“Our future transport, business and lifestyle needs will require world class digital infrastructure to underpin them. So my ambition is for the UK to be a world leader in 5G.”
Last Wednesday Chancellor Philip Hammond delivered the Autumn Statement, the second biggest economic speech after the budget in March, in front of the House of Commons.
The Treasury decided to borrow and spend to boost ultra-fast "full-fibre" broadband by 2020-21 with a £400 million investment fund. In total, the government is investing more than £1bn into digital infrastructure, supporting trials of 5G mobile communication.
Finally, the government will provide a new 100% business rates relief for a 5 year period on new full-fibre infrastructure, starting from April 2017.
The initiative is part of the bigger and newly-created National Productivity Investment Fund (NPIF), which will have £23bn available between 2017-18 and 2021-22 to fund a number of issues around infrastructure. These span across digital infrastructure, like 5G and fibre, to physical infrastructure like local transport and boosting rail capacity.
We asked members of the Manchester tech and business community to comment on the Treasury initiative to invest in infrastructure, and what impact they think this will have on the region.
Here’s what they said.
Martin Bryant, Council Member of Manchester Digital and Community Editor at Tech North said that “there's a strong argument that internet connectivity is a more important form of infrastructure investment than new roads and rail lines. I hope Northern cities take advantage of this opportunity to give themselves a leg up over the competition and help shape the future of communication."
The pressing need for infrastructure investment was also stressed by Doug Ward, UK Government adviser and co-founder of Telcom UK, who called for “an improvement in network infrastructure in order to support future economic development” in an interview for BBC Radio.
Jonny Cadden, founder of Business Rocks, a festival that brings together the world’s most connected & fearless technology entrepreneurs, enthusiastically welcomed the initiative in terms of long-term impact on the UK's position in a global world.
“This is fantastic news for the UK: constant investment in tech infrastructure is essential if the country is to keep pace with leading global tech powerhouses. Anything that empowers more founders to communicate faster and work smarter can only benefit the long-term prosperity of the nation.”
UKFast CEO Lawrence Jones welcomed the investment, but questioned the government's priorities, since the investment is modest when compared to the overall size of the UK digital economy.
"This investment in our digital infrastructure is welcomed but the government has got its priorities wrong. When you examine the £55bn being splurged on HS2 compared to the paltry amount being spent on future-proofing the entire UK’s digital economy, which is worth £180 billion a year to the country, it’s an insultingly small figure. Many of our clients, who run businesses in rural areas, could be many times more productive if they had improved internet access.
“The push towards improved mobile internet is critical for online businesses. Customers are becoming more comfortable purchasing from their phones and we’ve seen a huge increase in mobile commerce in the last year. This presents us with a huge opportunity for digital growth and it’s one we must not allow to pass us by.
"We have a chance to lead the world in innovation and I’m not sure the government is ready to grasp the opportunity."
Hector Kolonas, founder of Included.co, the largest co-working space ecosystem in the UK, highlighted the impact on local business clusters across the country, especially in light of the growing importance of cloud software.
“By expanding and bolstering connectivity nationwide, more shared workspaces can enable growth for local digital businesses. With everything from accounting software to customer support moving into the cloud, there isn't a young business who isn't affected by internet speeds in some way."
The Business Growth Hub was set up in 2011, and since then has helped thousands of businesses across Greater Manchester to grow, develop and reach their full potential.
Katie Peate, Head of Digital, Creative, and Technology, emphasised the importance of supporting and growing digital skills to make sure that more people and businesses can actually benefit from the investment in infrastructure.
“Access to high speed broadband is essential for businesses to operate and grow. The recent review of the GM Connection Voucher scheme has demonstrated the increased productivity impact for businesses who have effective connections, which led to an economic impact of £20m GVA (NET) for the Greater Manchester and Cheshire East economy.
Even more crucially, those who identified as having basic digital skills only contributed 4% to this economic impact. We therefore need to ensure that this welcomed £1bn investment by the Treasury is delivered alongside business support on digital skills, from services like the Business Growth Hub, in order to leverage the clear link between digital maturity and organisational success.”
Overall, the Treasury scheme to invest over £1bn in digital infrastructure was welcomed by everyone and deemed as crucial to the future of the UK's global leadership and the growth of the North West.
UKFast CEO Lawrence Jones and Katie Peate from the Business Growth Hub argued that the investment is a good initiative but not enough per se: in order for it to be successful it will need a larger budget as well as business support to enable more businesses to benefit from the improved infrastructure.
Finally, Martin Bryant was supportive of the new government measure, but said it's up to Northern Cities to take advantage of this opportunity to help shape the future of communication.
At Telcom, we are very excited to see the government giving attention to the digital future of the country, and we think it's a first step in the right direction. We will use this opportunity to increase our contribution to the digital growth of the UK and the North West.
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