Investment in digital infrastructure in Greater Birmingham

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Investment in Digital Infrastructure in Greater Birmingham Briefing July 2022

Connect. Support. Grow.


Introduction Digital infrastructure is critical to connecting organisations and individuals across Greater Birmingham with opportunities locally, nationally and globally. Secure digital infrastructure enables people to access the services they need to work, travel and live. Indeed, the digital world dominates British society with more people using the internet than ever before. Office for National Statistics (ONS) data shows how 90% of adults in the UK were recent internet users in 2018, compared to 92% in 2020. This briefing provides an outline of the importance of digital infrastructure, whilst also highlighting investment into digital infrastructure in the Greater Birmingham region and the opportunities this presents for businesses in the region.

Why is Investment into Digital Infrastructure important? Demand and skills The Lloyds Digital Index 2021 makes abundantly clear the commitment that British Society has to the digital world, in our professional lives and our personal lives. The report shows how in the previous 12 months, 1.5million more people were online in the UK; and the West Midlands is level with London as the region with the highest proportion of residents using the internet. The report further reveals how internet usage has increased on average by 13 hours per week throughout the pandemic. The Adults’ Media Use and Attitudes report from Ofcom outline’s similar themes. The report shows how 92% of people in the UK use internet at home and only 29% are narrow internet users (people who are carrying out one to four of 15 types of internet activity). This signifies the growing importance of the internet on the daily lives of people across the UK. It also underlines the increased demand for connectivity which in turn, highlights the need for robust digital infrastructure networks in order to support the demands of the population. Infrastructure also plays a significant role in supporting people and ensuring they have the skills to access meaningful opportunities in the labour market. Various studies reveal the challenges that industries across the UK are facing in relation to skills shortages. Data from Microsoft’s, ‘Unlocking the UK’s potential with digital skills’ report showed how 69% of UK leaders surveyed believe that their organisation had a digital skills gap and 70% expected to experience a digital skills gap in 2021. Research from the British Chambers of Commerce (BCC) supports this. In the BCC’S 2021 Workforce Survey, 30% of respondents reported shortages of basic digital skills whilst 22% said they needed people with more advanced digital skills. There are huge implications in failing to invest in digital infrastructure as a result. A report from Technation shows how in the first half of 2021, the number of advertised tech roles was 42% higher than in the first half of 2019. Further reports from Technation also highlight how vacancies in tech are climbing with more than 2million tech vacancies being advertised over the last year, which is more than any other area of the UK labour market. The need to digitally upskill the workforce has never been more critical given the acute labour market shortages we are already experiencing across the country. It is crucial to ensure the appropriate infrastructure is in place to support people in their upskilling and reskilling journeys.

The Digital Economy There are huge economic benefits to investing in digital infrastructure. As noted by the World Economic Forum, the emerging digital economy has the potential to generate new scientific research and breakthroughs, which in turn will fuel job opportunities, economic growth, and improve lives all across the world. In 2018, Government figures showed that the country’s thriving digital sector had


contributed £149 billion to the UK, accounting for 7.7% of the UK economy. According to Government figures, the West Midlands is on track to create an extra 52,000 digital technology jobs and grow the economy by £2.7 billion, by 2025. The digital economy is clearly growing and needs to be supported to grow further. Previous investment into digital has seen significant benefits. Significant progress in delivering improved digital infrastructure was made throughout the 2010’s, with superfast broadband coverage rising from 58% of UK premises in 2011 to over 97% today, as highlighted in the UK’s Digital Strategy. Furthermore, over 67% of UK premises can now access gigabit-capable broadband, whilst 92% of UK landmass is now covered by a good 4G signal.

What investment is Greater Birmingham seeing in Digital Infrastructure? The UK Government’s Digital Strategy, published in June 2022 by the Department for Digital, Culture, Media & Sport (DCMS) sets out the Government’s vision for and the actions DCMS considers necessary to making the UK the best place in the world to start and grow a technology business. This includes the following investment in digital infrastructure: • •

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DCMS is leading work to accelerate the commercial delivery of nationwide gigabit broadband and ensure rural areas are not left behind. Its aim is to achieve at least 85% gigabit coverage by 2025 and at least 99% gigabit coverage by 2030. The UK is also making progress in rolling out wireless connectivity, with 92% of the UK landmass currently covered by a good 4G signal from at least one operator. The Shared Rural Network is expected to continue to improve coverage for 280,000 premises and 16,000km of roads. DCMS has invested almost £200 million in UK telecoms innovation through the 5G Testbeds and Trials programme (5GTT). The department has also set out plans to £250 million in R&D to deliver a diverse 5G supply chain. There is also a wireless Infrastructure Strategy that will look to set out a strategic framework for the development, deployment and adoption of wireless networks in the UK.

The West Midlands Combined Authority (WMCA) is also investing in establishing a West Midlands Digital Skills Partnership to develop local people’s digital skills, attract investment and retain talent across the region. • •

Over the past two years, the WMCA has funded local residents to learn new skills for the jobs of the future, including 1,500 people who have joined digital bootcamps as a result of the Digital Retraining Fund. The WMCA has also set up the West Midlands Digital Skills Partnership to develop local people’s digital skills, attract investment and retain talent across the region. The partnership will look to identify the digital skills required across the West Midlands to attract and retain investment into the region and will oversee the development and the delivery of the wider WMCA Digital Skills Strategy.

In 2018, Birmingham was named by Openreach as one of the cities to lead the drive for ultrafast broadband, as building was accelerating to cover urban and rural communities. Openreach has been one of the drivers of broadband revolution across the UK and recently invested £47million into broadband investment, which would see the network reach a further 160,000 homes and businesses across the West Midlands. Furthermore, the West Midlands also became one of the UK’s first large-scale 5G testbeds in 2019, with Birmingham becoming one of the 5g Hubs after winning a national competition. WM5G


delivered numerous projects to speed up the launch of 5G networks across the West Midlands and Greater Birmingham in order to test, prove and scale up new 5G products and services. Birmingham City Council also recently released its Digital Strategy for 2022-2025. Within it, they outline their desire to ensure the regions technology and digital infrastructure is responsive, secure and adaptive in order to meet the changing needs of citizens and businesses across the region. Within the strategy, the council outline that they will look to: • • •

Evaluate the regions existing technology replacing it with new and up-to-date solutions, as well as trialling new technologies. The council will look to rapidly test new innovations to understand if they are going to work before formally taking ideas forward. Delivery a Cyber Security Strategy.

What does this mean for business in Greater Birmingham? Government estimates suggest that their approach to supporting the digital economy through investment into infrastructure and skills could grow the UK’s technology sector’s annual GVA by around £41.5 billion by 2025, creating 678,000 jobs in the process. It’s clear then the Government is committed to investment and they recognises the huge benefits digital growth could bring to the UK. The West Midlands region is highlighted as being an immensely strong and capable region when it comes to the digital world. From a West Midlands perspective there are numerous advantages outlined by the WMCA to the local region. • •

The WMCA highlights that the West Midlands has the fastest growing digital sector outside London and are keen to point out that the region has ambitious plans to double the industry’s economic output over the next decade. Furthermore, over the past two years, the WMCA has funded local residents to learn new skills for the jobs crucial to the future prosperity of the region. Digital engagement in the West Midlands has shot up with 97% of citizens reporting internet use within the past three months, up from 89% in 2020.

What is the Greater Birmingham Chambers of Commerce’s position on investment in digital Infrastructure? Investment into digital infrastructure is key to our region’s future. Investment should look to focus on not only the infrastructure associated with connectivity, but also look to focus on upskilling and reskilling to ensure we are able to take advantage of our region’s thriving technology sector. The WMCA region has Internationally competitive digital industries with Birmingham and Solihull excelling with data-driven healthcare technologies in particular. It is vitally important that the Government ensures it continues to support the investment of digital infrastructure into Greater Birmingham. • •

The Government must create the conditions for investment into digital infrastructure by using the tax system to incentivise firms to invest into the UK, and Greater Birmingham in particular. The Government must provide support to SME’s. SMEs should have access to trusted resources helping them access the knowledge and support they need to innovate and thrive in the digital economy. Before the pandemic, the British Chamber of Commerce’s Innovation and Productivity Survey found that 80% of firms were not aware of schemes designed to


help improve innovation within their organisation, such as Innovate UK, the Catapults, and Patent Box. There is clear need for support to be available and easy to access, ensuring SME’s can thrive in the digital economy. The Government and the West Midlands Combined Authority must ensure continued investment into digital skills, both for young and adult learners. By ensuring a strong and stable supply of talent in the region, Greater Birmingham will be a more attractive place for investment into digital infrastructure. Innovation and competition ensure that the digital world will continue to evolve. The emergence of technologies such as AI, 5G and Cloud Computing highlights the need for the Government to anticipate the changing digital economy by facilitating investment into new technologies and building infrastructure to support emerging and new technologies.

How can the Chamber support businesses across Greater Birmingham looking to invest in digital infrastructure? This briefing is part of the GBCC’s Future in Tech (FIT) campaign, which aims to support business investment in digitisation and the adoption of new technologies. Click here for further information on FIT. The campaign will feature the publication of a range of briefing papers and expert videos on topics including the Government’s Digital Strategy and what it means for businesses, investment in digital infrastructure in Greater Birmingham, cyber security and more. The Chamber has a variety of support options available to assist businesses. The Chamber’s ChamberLink Daily e-newsletter goes out to 14,000 business contacts across the region daily, providing the latest local business news, insights and tips that are of significant value to businesses. The GBCC Policy Team exists to research business views on economic indicators and key challenges they are facing, inform businesses of new policy or legislative changes which may impact them, facilitate the sharing of best practice ideas between local organisations, and engage stakeholders on issues faced by the business community in order to shape effective policy decision making. Resources produced by the team include this briefing, as part of the Future in Technology campaign, as well as briefings on topics such as International Trade, Sustainability and Skills. The GBCC are also part of a WMCA-area bid to deliver a Local Skills Improvement Plan (LSIP) on behalf of the Department for Education and have proposed that this focusses on digital skills. To ensure that you receive further information and updates on local digital infrastructure investment as soon as they are available – as well as updates on the broader work of the Chamber and its members - register to receive the ChamberLink Daily Enewsletter here.


More reading • • • • • • • • •

UK Consumer Digital Index 2021 | Lloyds Bank Adults' media use and attitudes - Ofcom info.microsoft.com/rs/157-GQE-382/images/Unlocking-the-UKs-potential-with-digitalskills_131120__v3.pdf Tech Nation Report 2021 - Tech Nation A decade of UK tech - Tech Nation People and skills report 2022 - Tech Nation UK's Digital Strategy - GOV.UK (www.gov.uk) The digital economy: what is it and how will it transform our lives? | World Economic Forum (weforum.org) Digital Transformation- Unlocking the potential of Global Britain.pdf (britishchambers.org.uk)


For more information, please contact: Kuranpal Singh Policy Advisor K.Singh@birmingham-chamber.com Greater Birmingham Chambers of Commerce

About the Greater Birmingham Chambers of Commerce We have been in business, for business since 1813. Today’s GBCC exists to connect, support and grow local businesses. We offer an array of services and initiatives to businesses Across six geographical regions and four themed divisions. From our wide range of events, international trade services, policy and marketing campaigns, to networking opportunities and media exposure, the Chamber has something for business


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