The National Infrastructure Plan: Communications and Intellectual Capital

Communications and Intellectual Capital

18/12/2013 Written by: Philip Bates and Robert Moyser

In December 2013 the UK Government published its latest National Infrastructure Plan, and in response we're posting a series of blogs which highlight those aspects that caught our attention. In our third blog we look at what the plan terms Communications and Intellectual Capital (also sometimes termed Science and Innovation), both of which are relatively small in overall value terms, with a total combined pipeline of £15,250m (about 12% of the planned spend on transport).

Although these sectors are very small in comparison to energy and transport, many feel that whilst the first two sectors help maintain the status quo, it is these two smaller sectors which have the potential to redefine the future of this country.  Encouragingly it would appear the government shares this view, describing digital communications as “an increasingly significant enabler for economic growth” and with science and innovation “at the heart of the government strategy for promoting prosperity, growth and social wellbeing.”

Despite this acknowledged importance, the plan highlights the dilemma all governments face in this sector, namely how much is delivered through an appropriately regulated and motivated private sector and how much should government deliver itself? To date the government has adopted the principle that it should only intervene where there is limited commercial viability or where some pump priming is required on new technologies and initiatives.  This has manifested itself in what we feel is a lack of clarity. For instance, in terms of metrics how is the government actually measuring the broadband poverty which it claims needs addressing in more remote areas?

While we are doing reasonably well in comparison to our European neighbours when it comes to digital communication, this situation reverses in contrast to the number of high-tech economies in Asia.  The recent Akamai State of the Internet report suggests that in terms of average connection speed the UK  ranks 10th out of 129 countries at 8.4mbps, well ahead of Germany at 7.3 and France at 5.7 but well behind Hong Kong, Japan and South Korea with 10.8, 12.0 and 13.3 respectively.  The same pattern emerges for average peak connection speed too.  

Probably the most positive sign to take from the Akamai report is that on all indicators we are improving a lot faster than many other countries.  However, we clearly cannot rest on our laurels, and as the plan highlights, having just rolled out 4G, and being in the middle of the superfast broadband programme, it’s clearly time to think ahead to what’s coming next.  We’re likely to know a lot more in 2014 when the government publishes its 10 – 15 year Spectrum Strategy and its Digital Infrastructure Strategy final report. 

For the first time the plan also includes for discussion Intellectual Capital investments (also termed Science and Innovation); we certainly welcome this in the new plan as in the 21st century a country’s infrastructure is more than just transport, water and power.  The plan includes a range of new initiatives including projects which aim to provide greater connectivity on ten major roads and some rural areas, smart energy meters, and driverless cars to name a few. Again, striking the balance between private and public sector funding is always going to be difficult.  However, with a pipeline of just £885m this feels like a sector with under-investment. 

There is also a lack of discussion of the role of integrated infrastructure and ways to create greater benefit by sharing infrastructure for different uses, precisely the concepts that Communications and Intellectual Capital investments should, in our view, be addressing.  For example, while we welcome some of the changes in legislation related to items like cabinets and overhead lines required as part of the roll out of new digital communications networks, a lack of effective joint utilities planning especially in cities remains the main reasons for disruption in the public realm. 

Overall, our main concerns with these sectors is the absence of how each of the infrastructure sectors are planning to utilise improved digital communications networks and related technological advances to innovate (both in thinking and solutions moving forward) and how the government is supporting and fostering this in their strategic thinking.  The plan, despite improvement on previous years, still seems overly reactive, rather than looking ahead and planning major changes to position this country in those economic sectors where we wish to be a world leader.  Perhaps, ultimately, this is not surprising given we don’t, as a country, have a national economic plan. But it does inevitably lead to the question how, in its absence, does a government prioritise between sectors as diverse as energy, transport, water, flood relief, digital communications and intellectual capital?

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