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?
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.
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?
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
>> See also: Digital