An academic study out today suggests that businesses create jobs and grow faster as a result of broadband improvements. However, the findings suggest that access to high speed internet connections may simply be the price of staying in business, rather than delivering a fundamental transformation of a local economy.
The Plymouth University study, which surveyed 88 SMEs using BT's superfast broadband in Cornwall, found that 83 percent of businesses that have been using the technology for over 12 months are saving time and money. Meanwhile, nearly half of those surveyed said that fibre broadband has helped their business generate new sales, with a quarter pointing to new overseas trade deals.
While the initial signs seem positive, only seven of the 88 businesses surveyed said that superfast broadband has helped to boost their staff numbers, with 18 new jobs created and 25 safegaurded across those firms.
However, the sample of 88 businesses reflects just 11.6 percent of the total number of businesses in Cornwall that have been connected to superfast broadband for over 12 months. Lead researcher Adrian Dawson said the true number of jobs created and safeguarded in Cornwall as a result of superfast broadband is likely to be around 767 and 1390 respectively, when all businesses in the area are taken into account.
“The evidence does suggest that super fast is genuinely creating and safeguarding jobs,” said Dawson at BT’s headquarters in London today, before conceding that the figures in the study may be slightly inflated by the fact that the businesses surveyed are the very early adopters who needed the technology the most and are therefore the ones likely to get the most benefit from it.
BT argues that Cornwall is now one of the best connected areas in Britain and the best connected rural region in Europe, with 206,000 homes and businesses, or 82 percent of the region, now covered by the technology. Superfast broadband is expected to reach 95 per cent of homes and businesses in Cornwall by the end of 2014.
Fibre connectivity delivers connections of up to 300Mbps to areas where businesses were previously running on speeds as low as 500Kbps.
SMEs at the event said their previous broadband connections were hampering their productivity levels. They claimed that superfast broadband allows them to conduct video conferences over programs such as Skype and introduce cloud services to the business for hosting, back-up, storage and extra processing power.
"I think this is Cornwall’s HS2," claimed Graham Smith, CEO of Instructus Markets who aim to educate graduates and trainees entering the financial services industry. "We don’t have population density to warrant investment in hardware that will get people to Truro 20 minutes earlier than they would otherwise but this opens a whole new world for us. The critical challenge is how we choose to exploit this tech and we will need help with this."
Andy Phippen, a professor of social responsibility in IT at Plymouth University, said that the quicker network speeds had fundamentally changed businesses in Cornwall, allowing them to work remotely and internationally. He also said that businesses had become greener as they had cut back on travel, despite not setting out to reduce their carbon footprint.
Liv Garfield, the chief executive of BT’s Openreach infrastructure division, said that 20 million premises in the UK would have access to fibre broadband by next summer and claimed that the nation has already leapfrogged the likes of France, Italy and Spain.
Neeilie Kroes, vice president of the European Commission, which provided much of the funding for the £139 million Cornwall project, said: "This research has real international significance because it starts to vindicate what we've said all along – that fibre broadband will energise our economy, generate jobs and save public money."
The number of UK households with access to super-fast broadband is now 73 percent, according to figures from regulator Ofcom.
The UK broadband market is dominated by BT (which includes Plusnet) with 6.79 million subscribers by July 2013, up from 6.28 million in March 2012. Sky, too, is on the rise with 4.91 million subscribers, up from 3.86 million in the same period, pushing Virgin Media into third place with 4.47 million subscribers. The losers have been TalkTalk and EE/Orange, both static on 4.07 million and 700,000, respectively.