If your business is reliant on the internet – and for many businesses nowadays that is simply a given - then inequality can be costly. Having less access than your competitors could put you at a major, even fatal, disadvantage.
The rural/urban divide on broadband access matters. If you can’t send orders reliably to suppliers, use videoconference facilities, or operate a digital storefront your company may be missing out.
But that is the reality for many rural businesses, a report from the Universities of Aberdeen and Oxford has found. The study, Two Speed Britain, found that more than a million people across the UK live in areas with no high-speed broadband, and many more had slower speeds than in rural areas.
The gap is most striking in upland areas of Scotland, Wales and England, but also some lowland areas. The study found 95 per cent of urban users had an average broadband speed of 6.3 Mbits/sec or above. But this speed – defined by the researchers as ‘modest’ – is out of the reach of half of users in rural areas.
Researchers say businesses could suffer, particularly farming, and the creative industries. They may have to rely on costly paper based systems. They may lose out on work. In agriculture, where animal tracking, for example is increasingly managed online, there are particular challenges.
It isn’t just businesses that suffer from this, of course. Rural households, and schools, for example, are affected too. But by inhibiting the growth of commerce poor broadband access makes depopulation more likely as young people move away and others choose not to settle in areas of digital deprivation.
Superfast broadband is increasingly touted as a key tool in levelling out the playing field between rural and urban areas. In theory, it can eliminate many of the geographical handicaps of doing business away from major cities and the central belt. However despite subsidies geared to ensuring this revolution takes place, progress in rural areas is slow and the Federation of Small Businesses in Scotland has called for immediate action to deliver faster and more reliable broadband.
The UK government claims that its rural investment programme will deliver returns of £20 for every £1 invested, creating additional jobs and boosting local economies. The Scottish Government is investing £16.5million in grants for rural community broadband projects, over and above the £410m Digital Scotland Superfast Broadband scheme.
But there are concerns over the involvement of the private sector in many of these schemes. All the contracts under the UK Government’s broadband scheme went to BT, giving the company a publicly-funded near monopoly over rural fibre optic networks. The House of Commons public affairs committee has claimed consumers are failing to get the benefit of healthy competition.
It is clear that the market will not deliver the best outcome on its own and subsidies remain a necessity. But such schemes must be effective and they need to be fast.
We report today of the reopening of the Borders railway , at a cost of around £350m. We invest similar sums in this and other ‘real world’ infrastructure. We need to view broadband networks as similarly vital.
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