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Hi-tech innovation needs the right government framework to flourish

The UK remains one of the best places in the world for investment and innovation. However, this doesn’t mean we should lose sight of the policy environment and its impact on maintaining and supporting UK competitiveness. Technological change demands a policy framework that provides for government and the private sector to work together to meet the challenges and opportunities presented by digitalisation.

The space industry in this respect has been a UK success story. But innovation has flourished here because government has invested the time and energy in creating the right framework. The telecoms industry shares a common goal with the space industry in bringing the UK into the digital age. But similarly, it can only achieve its ambitions if government creates a policy framework that allows it to flourish.

Lessons from space

As Chairman of UKspace I’ve seen the UK space technology industry go from strength to strength. The industry contributes £13.7bn to the economy, exports 36 per cent of its output and employs 38,000 people in highly-skilled jobs. In its 2018 “Prosperity from Space” report the Government set the ambitious target of doubling growth from £250bn to £500bn by 2030. They are ambitions welcomed across the sector. As we enter 2019 we are looking forward to concluding a “Sector Deal” with Government and launching a National Space Programme.

In March, the Government passed the Space Industry Act, described by the UK Space Agency as “the most modern piece of space industry legislation anywhere in the world”. It enables such innovations as satellite launches from UK soil, the potential for future space tourism, hypersonic flight and high-speed point-to-point transport. Partnership between government and the space industry has been crucial to its success, lessons that can be applied to the telecoms industry.

Investing in digital infrastructure

Investment in digital infrastructure was one of the key points set out in the Government’s Industrial Strategy. The policy paper made a commitment to £176m worth of investment in 5G and £200m for local rollout of full-fibre networks.

In March 2017, the Government issued its 5G strategy for the UK, pledging to make the UK a global leader in this nascent technology. These are encouraging signs as the potential of 5G is practically boundless. Not only will it transform the way we interact with our smartphones, through constant and seamless connectivity, but it will also transform the built environment around us; powering the internet of things, driving new developments in autonomous vehicles and helping us to address the urban-planning challenges of the 21st century. Indeed, research by HIS Economics estimates 5G will enable $12.3 trillion of global economic output in 2035 and support 22 million jobs.

The telecoms provider O2 in a recent report, The value of 5G for cities and communities, found that 5G could collectively save local authorities £2.8bn a year in efficiency savings from reduced social care costs and from smarter streetlights and save cities £6bn a year in productivity savings. What’s more, every household could be £450 better off, with £145 taken off energy bills alone through super-smart grids.

However, none of these benefits are assured. As the report elaborates, 5G coverage ‘is a bit like a patchwork quilt’ due to its decentralised nature and ‘needs a high level of collaboration to hardwire the technology into city infrastructure’.

The challenge to 5G

While the UK was a pioneer in mobile technology, it now risks being left behind in 5G, with digital infrastructure already lagging behind international competitors. The consequences of inaction could be severe. Douglas McWilliams, author of The Flat White Economy, estimates that “By 2030, unless we catch up with the best in class, the impact on GDP could be as much as a quarter”.

Due to its super-high frequency, it is estimated that 400,000 new masts will be needed for national 5G rollout. Where 4G coverage is powered by large masts, 5G requires small-scale infrastructure deployment and small cell rollout. Currently however, mobile operators have complained that planning laws can delay the installation of necessary equipment and that Ofcom’s “code powers” are too restrictive.

Infrastructure installed by mobile operators can here be complimented by ‘smart furniture’ such as digital streetlights and kiosks. Indeed, a recent King’s College London study recognised the pivotal importance this kind of infrastructure on our high streets as part of a 5G rollout.

An economy for the 21st century

In early December, Maximus Networks brought together key figures from across the third sector, space and telecoms industries in the House of Lords to shine a spotlight on the importance of UK businesses and Government working collaboratively in the digital economy.

The successes of the UK space industry have in part relied on Government creating a policy framework tailored to its needs. Ukspace shares a number of common goals with the telecoms industry. We both wish to turn the UK into the most dynamic place in the world to do business and we need to work collaboratively to ensure that happens.

Just as the Government has created a policy framework suited to the needs of the UK space industry, so it must also create a framework that allows the UK telecoms industry to thrive.

In doing so, Government can ensure the UK is prepared for the challenges ahead and ready to make the most of the opportunities presented by the digital age.

By: Graham Peters — Chairman of UKspace


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