2009 in review: Rising to the Digital Britain challenge

John Higgins: IT can deliver much needed growth to the UK economy

It is just possible that we could look back on 2009 as a turning point in the technology industry in the UK. One of the most significant events of the year was the publication of Lord Carter's Digital Britain report, which outlined plans to create a competitive digital economy in the UK.

His recommendations on opening up access to broadband and improving digital literacy were warmly welcomed by the industry. But, more importantly, the report upped the ante for policy makers on all sides. And, while Intellect is relatively neutral on what policy gets us to a truly digital Britain, I hope all parties will go into the election with that destination.

Most of what Lord Carter recommended, plus some beefed up measures to prevent illegal file sharing, has been taken up by the government, and the Digital Economy Bill, published in November, is currently making its way through parliament.

Downing Street has also committed to providing universal service for broadband across the UK, and has plans to introduce a 50p a month levy on phone lines before the election to help pay for next-generation access for the final third of households that the market cannot reach alone.

Access to high-speed broadband across the UK will be vital for our competitiveness. It will not only create a platform for innovative new businesses, but will enable the new generation of services and products to be delivered to citizens and consumers.

Meanwhile, a pervasive universal service, even at a relatively low speed, allows public services to be delivered online in ways that are more personalised to the user and at less cost to the tax payer in straitened times.

However, the present political landscape, and the prospect of a general election, have introduced an element of uncertainty into this picture. While Labour has favoured investing directly in network deployment, the Conservatives appear to be more focused on finding market mechanisms to leverage private sector investment and encourage competition across the infrastructure.

Only Gordon Brown knows when the general election will be called, so we cannot be sure whether the legislation to support the 50p levy will pass before parliament is dissolved. Nor can we be sure of a clear victory for one party or another, as the two main contenders are increasingly close in the polls.

A hung parliament operating in a recession would make it seriously difficult for any party to push through a major infrastructure project of this nature, leading to further uncertainty and delay.

The most obvious challenge for 2010 will be bringing Britain out of recession and restoring growth in the economy. While there is an expectation that we will see a return to growth in 2010, Bank of England governor Mervyn King has recently predicted that it will be late 2011 before the UK recovers to the level it was at before the recession.

With a chastened and more highly regulated financial services industry, politicians will be searching for signs of growth and recovery in new sectors. It is some comfort for the ICT industry that a recent Gartner survey of senior business executives found that only a small percentage were planning to cut what they spend on IT in 2010, and that nearly two-thirds see ICT as having a key role in post-recession strategies.

We must be able to talk up the opportunities that our industry can offer in the run-up to a general election and in the months following. This will be vital to securing policies that will help with research in intensive industries like ICT, which are reliant on a highly skilled and mobile workforce.

But economic growth will not be the only challenge in 2010. The fight goes on to reduce the UK's carbon emissions, and limit the effects of climate change globally, whether or not an agreement is reached in Copenhagen at the end of 2009.

The ICT industry has its part to play in minimising our use of resources through measures such as improved energy efficiency in our products and services. However, we can make a much greater impact if we focus on ICT as a way to enable people across the world to do business in a more resource efficient manner.

Analyst firm McKinsey estimates that 7.8 billion tonnes of CO2 could be saved by the use of ICT in buildings, power, transport, manufacturing and teleworking. The Global eSustainability Initiative believes that the intelligent use of ICT could reduce overall emissions by 15 per cent.

The government has recently announced the intended rollout of smart meters across the UK. The project is expected to see 47 million meters installed in 26 million homes by 2020, at a cost conservatively estimated at £8bn. Smart meters will enable consumers to save on their bills and reduce their carbon footprint by viewing in real time the cost of the appliances they are using.

Smart meters are, of course, the first step in a journey towards the smart grid, and roughly $1.3bn (£801m) in venture capital was invested in the smart grid sector between 2005 and 2009. Just over $105m (£64m) of that was invested in the first two quarters of 2009.

It is a great opportunity for the industry, but the technological challenge involved in this project is immense. Work will begin in earnest in 2010, but reassurance will be required to ensure that customer information is securely stored, that meters meet interoperability standards and are future proofed, and that the installation procedure is sensibly structured and co-ordinated.

The outlook for 2010 is mixed, but there is reason to be cautiously optimistic. As a nation, we face some enormous economic and environmental challenges, but our sector is well placed to rise to those challenges.

Decisions taken over the next 12 months will be critical in delivering upgraded infrastructure for next-generation access to broadband, and will be vital in ensuring the competitiveness of the UK's technology industry and delivering much needed growth to the economy.