Every so often you read something that grants a name and a coherent explanation to a problem you’ve known was there all along, but could never clearly define. Yesterday was that case.
A study published by the National Institute of Economic and Social Research has revealed that the digital economy is grossly undercounted and misclassified within the UK’s economic landscape.
Why? The government uses a set of standards called Standard Industrial Classification (SIC) codes to measure and classify all UK economic activity. Over the years these codes have been reviewed and updated but by and large, they are still grounded in the definitions of economic activity which existed when they were drawn up in the year 1948.
The result, according to the NIESR, is that “one in ten companies in the UK are now classified vaguely as ‘other’. One in five have no classification at all.”
And the end result of that is that at least 100,000 companies working in the digital economy, and by extension hundreds of thousands of employees and professionals, literally do not count in our economic picture.
The report gave three real-life examples which frankly beggar belief:
- A company which offers web design, QR coding, SEO, domains, and hosting is officially classified as “Other publishing activities”;
- A company which offers highly specialised software development for the oil and gas industry is officially classified as “Other business support service activities not elsewhere classified”;
- A company which offers text-to-speech technology for the disabled is officially classified as “Other business support service activities not elsewhere classified”.
For other industries, the taxonomies go so deep that there is a single classification for “manufacture of macaroni, noodles, couscous and similar farinaceous products”. For the entire digital economy? “Other.”
Before you launch into a rant about Westminster, Scotland’s economic classifications, as exemplified by the national procurement codes, are no better. Web design and development projects are mostly lumped under the “application service provision” subcategory within the category ICT, along with wireless conference room systems and CalMac ferry ticket machines. Toner cartridges, being far more important, have their own subcategory. The Ryder Cup has its own top-level category, like education or transport. But an issue-specific social media campaign for the NHS is classified as “other Social Community Care Supplies and Services”, as if it was an adapted toilet seat.
Unlike the UK-wide standards, these classifications have obviously been revisited and updated, and the message is clear: a three-day sexy golf event – big men in suits kissing American tourists’ arses – counts as proper economic activity. You and I, of the non-golf persuasion, hunched over our laptops, count as “other”.
Our complaint about this problem isn’t mere sour grapes. When governments are introducing policies or legislation they need to have a sense of what industries will be affected and how many businesses will be impacted. So how are they supposed to gauge the impact of their decisions on an industry which, on paper, doesn’t exist?
The cold contempt shown to the digital economy this late in the game is another place where we, as a profession, desperately suffer for our lack of organisation and unity. How can we stand up for our profession when we can’t organise as one first? It’s time to stand up and be counted.
(Postscript: the VATMOSS fiasco, which happened after I originally published this post, justified every word of it.)