How can the UK secure a decent return on investment to
cover the capital and the interest on the billions the prime
minister, Gordon Brown is borrowing to invest in digital
industries? We need a plan so the future is not about servicing
political debt but delivering sustainable and profitable innovation
- so what is the government planning?
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Infrastructure
The first step is to invest in more digital infrastructure and
install fibre to replace the copper that has served much of our
domestic broadband needs so far. With BT already investing £1.5bn
to light up 10 million homes by 2010, this still leaves plenty of
homes fibreless and relying on existing landlines.
However, the BSG, the government's advisory group on
broadband reckons that
taking superfast lines to curbside cabinets - a partial fibre
deployment -would cost £5.1bn. This fibre to the cabinet (FTTC)
option, with wireless technology deployed to cover the last,
expensive mile, would
upgrade our digital infrastructure more cost effectively than the
ruinous fibre to the home (FTTH) price tag of £28.8bn.
Framework
The
Digital Britain Report will be published early this year with
the aim of accelerating growth and consolidating the UK's position
as a world leading knowledge economy. This sets out the
government's ambition to see Digital Britain as a leader for
innovation, investment and quality in the digital and
communications industries. So what are the legislative and
non-legislative measures required to support this?
Regulation
The whole purpose of the internet is to allow the free exchange
of ideas and content. As 90% of the use of the internet is for
purposes that the government would find offensive in some way -
pornography, gambling and untaxed online purchases - the
difficulties the authorities face in trying to regulate it is that
centralist tendencies donot go down well with the general public
and it is uncertain that they have sufficient resources available
to take such large-scale action. The balance that needs to be
struck is to give protection while not stifling legitimate internet
usage by over-regulation.
Legislation
There are several legal issues with internet usage. For example,
copyright infringement, libel, invasion of privacy and misuse of
trade marks. These are, however, global problems and it is
unrealistic to expect the UK to be able to legislate on its own in
areas where global solutions are needed.
The government intends to concentrate its legal focus on
copyright, as one area to improve competitiveness. Meanwhile, the
authorities have shown considerable
interest in
controlling not only content but perhaps financial transactions
too through imposing a number of recording and monitoring
restrictions.
These are now embedded in UK legislation. In the non-virtual
world these events would have caused an outcry as great as the
42-day detainment issue. As usual, because the virtual world is
invisible to most, it has passed most by without a comment.
Emboldened by the government's investment, Digital Britain must not
come with more legal intrusion.
Sectors
The term "digital industry" (enterprises taking advantage of
digital infrastructure) is a catch-all phrase that needs unpicking
to make sense of what skills are needed and what sectors will be
creating jobs?
By way of bad example, media marketing that includes ad sales
networks, ad serving andad management tools as well as "creative
digital" jobs in advertising agencies and affiliate marketing
sectors like direct marketing and mobile marketing is under the
cosh through a combination of reduced revenues, discretionary
business budgets on-hold and consumer cash in short supply. Even
the public sector, much criticised for frivolous marketing spend,
is unlikely to be able to ride to the rescue.
Focus
The government is, however, focusing its attention on the
following arenas as areas for investment:
Online protection - to develop a trusted anti-fraud and child
protection digital environment.
- Next generation networks - to transport voice, data and all
digital media via an all-IP network for information and
services.
- Production/new media - to encourage the emergence of digital,
computerised, or networked information and communication
technologies.
- Digital radio - to identify barriers to wider investment and
development of digital radio platforms, and draw lessons from the
digital television switchover programme.
- Public service content - to evaluate the impact of
digitalisation and the new technologies on public service
broadcasting assets and public service licences, in the UK as a
whole and in the nations and regions especially as younger
audiences are moving away from TV by watching content on internet
and mobile platforms.
- Creative economy - to grow the interlocking industry sectors
that focus on creating and exploiting intellectual property
products such as music, books, film, and games, or providing
business-to-business creative services such as advertising, public
relations and direct marketing.
- Regulatory frameworks - to deliver an open regulatory framework
that maximises investment and innovation by providing certainty and
equipping regulators with the teeth to achieve their
objectives.
- Broadband spectrum - to identify the barriers to the release of
spectrum and a fully functioning market in the trading and use of
spectrum.
Employment
The government's
National Skills
Academy for IT initiative is only in the business planning
stage. With estimates that many hundred of thousands of IT and
telecoms workers are needed every year to meet demand, the academy,
funded to the tune of £8m of taxpayers' money, needs to get a move
on if the UK is to transform itself into a knowledge economy.
With estimates of the country needing 140,000 new techies
annually to satisfy the industry's demand for skilled staff
(according to research conducted in 2007 in a very different
environment) only 19% will come from education, underlying the
trend that IT student numbers are down 50% in the last five years.
Also, the number of women in the sector is also in decline - down
to just one in five workers.
Skills
The skills needed to drive digital industries are varied but
professionals with Oracle, SAP, Microsoft .net, web development,
network support and business analysis skills, as well as
virtualisation technologies will be in demand. Project management
is the non-IT skill in shortest supply in both the public and
private workplace, along with the perennial difficulty in finding
good leadership skills.
What is essential for success is the hybrid professional, as
digital industries are at the intersection of business models and
IT. This requires people with varied experience, professional
versatility, multidiscipline know-how and technology
understanding.
Trade
The government sees access to better technology and higher speed
broadband as crucial to the UK economy. It must ensure that the
technology providers and content producers have access to UK-based
skills. The proposed investment in skills from school through to
higher education needs to ensure start-ups are helped to innovate
and take on new people.
Otherwise all the investment in infrastructure will have been in
vain except to deliver diversionary entertainment for the ever
swelling ranks of the unemployed. According to Ofcom, "The average
Briton now spends 50 hours per week on the phone, using the net,
watching TV or listening to the radio." Let's hope the average
isn't on the increase.
Education
Digital industries need to work with the government, schools and
universities to convince children that subjects such as maths and
physics can result in jobs with career opportunities. There needs
to be more convergence between education and business - perhaps by
providing incentives for collaboration. We need imaginative and
practical steps to make this happen.
Funding
The risky business of innovation needs cash to get started.
Government, with its belief in Digital Britain, must now help with
tax breaks for tech start-ups and grants to support home-grown
R&D.
To this end,the government is trying to set up a series of
University Enterprise Networks
in the hope of making graduates more business savvy and
entrepreneurial and to encourage stronger links between business
and higher education to make use of the expertise and talent in
universities and colleges.
Europe
Gordon Brown has the support of the European Commission. The EC
has called for smart actions to aid economic recovery. It said that
increased investment in technology is essential to drive growth and
play a prominent role in the recovery plan.
While political commitment and fiscal incentives are welcome all
politicians liken implementing high-speed internet connections "as
important as building the railways in the 19th century".
The danger is that we end up carrying coal to Newcastle, as
governments are notorious for putting money in the wrong place at
the wrong time and underestimating the scale and complexity of the
technology projects.
Sure, connecting everyone everywhere is a good thing, but the
Victorian's also built sewers. Their comparison with the internet
connecting the family home to all sorts of filth should not be
missed.