Last week’s Public Accounts Committee (PAC) report marked an unfortunate new chapter in the story of broadband development in the UK. The legacy infrastructure, along with some other well-publicised issues, has allowed telecoms technology to leap a generation ahead of the infrastructure in this country. Providers are working to close the gap but, as they move to do so in rural areas, they are battling against the sometimes incompatible demands of commercial viability and individual need. That the PAC should be unhappy with the results of that is not surprising, but dwelling on the details and mechanics of the process really ought to be beside the point.
The struggle to meet the UK’s broadband targets is thrown into sharp relief when we consider just how modest those targets are. While countries such as Ireland, Estonia, and Denmark have robust plans in place to implement 100Mbps broadband universally by the end of this decade, the UK will only have 90 per cent coverage by 2017, and at the much lower speed of 24Mbps. That is not a failing of government, nor of business, but a universal failing – a failure to realise the importance of connectivity to success in a modern economy. It is often said that for the Millenials and teenagers growing up today, the internet is not a parallel world but is the world. The fact is, the same is now true for business.
In advanced economies such as the UK, the majority of value is added through knowledge businesses. The backbone of a knowledge business is information, and there is more of it than ever before. In the last two years as much data has been created as had been in the whole of human history up to that point, and that rate of growth is set to continue for the foreseeable future. In order for that data to be useful, however, it has to be transmissible. After all, the days of an organisation having all of its information in lots of magnetic tape and hard drives in the basement, are a thing of the past. Today, the disks are more likely to be in another building, another country or in many different locations. Similarly, fewer and fewer organisations now buy software to load onto personal and shared machines – while the capabilities of enterprise software (particularly in the field of analytics) have increased massively in the last decade, such software is increasingly likely to run on a computer elsewhere, with time rented by the month or by the hour. That is the reality of cloud computing, which can drastically lower the barriers to entry for businesses in new media, technology and other sectors, facilitating new and different ways of running a business and helping tried and tested business models run better. However, without good broadband access this is simply impossible.
When the information that a business relies on is stored elsewhere and the applications that it uses run on computers in another country, broadband speed, coverage and reliability ceases to be a matter of convenience and become a matter of necessity. And it is wrong to say that this is only relevant to the urban centres where the majority of large businesses have their headquarters. With more and more businesses basing their entire model on knowledge and information, and more and more business interaction taking place using telepresence and video conferencing, location is becoming less important to the viability of a new business, but connectivity is becoming progressively more so. Indeed, the ability to collaborate using social platforms, to analyse data in real time and derive insights, to access powerful software and vast data stores, and to be able to do so from anywhere, are prerequisites to the success of many businesses operating today.
That is true whether of a 5,000 strong accountancy practice in London, or three application developers working in a cottage in the Hebrides. Both types of business will be equally important to the continued economic success of the UK, but it is only the former which should have any real need to base itself in an urban centre. Indeed, it serves no purpose to bring more businesses than is strictly necessary into cities. It is valuable for entrepreneurs and start-ups to collaborate, but social platforms mean that this no longer has to mean co-location. Today’s innovators are as likely to work with peers in Rio De Janeiro, Guangdong, or Seattle as they are to work with those next door. Against this background, there is no reason to concentrate more commerce in cities than we need to. Avoid doing so, and we may ease some of the pressure on our transport infrastructure and property stock, as well as offer the chance to achieve a fairer distribution of wealth and commerce in our regions. If we want to lead the world in entrepreneurship and innovation, and to reap the benefits of that across the nation, then better broadband provision is a good place to start.