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  1. Spotlight on Policy
26 February 2019

Making the Northern digital economy a reality

When it comes to the digital economy, politicians and businesses cannot afford to prioritise some parts of the North, and ignore others.

By Tristia Harrison

While the politics are always complicated, the case for the Northern Powerhouse has never been clearer. Supporting growth beyond the South East by focusing on infrastructure development, local decision-making and skills not only offers huge economic potential but is the right thing to do in an economy – and a society – that has been too focused around a few London postcodes.

But there’s a real risk that, without a careful approach, we’ll replicate those old mistakes, with those areas well-placed for investment continuing to grow, while others are left behind and out of scope for the new economy.

When it comes to the digital economy – a business environment in which tech and digitally focused companies are able to grow – this risk is even higher. There’s a perception that “tech” jobs exist only for London millennials who never set foot outside of Shoreditch, or for academics moving between London, Oxford and Cambridge. These images could hardly be further from stereotypes of “left behind” towns in Lancashire, Yorkshire and Cheshire.

But why should good, future-proofed jobs be the preserve of the South? Northern communities deserve to benefit from new opportunities created through massive investment and government support. The country’s creative industries sector is growing twice as fast as the economy as a whole, and employment in digital businesses rose by 13.2 per cent from 2014 – 2017. The jobs which are being created are well-paid, with roles requiring tech skills having higher than average salaries.

There’s a risk of speaking about the “North” as if it’s one entity, whereas the truth is more complicated. There have been some big changes in urban areas such as Manchester and Leeds, where digital hubs have been established and where there are good prospects for future growth.

However, we need to be careful not to draw a line around cities and focus investment within those walls, recreating the asymmetry of investment. We need to make sure smaller towns are able to benefit from this investment as well.

Think of the impact new well-paid, long-term jobs could make in towns such as Chorley or Crewe. It would mean more people able to live and work locally, rather than moving to London or a nearby city. It would allow local authorities to invest on a long-term basis, and give schools the chance to work with a local business to shape students’ aspirations.

We know that politicians – both local and national, in Westminster and beyond – want to solve this problem. There’s a role for them to play to make the most of the levers available to them. But we can’t lay this at government’s feet and expect them to design a dynamic digital economy, ready to compete on the world stage. Warm words and press releases will not lead to the next Facebook emerging out of Warrington.

The UK has a great base of smaller tech companies with great success in creating highly valuable firms, but real change will require established businesses to translate intentions into actions. A diverse business environment – with companies of different sizes and functions – will be essential for a viable digital economy in the North, as major companies have an important role to play in supporting a long tail of innovators in a region.

Different businesses have various options available to them. When we think about this in TalkTalk, we see two roles for us to play: bringing much-needed infrastructure improvement, and supporting skills development.

When TechNation surveyed digital business across the country, it found that some of the most successful digital clusters thought access to good infrastructure was a key part of their success. This means good transport links, but it increasingly means good digital infrastructure. The UK lags behind much of the world when it comes to high-speed, full-fibre broadband connections, relying not even on 20th century technology, but Victorian copper connections.

The good news is that we’re finally on the cusp of the next generation of connectivity with several new infrastructure companies racing to connect the country. However, this infrastructure must not just reach cities but extend to smaller suburbs and rural areas.

TalkTalk is playing our part here, creating a new company to roll out connections to three million premises, with a focus on smaller cities and towns. Digital divides have persisted for too long in this country, which is why we are using our investment to help regional economies see the benefit from faster, more reliable connectivity. We need to see other infrastructure companies match this ambition – and leadership from central and local government to make sure that now here gets left behind.

So, infrastructure matters, but what comes first – the infrastructure or the investment? Is it a case of “build it and they will come” or does business need to make the first move to drive change?

Our view is that business needs to be brave and take a long-term view of a region. TalkTalk has significant roots in the North West, with offices in Irlam and Warrington key to our early success in shaking up the telecoms market. These roots count for something – they mean we have a highly-skilled and motivated workforce who enjoy a high quality of life, and who are loyal. It led to us opening our flagship office on Salford’s Media City in 2017, and our recent decision to move several hundred roles from London this year.

The decision may raise eyebrows in London, but to us it’s a no-brainer. In Salford, we can build the company in the way we want and in a supportive local environment. We’re able to work with local organisations to plan our development in line with local skills plans. We are establishing links to local, world-leading universities, and will create some great new posts through the expansion of our graduate and apprenticeship programmes.

Ultimately, this is what is needed if we’re to succeed in building a new digital economy. We need business and government to step up to match nice words with meaningful actions, from skills training to decisions about where to base their operations. Without this, we risk sleepwalking into yet another digital divide. Success here can’t be viewed as a distant nice-to-have; the question is whether business is up to the challenge?

Tristia Harrison is chief executive of TalkTalk.

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