Ten years ago, discussions around creative industries infrastructure were focused around artists’ studios, production facilities and performance venues. Affordable workspace might remain a problem, but no one today would exclude issues around access to digital technology and, in particular, high-speed internet. And yet, although recognised as crucial to the future of the creative economy, there are still major flaws in how government, and policy debates more generally, are addressing this. For all the hand-wringing over market failure, rural provision and local monopolies, the real challenge is being missed.
It’s important to set a couple of things straight. First of all, and however well-intentioned, anxieties over digital inclusion and the fear that citizens are unwillingly being excluded from the internet are largely misplaced. The UK has the lowest proportion of people who have never used the internet in Europe, and the small percentage of those not already connected are not put off by cost or lack of suitable services – they just don’t want it, and can’t see any benefit. Of course, this isn’t to say that such people should be forgotten, but there are better ways to help self-excluded individuals to receive public information and services without getting muddled up with the provision of next generation broadband. We should be concerned if such people can’t access public services – not that they can’t use the internet to do so.
Secondly, when it comes to residential access to broadband, the UK performs relatively well. Of course, judging how well a market functions is by no means straightforward. Market share, new entrants, profits, prices and innovation are just some of the factors that regulators must consider. But the most recent surveys indicate that there is no major concern for consumer broadband – on the critical issue of price, for instance, the UK compares favourably with US and the rest of the EU.
It is when we get to broadband for businesses, and small creative businesses especially, that the real problem lies. Thousands of creative businesses would benefit from much faster upload speeds and greater bandwidth than the existing network offering allows, but providers are reluctant to upgrade ‘next-generation access’ services in areas where SMEs cluster as these tend to differ from the main hotspots of residential demand. As a consequence, businesses are faced with either reasonably priced but insufficiently fast residential provision or else dedicated leased lines, which are often prohibitively expensive for micro and small businesses.
For any government wanting to boost the creative economy, then a simpler and more targeted approach is needed, one that avoids the temptation to conflate objectives, and remains focused on business growth.
Internet provision needs to be based on the geographic realities of the digital economy – a landscape characterized by urban agglomerations, clusters and co-located value chains. Without this, government policy to support the sector risks becoming worryingly disjointed. High-profile initiatives such as the Connected Digital Economy Catapult or the Technology Strategy Board’s innovation funding programmes will count for little if there isn’t good connectivity in place for small businesses to benefit from them.
The good news is that sorting this out won’t cost much money, and the delivery mechanism is already in place. BDUK (Broadband Delivery UK) has now built valuable experience of talking to hundreds of suppliers: over 200 are registered for the connection voucher scheme now operating in 20 cities and scheduled to run until March 2015. Building on this, the following could make a significant difference:
- The Urban Broadband Fund (which the Labour Party has said it would reallocate on digital inclusion projects) should be extended and targeted at high-growth business clusters in the UK’s core and major cities. A continuation of the Fund post-2015 should be focused on helping to establish local digital exchanges that allow for the co-location and sharing of services.
- Broadband for business should be linked to a suite of enterprise support policies (such as the Technology Strategy Board’s innovation vouchers), offering particular benefits to micro and small creative businesses in the process. Alongside this there should be a promotional campaign, which includes a skills element, around the opportunities that high-speed internet provides for creative businesses.
Iain Bennett, independent consultant and policy analyst