Connectivity investment could boost Scottish economy by £5.3bn
Investment in full fibre and mobile connectivity in Scotland could unlock 41,746 jobs and boost the economy by more than £5.3 billion by 2026, according to new research.
Virgin Media O2 and economic modelling experts Oxford Analytica have discovered that a stronger digital infrastructure could provide a multi-million-pound economic drive to regions across Scotland and help tackle inequality .
Areas set to see sizeable economic uplifts include Glasgow city region (£1.24bn), Edinburgh and south east Scotland city region (£1.08bn), Tay cities region (£463 million), Aberdeen city region (£440m), Ayrshires (£182m) and south of Scotland (£161m).
The findings are revealed in the “first” Digital Connectivity Index, which uses thousands of Organisation for Economic Co-operation and Development (OECD) data points to measure how individuals and organisations can connect with one another and the rest of the world through high-quality internet access.
The index assesses the quality of connectivity infrastructure across OECD countries and finds the UK is currently ranked joint eighth out of 24 OECD countries publishing complete digital connectivity datasets – well into the top half of countries scored and just ahead of Germany, Portugal and Ireland.
The Digital Connectivity Index also reveals how upgrading mobile and broadband networks can support economic growth and help the country to level up.
According to the study, if the UK were to become the OECD leader, it may unlock consistently higher gross domestic product (GDP) growth rates (0.88%) every year, equating to £69.78bn in extra GDP and 510,000 jobs between now and 2026.
Lutz Schüler, chief executive of Virgin Media O2, said: “The importance of digital connectivity to Scotland’s future couldn’t be clearer, and the role we play as an industry more profound.
“With economic growth, new jobs and a fairer society at stake, we’re already taking a lead with a commitment to invest £10 billion over the next five years.
“We’re turning up the dial on the national recovery and helping the country to climb up the international connectivity league tables to create a brighter, more prosperous future for every corner of the UK.”
Scott Urban, senior advisor at Oxford Analytica, said: “The Digital Connectivity Index shows telecom’s key contribution to levelling-up through spurring higher growth and creating new jobs.”
The research has been commissioned by Virgin Media O2, as part of its mission to “upgrade the UK”. The company has committed to investing £10bn over the next five years, with plans to expand 5G coverage to cover 50 per cent of the population by 2023 and upgrade its entire fixed network to full fibre to the premises by 2028.
This is alongside the company’s continued gigabit rollout, which will see 1.1gbps speeds delivered across its entire broadband network in Scotland before the end of the year, and its mobile network upgrade – providing a 4G upgrade to 11,600 postcodes in Scotland since the start of the year, including Royal Botanic Gardens Edinburgh, University of Glasgow, St Johnstone’s McDiarmid Park and Musselburgh Racecourse.
Overall, Denmark came top of the index by scoring 86 out of 100. The small nation is considered a leader in the connectivity dimension, with more internet users than any other EU country.
Addressing the digital divide
Whilst the research shows that the UK has improved its level of digital connectivity well above the OECD average between 2011 and 2019, addressing the UK’s digital divide is “key to making further gains”.
The findings show that people living in more deprived areas of the country, in rural areas and lower income households are most at risk of digital exclusion.
As many as one in 10 of those with a household income of £15,000 a year or less do not have an internet connection at home, whilst those living in rural areas are twice as likely to report suffering from poor internet connections as those living in urban areas.
To help address digital poverty, in July 2021 Virgin Media O2 played a leading role in launching the UK’s “first” National Databank – providing free mobile data to people in need. Through the databank, 7.5m GB of O2 mobile data will be donated to help over 200,000 people get connected by the end of 2023, with other mobile operators also able to contribute data to the platform.
This is alongside Virgin Media’s Help for Home Learners initiative and O2’s Community Calling programme which provided data and devices to support vulnerable customers during the Covid-19 pandemic, and Virgin Media’s Essential Broadband service for customers who are struggling financially and receiving Universal Credit.
Through its ‘project lightning’ programme, the company is also expanding its network to reach more communities nationwide.
This is as well as collaborating with government and other mobile providers to deliver a Shared Rural Network (SRN) which will see 4G coverage rise from the current level of 66 per cent to 84 per cent; all operators cover at least 90 per cent of UK landmass and 4G services reaching an additional 280,000 premises and 10,000 miles of roads by 2026.