaders Community, as I travel up and down the UK. <\/span><\/p>\n<p class=\"s4\"><span class=\"s3\">Recently I have found myself creating a causal relationship between three <\/span><span class=\"s3\">themes echoed\u00a0<\/span><span class=\"s3\">across the regions. These are: increasing digital skill shortages in the regions outside of London; wage inflation in digital jobs; and rising regional housing prices. <\/span><\/p>\n<p class=\"s4\"><span class=\"s5\">T<\/span><span class=\"s3\">hese seem to be linked, but not perhaps as obviously at it might <\/span><span class=\"s5\">appear<\/span><span class=\"s3\">, so I wanted to write this blog to see if you can help me shed more light on this.<\/span><\/p>\n<p class=\"s4\"><span class=\"s3\">The connected elements emerging here, are that a number of economies like Manchester and Belfast (to pick two) are experiencing welcomed and encouraged digital economic booms. Possibly in the short term this is as a result of <\/span><span class=\"s5\">the increasing <\/span><span class=\"s3\">price<\/span><span class=\"s5\"> differential<\/span><span class=\"s3\"> when compared to London making them more compet<\/span><span class=\"s5\">i<\/span><span class=\"s3\">tive when b<\/span><span class=\"s5\">idding for work as national and <\/span><span class=\"s5\">public sector<\/span><span class=\"s5\"> demand goes up. This price differential seems to be linked to lower technology wages in these regions<\/span><span class=\"s3\">.<\/span><\/p>\n<p class=\"s4\"><span class=\"s3\">However, this regional growth is<\/span><span class=\"s5\"> now being held back by<\/span><span class=\"s3\"> a shortage of digital skills that businesses need to take part in the regional \u2018boom\u2019, as too much demand chases too little supply. The natural short-term consequence appears to now be wage inflation. But is this <\/span><span class=\"s3\">a \u00a0simp<\/span><span class=\"s5\">le<\/span> <span class=\"s3\">link and will higher regional wages be sustainable. As new digital businesses start-up in the regional <\/span><span class=\"s3\">economy, they<\/span><span class=\"s3\"> are hiring existing staff from other companies, creating operational problems to e<\/span><span class=\"s5\">xisting businesses<\/span><span class=\"s3\">. <\/span><\/p>\n<p class=\"s4\"><span class=\"s5\">This is further complicated because <\/span><span class=\"s3\">the <\/span><span class=\"s5\">emerging<\/span><span class=\"s3\"> technologies are disruptive to existing tech business models, the most exciting and innovative technologies have the double whammy of not only being the most attractive employers to the local skilled workforce, but the business models they use are themselves pursuing growth <\/span><span class=\"s3\">fuelled<\/span><span class=\"s3\"> by investor funding that is not Profit &amp; Loss driven, but rather \u2018cash-burn\u2019 models requiring lots of talented staff in short time. <\/span><\/p>\n<p class=\"s4\"><span class=\"s3\">Throw in some successful inward investment by the local authority of larger international digital businesses and many companies growing organically in the region find themselves losing staff and are unable to recruit the digital skills they need. <\/span><span class=\"s5\">Their only <\/span><span class=\"s5\">short term<\/span><span class=\"s5\"> option is to raise wages dramatically.<\/span><\/p>\n<p class=\"s4\"><span class=\"s3\">The obvious response for these incumbent businesses then might seem to be to put up their prices to cover wage rises, but this will have to be passed onto costs to clients and reduce the differential in price advantage the region has over London and these higher prices might not work for a local business model built around local demand and pricing. <\/span><\/p>\n<p class=\"s4\"><span class=\"s5\">So is a regional digital boom difficult from incumbent digital businesses, but also great news for technologists with increased demand for their services and wage rises. Well maybe not.<\/span><\/p>\n<p class=\"s4\"><span class=\"s3\">Due to the growth in the digital market, some regions are benefiting <\/span><span class=\"s5\">from<\/span><span class=\"s3\"> an influx of people relocating out of London, attracted to the rising wages and the lifestyle advantages in cities like Manchester and Belfast. A consequence of this, is a hike in housing prices as new arrivals use their greater disposal income. This in turn puts pressure on those with digital skills to locally move jobs themselves to secure the benefits of higher wages to cover these increased costs. <\/span><\/p>\n<p class=\"s4\"><span class=\"s3\">Perhaps ,<\/span><span class=\"s3\"> if the above is true and the relationships I describe hearing about are indeed causal then we can conclude that <\/span><span class=\"s5\">a digital<\/span><span class=\"s3\"> economic boom in a region fails to benefit those incumbent businesses already running locally competitive digital businesses and we will see business failure amongst locally grown tech companies in these regions or their takeover as a consequence.<\/span><\/p>\n<p class=\"s4\"><span class=\"s3\">So <\/span><span class=\"s3\">be careful what you wish for, because there seem to be<\/span> <span class=\"s3\">unintended consequences from a\u00a0<\/span><span class=\"s3\">growing digital economy.<\/span> <span class=\"s3\">A<\/span><span class=\"s3\">m<\/span><span class=\"s3\"> I right in making a causal link between these separate chan<\/span><span class=\"s3\">ges in local regional economies?<\/span><a name=\"_GoBack\"><\/a><span class=\"s3\"> I look forward to your thoughts and evidence.<\/span><\/p>\n<hr \/>\n<p class=\"p1\" style=\"text-align: center;\"><span class=\"btn-container\"><a class=\"btn btn-md btn-primary\" href=\"https:\/\/digileaders.com\/insights\/\">More thought leadership <i class=\"far fa-caret-right\"><\/i><\/a><\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>One of the greatest pleasures of my role in Digital Leaders is meeting talented and well informed members of the Digital Leaders Community, as I travel up and down the UK. Recently I have found myself creating a causal relationship between three themes echoed\u00a0across the [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":24405,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"class_list":["post-24402","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","region-london","region-belfast","region-north-west","region-northern-ireland","topic-digital-skills","topic-smes"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What\u2019s the real impact of a Digital Economy? | Digital Leaders<\/title>\n<meta name=\"description\" content=\"There are increasing digital skill shortages in the regions outside of London; wage inflation in digital jobs; and rising regional housing prices\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/digileaders.com\/whats-the-real-impact-of-a-digital-economy\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What\u2019s the real impact of a Digital Economy?\" \/>\n<meta property=\"og:description\" content=\"There are increasing digital skill shortages in the regions outside of London; wage inflation in digital jobs; and rising regional housing prices\" \/>\n<meta property=\"og:url\" content=\"https:\/\/digileaders.com\/whats-the-real-impact-of-a-digital-economy\/\" \/>\n<meta property=\"og:site_name\" content=\"Digital Leaders\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/digitalleadersprogramme\" \/>\n<meta property=\"article:published_time\" content=\"2018-11-07T12:01:52+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-05-08T13:46:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/digileaders.com\/wp-content\/uploads\/2018\/11\/adult-agency-business-380769-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"6000\" \/>\n\t<meta property=\"og:image:height\" content=\"3368\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"helena.larsen\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"What\u2019s the real impact of a Digital Economy?\" \/>\n<meta name=\"twitter:description\" content=\"There are increasing digital skill shortages in the regions outside of London; wage inflation in digital jobs; and rising regional housing prices\" \/>\n<meta name=\"twitter:creator\" content=\"@DigiLeaders\" \/>\n<meta name=\"twitter:site\" content=\"@DigiLeaders\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"helena.larsen\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/digileaders.com\/whats-the-real-impact-of-a-digital-economy\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/digileaders.com\/whats-the-real-impact-of-a-digital-economy\/\"},\"author\":{\"name\":\"helena.larsen\",\"@id\":\"https:\/\/digileaders.com\/#\/schema\/person\/2da837c2b8c9912d5c8e0c6ba7458c1e\"},\"headline\":\"What\u2019s the real impact of a Digital Economy?\",\"datePublished\":\"2018-11-07T12:01:52+00:00\",\"dateModified\":\"2019-05-08T13:46:33+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/digileaders.com\/whats-the-real-impact-of-a-digital-economy\/\"},\"wordCount\":683,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/digileaders.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/digileaders.com\/whats-the-real-impact-of-a-digital-economy\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/digileaders.com\/wp-content\/uploads\/2018\/11\/adult-agency-business-380769-1.jpg\",\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/digileaders.com\/whats-the-real-impact-of-a-digital-economy\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/digileaders.com\/whats-the-real-impact-of-a-digital-economy\/\",\"url\":\"https:\/\/digileaders.com\/whats-the-real-impact-of-a-digital-economy\/\",\"name\":\"What\u2019s the real impact of a Digital Economy? 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