Broadband: The state we're in
Published: 30 Mar 2004 17:35 BST
The problem at the moment, however, is that, while organisations in both small and large urban areas have no problems with obtaining fast connections, many small to medium-sized enterprises (SMEs) in rural areas are losing out. Small country businesses may still have to rely on slow dial-up modems, pay for expensive ISDN or even opt for the leased lines usually only economically viable for large corporates. This affects their competitiveness which in turn impacts the UK economy as a whole given the huge percentage of business in the UK that fall into the SME category.
"It's about being able to function properly and compete with business in urban areas, but it's also about making certain parts of the country attractive to companies to maintain or improve employment and, therefore, local GDP [gross domestic product]," says Michael Philpott, broadband analyst at Ovum.
Impact on GDP
Colin Campbell, broadband campaign manager at the Broadband Industry Group, agrees. He cites a recent survey undertaken by the Centre for Economic and Business Research, which indicates that if all UK companies had broadband, productivity would rise by 2.5 percent by 2015, which would equate to faster economic growth. As a result, UK GDP would be £22bn higher in 11 years' time and government borrowing would be £13bn less due to lower spending and extra tax revenues. Moreover, net exports would be £11bn more as the economy became more productive and fixed investment would grow by £8bn as expenditure on telecoms equipment was stimulated and more services made available online.
But despite the alleged bounty that broadband could bestow, DTI has indicated that SMEs aren't snapping up high-speed connections in the numbers expected with most citing a lack of any real business advantage beyond obtaining a faster Internet connection. "The operators have to start making more business applications and services available, for example setting up teleworkers as part of a package or providing remote backup so they can save x amount a month. Organisations need to be able to create a business case around it and if they can't, it simply turns them off," says Ovum's Philpott.
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I live in a village in the north west of england.... Robert Anderson -
I think that you will find South Korea is No. 1 fo... Iqbal Bedi
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Price reduction of Broadband anywhere,
30 day... Marcus Scarlett
