The Chancellor wants to make the UK a "world leader in 5G"

5g | Marie Escaich on January 11, 2017

With productivity at the forefront of everyone’s minds, it’s a clear corner to back – the productivity gap between the UK and other G7 industrial nation members has widened to its worst level since records began, according to government figures.

While our past governments have sought to address our poor productivity performance through different mediums including transport, housing, skills, and finance, Chancellor of the Exchequer Philip Hammond is now looking at the potential of technology to close the productivity gap.

By investing £4.7 billion in research and development and with new R&D tax credits, the Chancellor is hoping to stimulate growth and solidify the country’s position as a global leader in innovation.

Additionally, the recently announced £1 billion investment for the roll out of full-fibre connections and 5G communications in the UK also demonstrated the Chancellor’s grasp on the importance of digital connectivity as an enabler for growth across all industries.  

The latest figures published by the the Office for National Statistics (ONS) in the E-commerce and ICT activity report indicated that only six percent of UK businesses have broadband speeds above 100Mbs, despite digital businesses contributing 10 percent of the GDP to UK economy – the greatest of any nation. And fast, resilient connectivity will only become of greater importance as more businesses look to technology to drive greater productivity.

Echoing digital minister Matt Hancock’s call for full fibre, the Autumn Statement marked an end to the government’s policy of supporting BT Openreach’s FTTC service (Fibre to the Cabinet). This service, which only connects the fibre network to the cabinet outside of a property and then uses the existing network to deliver broadband into the property - which is, more often than not, run on an outdated and asynchronous copper network - significantly reduces speeds and rarely meets businesses’ needs.

The government’s new drive for full fibre, otherwise known as FTTP (Fibre to the Premises), connects property directly to the exchange with fibre optic cables. This helps ensure companies get the reliable, fast speeds that they’re paying for.

A transformation certainly won’t happen overnight. However the £1bn investment is a positive starting point, while the focus on enabling smaller providers to succeed should increase the number of providers, improve services and reduce the cost for consumers in the long term.

The 100 per cent business rates relief for new full-fibre infrastructure will also be key to achieving this. This will enable smaller providers, such as Gigabit, Hyperoptic and Telecom ability to grow.

The government has also made clear its ambitions to be a global leader in 5G. However, without a consensus on the best way to approach it, the UK must ensure that despite retiring from the EU it doesn’t lose out on the benefits of Europe’s regulatory planning, such as the 5G for Europe Action Plan and potentially fall behind.

With its focus and investment in digital infrastructure to improve the country’s productivity, the Autumn Statement has demonstrated the government’s practical understanding of the needs of the modern business. How the government will fare against its plan will be another matter, but it has laid the foundations for a more mature approach to technology and for harnessing its potential.

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