Stand up and be counted

We want to make sure that the UK is home to the most dynamic and competitive communications market in the world,” says The White Paper, A New Future for Communications. “The most extensive and competitive broadband market in the G7 by 2005,” boasts UK Online: The Broadband Future, March 2001. These quotes from recent Government publications emphasise a determination that the UK should not miss out on the communications revolution taking place before our eyes. But what is the reality? And why is broadband important for manufacturing? Before we address these points we should define broadband. First, it is not a technology: just as energy involves several sciences, broadband encompasses a number of technologies, including cable, wireless, satellite and Digital Subscriber Line (DSL), which together enable high-speed communication. The key is the capacity for business or individuals to communicate mass information (video, pictures, images) enabling e-business to take place. The bandwidth required depends on the application and may change. For many small businesses the first essential step will be simply for them to have an ‘always on’ Internet connection fast enough to take advantage of e-mail and web-browsing. But what relevance does this have for businesses in manufacturing today? Everything. For as the research in our e-business report (The Quiet Revolution) showed, almost all businesses (98%) will be progressing in their adoption of e-business in the next two to three years. Across manufacturing we identified around 13% of businesses as e-pioneers (against a benchmark for all business of 21%) with 46% e-followers (benchmark 43%) and 41% e-laggards (36%). More importantly, both for the businesses and their broadband requirement, over half of the e-laggards (currently only doing e-mail with limited IT integration) will have progressed to e-followers or e-pioneers in the next two to three years. In other words these companies (many of which may not even have ISDN) will be wanting to undertake e-business activities (such as customer relationship management (CRM) or e-procurement) which will require broadband connections. This is only the start, because broadband will allow many other services, such as video conferencing, application service provision (ASP), video streaming and electronic trading – which are simply not feasible with the narrow-band connections many businesses have today. So having established a real potential demand for these services, what’s the problem? If business wants to do e-business surely the market (the suppliers of broadband services) will respond? Unfortunately it’s not that simple. For in broadband, in contrast to much of e-business, there is already a market-failure. While in London and some other population hubs (the M4 corridor) broadband, especially via DSL, is already a reality, in many parts of the country it is not. By the government’s own predictions some 20% of the population will still not be covered by broadband by 2003 – around 45% for the South West and Wales. Some of this is down to technology, in that it is difficult to either cable-up or provide DSL links from exchanges to many rural populations. But a fair proportion is due to the fact that telco providers do not see sufficient demand to provide the facilities. So what can be done? In the first place the Government, through its recently established Broadband Stakeholders Group, is exploring options ranging from ‘clustering’ of public and private sector demand, to financial incentives and research. A number of working groups have been established and the CBI is involving its members (both IT suppliers and users). Secondly though, and of equal importance, is the attitude of the manufacturing community itself. If our survey is anywhere near correct, and there really is that pent-up level of e-business activity developing, then the telecommunications companies need to hear about it. Tell them you will need broadband links (and not just ISDN); and tell them what services you want to be able to develop. If we are to improve the outlook for broadband connectivity to ensure the take-up of e-business in the UK and thus fulfil those White Paper promises, then government, users and suppliers are going to need to work much closer together. We cannot afford to fail.