Tag Archives: UK

Unlocking the value of data key to UK economic growth

The Scottish government has identified data-driven innovation as a key area for potential economic growth, and they plan to invest accordingly. Rachel Aldighieri, MD of the DMA, highlights the need for cross-sector collaboration to discover the true worth of data.

Earlier this month, Theresa May signed the Edinburgh and South East Scotland City Region Deal with Nicola Sturgeon. Along with other cultural and economic developments, the deal seeks to invest in the fintech, tech and AI sectors, and will ring-fence money to develop data storage and analysis centres in the Scottish capital.

Key commitments include £300m for world-leading data innovation centres; a £25m regional skills programme to support improved career opportunities for disadvantaged groups; and £65m of new funding for housing to unlock strategic development sites.

Over recent years, the Scottish Government has regularly issued support for the tech, data and marketing industries, identifying the central belt as a key area for growth. The value of the digital economy in Scotland was estimated to be £4.45 billion in 2014. Data-driven innovation alone has the potential to deliver £20 billion of productivity benefits for the economy over the next five years.

The prize is an innovative, growing economy.

Advertising and marketing are at the heart of the UK economy and play a vital role in driving economic growth. Annual UK exports of advertising services are worth £4.1 bn and every £1 spent on advertising returns £6 to the economy, resulting in £120bn to UK GDP.

The Scottish government’s recent investment should provide a platform for the rest of the UK to build on – a pilot project that will highlight the potential of the data and marketing industries to continue to drive the post-Brexit British economy.

Marketers need training in data-related skills

The publicity of the Edinburgh and South East Scotland City Region Deal should help to put the data and marketing industries on the radar of those making career choices in the future.

However, the industry needs to develop stronger ties with academic institutions to increase awareness about the skills required for a role within the data-driven industries and provide insights into the career prospects that these positions can offer. DMA Talent runs a series of Creative Data Academies around the UK to provide practical learning opportunities for young talent interested in a career in the data and marketing industry. Working with Scottish universities, we’ll be developing this programme with a long term aim of reaching schools and colleges throughout the UK.

As both the Scottish and UK governments have realised, businesses will need to upskill in areas concerned with data and its value to business. The recent ‘Professional skills census 2018’ from the Institute of Direct and Digital Marketing (IDM) highlights ‘data-related skills’ as a key area with skills gaps that need to be addressed. In a post-GDPR era, marketers are held more accountable for their actions, but they must receive relevant training and guidance to better understand their evolving roles – where processing consumer data and interpreting it are now key areas of their job description.

Developing an ethical framework for processing data The DMA’s ‘Data privacy: What the consumer really thinks’ report highlights that 88% of consumers believe transparency is key to increasing trust in how their data is collected and used. The research also revealed an important change in attitudes is underway, with more than half (51%) of the respondents viewing data as essential to the smooth running of the modern economy, up sharply from 38% in 2012.

Ultimately, consumers want more control over their personal information but the industry can do more to increase consumer trust, define best practice, and safeguard data usage. The DMA Code provides a series of core guiding principles to our membership for processing consumer data and it encourages best practice within the marketing and data industries.

We are working with our members to give businesses a better understanding of the values of data and shape the responsible route forward. However, an ethical framework for processing data that extends beyond our industry will be key if the UK economy is to thrive on the opportunities presented by technological advances.

The government’s development of the Centre for Data Ethics and Innovation will go some way to dealing with the ethical issues raised by rapidly-developing technologies such as artificial intelligence (AI).

The Centre for Data Ethics and Innovation will encourage discussion and research into how data and AI are used in terms of governance and regulation, but more investment will be required for the rest of the UK to follow Scotland’s lead in seeking data-driven innovation.

It is only by putting the customer first and embedding an ethical approach to business culture that consumers and organisations alike will be able to take full advantage of the data revolution. If we don’t get the balance right between data privacy and data-driven innovation, personal data may be misused by some businesses as technology advances. Technology often shapes an organisation’s customer engagement strategy, but our research has shown that trust will influence how receptive and likely consumers are to use it. A practical, universal framework is needed but this will require investment and cross-industry collaboration.

The department of Digital, Culture, Media, and Sport (DCMS) works closely with the DMA on championing innovation and evolution in the data and marketing industries, and the DMA welcomes future discussions around how we can develop and implement such a framework.

To propel the discussion forward, the DMA and DMA Scotland will launch a new initiative entitled Value of data.

This work will seek partnerships with government, businesses and educational institutions to develop a consumer-focused mindset within the data and marketing industries.

Led by Chair Firas Khnaisser (Standard Life) and Vice Chair Derek Lennox (Sainsbury’s Bank), Value of data will help businesses to responsibly deliver value to their customers.

The campaign will provide an engaging, navigable roadmap through a challenging ethical and legal landscape to allow innovative and data-led approaches to customer engagement to thrive. And we’ll do it all with a future-focus: nurturing local and young talent.

Ultimately, the Value of data will develop a true appreciation of the worth of data so businesses can build stronger, more profitable relationships with consumers – responsibly, sustainably and ethically.

The DMA are ready to work alongside our membership, the wider marketing industry, and UK Government to make this a reality in the not too distant future.

source: www.thedrum.com

UK – Corporate tax and the digital economy(position paper update)

The UK government embraces the changes brought about by digitalisation. From innovative goods to revolutionary business processes, the adoption and spread of digital technology have contributed to significant increases in productivity, economic growth and consumer choice. The government welcomes these positive trends and the important contribution made to the UK economy by its fast-growing digital tech sector, which employs more than 1.5 million people and accounted for £6.8 billion of investment in 2016, 50% higher than any other European country.
It’s for these reasons the government has set out a strategy for making the UK the best place to start and grow a digital business, and sees this as critical in ensuring the UK is a leader in emerging technologies and highly skilled jobs.
The speed and scale of the changes caused by digitalisation have naturally had implications for the UK tax system.
In some cases, there is scope to try and harness the benefits of technology to make the system more efficient for both taxpayers and tax administration. That’s why the government is releasing further publications at Spring Statement on using split payments to combat online VAT fraud and the role of platforms in encouraging compliance by their users.
Yet unsurprisingly, the scale of change brought about by digitalisation has also posed challenges for tax policy. Nowhere is that truer than for corporation tax, where the development of certain business models has challenged our understanding of how and where companies create value.
At Autumn Budget, the government set out its initial position on this issue. While it continues to support the principle underpinning the international corporate tax system – that the profits of a business should be taxed in the countries in which it creates value – it believes that this principle is being challenged by business models for which value creation is in part reliant on the engagement and participation of users. The government’s view is that the tax system has not kept pace with these changes and that action is needed.
The government has since benefitted from substantive feedback from a wide range of stakeholders, who have offered constructive challenge and insight into this issue. It is therefore publishing an updated position paper to reflect on some of the key questions that came out of that process, and provide an update on the government’s thinking. The updated paper sets out the government’s view that:

• the participation and engagement of users is an important aspect of value creation for certain digital business models, and is likely to be reflected through several channels, such as the provision of content or as a contribution to certain intangibles such as brand.
• the preferred and most sustainable solution to this challenge is reform of the international corporate tax framework to reflect the value of user participation. It is important that the members of the OECD’s Inclusive Framework make progress in developing multilateral solutions, and to assist this process the paper sets out some of the government’s initial considerations on what this could include.
• as set out at Autumn Budget, in the absence of such reform, there is a need to consider interim measures such as revenue-based taxes. The paper explores some of the important considerations regarding the scope and design of an interim measure, and the steps that could be taken to ensure that it is well-targeted and protects start-ups and growth companies. The government still thinks there are benefits to implementing an interim measure on a multilateral basis and it intends to work closely with the EU and international partners on this issue.
This paper does not look to set out the government’s final position on these issues. It instead sets out the government’s updated thinking, with a view to engaging further with businesses and other stakeholders to better understand and resolve some of the outstanding questions.
The government is nonetheless clear that there is a challenge that needs to be solved. The current misalignment between where digital businesses are taxed and where they create value threatens to undermine the fairness, sustainability and public acceptability of the corporate tax system.
The government hopes to find a multilateral solution to this challenge, and believes that the upcoming OECD report and G20 summit in Argentina will be important in setting out a programme of work for achieving that. The government thinks that this paper can help to inform that work, and help to achieve a coherent, proportionate and sustainable long-term solution.

The government’s position is summarised as follows:

  • the participation and engagement of users is an important aspect of value creation for certain digital business models;
  • the preferred and most sustainable solution is reform of the international corporate tax framework to reflect the value of user participation; and
  • in the absence of such reform, there is a need to consider interim measures such as revenue-based taxes.

source: https://www.gov.uk/government/consultations/corporate-tax-and-the-digital-economy-position-paper