Part Three – The Digital Revolution (Part One)

Economic Unit

The Digital Revolution: Connected, Secure, and Dynamic

Foreword – Lord Hague of Richmond

It has been 18 months since OpenAI launched ChatGPT-3.5, triggering a global race to develop and deploy artificial intelligence.

This technology has unleashed a rapid wave of transformation across the world — enabling businesses to redesign their models, empower their employees, and boost productivity. Yet it has also empowered cybercriminals to carry out more sophisticated and intelligent attacks.

In this new age of boundless opportunities and risks, businesses that adopt technology swiftly will thrive, while those that move too slowly — or too arrogantly — will share the fate of Kodak, Blockbuster, and MySpace: relics of an era that failed to adapt.

But this global race extends beyond business. The economic benefits of technological leadership are matched by the geopolitical risks of falling behind. Supporting British companies in embracing AI and defending themselves against AI-driven cyber threats must therefore remain a top government priority.

The UK government has so far recognized its role well.
The Department for Science, Innovation and Technology (DSIT) launched the Flexible AI Upskilling Fund to support SMEs in training their staff to use AI.
Ministers also established the AI Opportunities Forum, bringing together business leaders to explore ways to expand AI use in the private sector.

Furthermore, the Prime Minister founded the AI Safety Institute, focusing on mitigating the risks of AI — including psychological manipulation and cybersecurity threats. However, the scope of this mission is vast, and much more must be done in the next parliamentary term.

This timely report identifies areas where the next government should act — including direct support for companies adopting AI through training and webinars, accelerating digital connectivity (broadband and wireless), and reforming cybersecurity insurance regulations.

These proposals can help maintain the UK’s leadership in responsible AI adoption and deserve careful attention from all political parties as they draft their government programs. Only with sustained commitment in these areas can the UK and its businesses stay competitive in the accelerating global race.

Chair’s Introduction – Priya Guha MBE

The UK is an exceptional place to start, grow, and scale a business. It boasts a rich history of innovation and a world-class academic research base that underpins that progress.

The digital revolution offers unprecedented opportunities for companies to transform in ways unimaginable even a decade ago. Yet it also poses a significant risk to Britain’s small business economy — the risk of falling behind in the nation’s digital future and missing the productivity gains it brings.

Businesses need confidence in the UK’s digital infrastructure, knowing it is reliable and resilient. This report sets out a clear set of policy priorities to support businesses during this exciting era.

In addressing the challenges of digital transformation, we focused on four interlinked areas:
Broadband, wireless communication, cybersecurity, and artificial intelligence.
These four pillars are the foundation of business success and agility — both now and in the future. Without reliable broadband and secure connectivity, companies cannot unlock the full potential of AI.

While there has been notable progress in broadband expansion, the UK still lags behind many countries.
Today, broadband is a critical utility — as essential as water and electricity. No business, regardless of size or sector, can operate effectively without it.
We must therefore improve access, speed, and infrastructure planning to secure a digitally connected and prosperous future.