I was at the launch event of ‘The UK’s Digital Road to Recovery’ yesterday, a joint report from the LSE and Washington based Information Technology and Innovation Foundation (ITIF) which assesses the employment benefits of investment in three key areas of the UK’s digital infrastructure. The headline figure from the report suggests that £15 billion of investment in broadband, smart grid and intelligent transport systems could result in 700,000 jobs retained or created in the UK.

There was a lively debate with the delegates over the 700,000 figure, with some in the audience querying the validity of the job growth claims, and others questioning the availability of a £15 billion stimulus in the current climate. However, authors Dr Jonathan Liebenau from the LSE and Dr. Robert Atkinson from the ITIF were right to point out that the figure can be a mixture of jobs retained or created and that the £15 billion isn’t necessarily a government stimulus, rather a figure which could come from private investment encouraged by government policy.

Whether the investment comes from public or private channels the report does make clear the strategic value of investment in digital infrastructure over that of traditional infrastructure or other areas of the economy. The example given by Dr Liebenau was in the housing sector whereby £15 billion might retain a significant number of jobs in that labour market, but ultimately with no one buying the houses there would be no strategic benefit to the economy past the time it kept construction workers in a job.

Investment in the UK’s digital infrastructure in addition to creating or securing jobs has what Dr. Atkinson termed, ‘network multiplier effects’ or strategic benefits beyond the initial investment. Dr Atkinson talked about a ‘consumer spending bounce’ giving the example of his own experience when his home was installed with a fibre broadband connection and he spent money to upgraded his computer to take advantage of the new service. There will no doubt be immediate economic boosts to the wider economy off the back of such investment, but at Intellect we see the real value and wealth creation coming through the efficiency gains and new ways of working which broadband, or smart grid, or intelligent transport systems bring.

With the broadband example, in addition to the short term jobs boost – the hiring of labour to dig up roads to lay the pipes etc – the new ways of working and wider markets which next generation broadband opens up, and the significant efficiency gains new and connected businesses experience, create more jobs and economic value beyond the initial investment.

There was consensus that this is an important piece of work for industry in its battle to quantify the benefits of ICT investments in a way which is more palatable to non-technologists, and the headline figure will certainly grab the attention of a non-technical audience. Ultimately, the report locks into the idea that if UK’s going to invest – be it public money or the private sector encouraged by a regulatory framework set down by government – it needs to get the most ‘bang for its buck’. I for one was convinced that investment in the UK’s digital infrastructure will provide the high value jobs, growth and enable the UK economy to better compete in the global marketplace coming out of the recession.

By Daniel Smyth, Press and Public Affairs Executive

This entry was posted on Thursday, April 30th, 2009 at 12:38 pm and is filed under Convergence, Energy and Environment, Private Sector, Technology and Financial Services. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.