The UK and eGovernment: Chapter II, Infrastructure

Current UK ICT Infrastructure
The UK has been successful at implementing a strong telecommunications structure to provide ICT services more effectively, with the most extensive and competitive broadband market in the G7[1] as a result of large investments in increasing services and deregulation fostering price and Internet speed competition. This has had the effect of significant increases in usage both for businesses and citizens.

Nationally there are now 7 million addresses with broadband connections and 99 percent of the population have access available.[2] Broadband is now the preferred choice for people taking up Internet services, with future increases in broadband speeds expected as a result of competition over service between Internet providers.

Table 1: Demand and Investment Variables[3]

Compared to Europe, the UK ranks relatively well, having the second highest in a sample of 12 countries in terms of telecommunications infrastructure[4], fourth in terms of Internet penetration[5], fifth in terms of the broadband penetration rate[6], third in terms of the percentage of individuals buying on the Internet and third in terms of the percentage of persons who feel confident using a computer.[7] However, the Internet’s access cost ranks seventh[8] and the concerns about buying on the Internet fifth,[9] highlighting weaknesses in UK Internet provision.

Despite coming 6^th in a ranking by the International Telecommunications Union in terms of the number of Internet globally the UK fared only 13^th out of the group of 17 countries featured in terms of percentage Internet users (see Table below). This ranking is expected to decrease over time as the Internet is used in larger numbers by foreign countries in their native languages.

Table 1: Percentage of Internet Users and Number of Internet Users[10]

The International Benchmarking Study, released in 2004 shows that “UK businesses are now amongst the most sophisticated users of ICT in the world.”[11] It ranks the UK in third place according to its index of sophisticated use of ICT, a leap from seventh last year. The Digital Divide also finds that “UK businesses are amongst the leaders for adoption of new technologies such as Voice over IP and desktop video conferencing.” It cites the proportion of micro and small businesses with a website has increased by sixteen percentage points, 30% of micro businesses are trading online, up from 17% and 31% of small businesses are trading online, up from 22%.[12]

Current Regional ICT Infrastructure
The major ICT areas in the UK in terms telecommunications are London and Edinburgh. London is the heart of UK ICT, comprising over 23% of the UK ICT Sector (63% when including the South East regions), employing around 300,000 employees and receiving 46% of Foreign Direct Investment [13] Map 1 (below) highlights the spread of knowledge workers across the Southeast and beyond. Fifty percent of Londoners are connected to the Internet at home, as are all London schools and colleges, with half a million London homes already connected to broadband.

London is ranked “as the number one European business location in terms of telecommunications provision”[14] as a result of “multiple suppliers competing for huge volumes of sophisticated communications traffic, much of it driven by London’s exceptional concentration of international business and financial services.”[15]

However, despite this London is not performing as well as it should. Part of the reason is that UK ICT firms are not sufficiently large enough and become dominated by ‘800lb gorillas’, as larger, foreign controlled businesses “dominate supply of software (and some services)” and “take advantage of the trend towards systems integration and service provision at the expense of indigenous ICT firms.”[16] UK cities also struggle to compete with Asia’s dominance as the worlds IT helpdesk and software development hub and its cost benefits of lower wages and economies of scale.

Map 1:London’s Suburban Economy in 2001[17]

Map 2: The Geography of the Knowledge Economy in Britain: Employment[18]

In other regions the business drivers for growth are much weaker and concentrated in major cities such as Manchester, Leeds and Bristol (the Core Cities Network) [19] The London Knowledge Economy considers that Edinburgh is the only city region outside London “with a strong business knowledge economy and a large resident graduate labour force.” [20]

Written by Jonathan McHugh
Written in June 2007. Part of Electronic Horizon: An Examination of the Importance of eGovernment and the UK Governments Approach to ICT, the Internet and its Impact on Modern Government

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[1] Cited in Digital Strategy April 2004 p12

[2] Cited in Digital Strategy April 2004 p12

[3] L. Torres, V. Pina, and B. Acerete E-Governance Developments in European Union Cities: Reshaping Government’s Relationship with Citizens (Blackwell Publishing) 2006 p. 293

[4] UN Global E-Government Survey 2003 (United Nations Online Network in Public Administration and Finance) 2004

[5] Internet Indicators (International Telecommunication Union). 2003

[6] European Electronic Communications Regulation and Markets (Commission of the European

Communities) 2003

[7] CEDEFOP Info January–February (European Centre for the Development of Vocational Training). 2003.

[8] Mindforest. Tendances de l’Internet au Luxembourg en 2003 [Internet trend in

Luxembourg in 2003] (Mindforest) 2004

[9] Special Eurobarometer: Issues Relating to Business and Consumer E-Commerce (Commission of the European Communities) 2006

[10] World Telecommunication Development Report Access Indicators for the Information Society (International Telecommunications Union) 2004

[11] Cited in Digital Strategy April 2004 p14

[12] Cited in Digital Strategy April 2004 p14

[13] Cited in ICT and E Business Report May 2005. Laureen Katiyo

[14] Connecting the Capital: Information and Communications Technology in London. Jan 2004

[15] e-London and the London Plan, Local Futures, GLA, 2002

[16] Cited in the London ICT Sector 2005

[17] The London Knowledge Economy (Knowledge Economy Network) 2006 p. 18, derived from ONS data

[18] The London Knowledge Economy (Knowledge Economy Network) 2006 p. 18, derived from ONS data

[19] The London Knowledge Economy (Knowledge Economy Network) 2006 p. 18

[20] The London Knowledge Economy (Knowledge Economy Network) 2006 p. 18