UK organisations’ lack of planned investment in digitalisation puts infrastructure modernisation and decarbonisation at risk, according to a new study from Siemens.

Titled Digital Transformation, Sustainable Returns: The New Pathway of Infrastructure, the new study explores how 650 senior executives from 13 countries¹ believe digitalisation can be harnessed to accelerate decarbonisation and transform the world’s infrastructure.

The results show that only 38% of UK businesses surveyed are likely to increase investment in digital technologies in the year ahead, compared to a global average of 58%.

This leaves the UK lagging far behind countries including Canada (72%), China (70%), Italy (64%), and Germany (54%) when it comes to likely investment in digitalisation in the coming year. Siemens says that limiting the uptake of digital technologies in infrastructure risks widening the UK productivity gap.

Despite slower rates of investment, the benefits of digital technologies were well appreciated by UK organisations. UK respondents rated productivity (68%), workforce health and safety (66%) and decarbonisation (64%) as key benefits of digitalisation to their organisations.

When it comes to decarbonisation, in particular, firms in the UK cite Energy Storage Technologies (44%), Electric Vehicle Charging Networks (34%) and Remote Sensing and Monitoring (34%) as having the biggest impact in the next three years.

But perceived costs of implementation (46%) and the complexity of integration (38%) were cited by British businesses as a barrier to the adoption of digital business platforms. Only Mexican firms (48%) were more acutely influenced by the cost of investment among the 13 countries covered in the research.

The Climate Change Committee has found that the UK must make faster progress on decarbonising infrastructure and industry, if it is to stay on track to meet its 2050 Net Zero targets.² Ahead of the publication of the Government’s industrial strategy, Siemens has called for more steps to be taken to encourage UK businesses to invest in technologies to futureproof the UK economy in line with global competition.

Carl Ennis, Chief Executive of Siemens UK&I, said: “Digitalisation is the number one driver in us creating a modern, decarbonised UK infrastructure. From electricity, water, buildings, transport – the list goes on – technologies like AI, simulation and automation are increasingly playing a role in helping to optimise assets and transition to net zero.

“It is concerning to see the UK trailing behind its global competitors when it comes to planned investment to modernise infrastructure, but perhaps unsurprising given long-term uncertainty in the UK in recent years.

“The upcoming industrial strategy must help create a long-term, stable policy environment that businesses need to invest, presenting an exciting opportunity for British firms to close this gap. The research reiterates the need for this to be accompanied by specific regulatory frameworks and policies to drive down the cost of investing in digital infrastructure, and ultimately allow businesses to deploy it at scale.

“Culturally, we also now need to be steadfast in our approach to technology. Either we learn to overcome barriers and adopt it at pace, or we put productivity, decarbonisation and the UK’s growth at risk.”

View the global report here – https://www.siemens.com/global/en/company/insights/tech-report.html

In its submission to the Invest 2035 Industrial Strategy Green Paper consultation, Siemens called on Government to:

• Set targets for increasing digital adoption in the proposed ‘growth driving’ sectors, such as advanced manufacturing and clean energy technologies
• Extend 100% first year capital allowances (so called ‘Full Expensing’) to leased assets
• Offer more attractive early-stage funding and support for businesses investing in sustainability and digital technologies
• Introduce measures, for example tax credits, to support the reskilling and upskilling of existing workers, a crucial enabler of digital adoption

(1) USA, China, Germany, Switzerland, UAE, UK, India, Singapore, Australia, Mexico, France, Italy, Canada

(2) https://www.theccc.org.uk/publication/progress-in-reducing-emissions-2024-report-to-parliament/