The prime minister and Lord Mandelson have long been passionate advocates of embracing the global digital revolution as a fount of high value jobs and future growth of Britain. Already the technology sector is responsible for some 10% of GDP and a million jobs. In the US too, Obama has embraced technology, not just as a way of conducting politics, but as a strategic means of modernising public services and providing economic competitiveness. And that it is the challenge of the UK. Other countries are vying to attract research and development and high value industries, and acting now to strike a leadership position.
So is the government doing enough? The announcement of the Digital Economy Bill is an important step. It follows on from Stephen Carter’s Digital Britain report looking at the future of broadband and media. That itself was an ambitious piece of policy-making, conducted with great speed. A recent LSE report put the number of UK jobs created or retained by next generation broadband at over 200,000. Faster and more reliable broadband, delivered mainly through fibre-optics, is the infrastructure that underpins almost everything else in the 21st century. It is a platform for massive innovation and the development of new kinds of businesses and new kinds of jobs.
The report avoids two bad options for getting there. The first would be to do nothing and then face a distress purchase years later, when the harm to UK competitiveness had become clear. The second would be to pump in government money that needlessly substituted private investment. The government’s solution is having the market deliver the first two-thirds, where there is a business case, and then topping up the coverage with the funds from a levy on phone lines. Given the pressing economic need it is time to see a real focus from all politicians on getting behind a workable policy.
The government has also announced an innovation fund to support private sector investment in early-stage technology companies. Technology start-ups, with their high costs and long waits for return on investment are more than usually exposed to the cold economic winds. The funding environment is particularly harsh. It would be a national economic tragedy to lose the growth companies of the future. Recessions have a track record of spawning new ideas and new business models. Most of the global technology behemoths were born in times of economic challenge. Anything that helps the UK not to lose that opportunity is welcome. Turning UK innovation and science into jobs and growth must be part of our economic future.
There’s much to welcome in Building Britain’s Future. But what I look for now is the action to follow it up. And from politicians of all sides a recognition that technology is not so much about politics but policy, and vital to the UK’s economic future.