Government strategy puts tech sector in recovery driving seat

Brown believes the deployment of next-generation broadband should not be left to chance

Two days before chancellor Alistair Darling's 2009 Budget, the prime minister announced a strategic plan, entitled Building Britain’s Future – New Industry, New Jobs, which aims to provide additional support for key industry sectors that can lead the UK out of recession.

That support focuses on innovation, skills, finance, infrastructure and trade, and will be reliant on the effective deployment of IT.

Speaking about the strategic plan, prime minister Gordon Brown said: "Our industrial policy is about a dialogue with business, leading to a consensus about what we in Britain need to do to face this global future."

The need for a new industrial strategy is not in doubt, with both the Trade Union Congress and business lobby group the Confederation of British Industry (CBI) arguing for concrete plans.

"Business will need the right conditions if it is to flourish after the recession and the CBI would welcome a more active government approach to help foster them," said CBI deputy director-general John Cridland in a statement released to coincide with the strategic plan's release.

A CBI spokesman said: "What's important now is that government shows action on the ground. We feel there are a number of important things in it, for instance plans for the government to stimulate technology development through procurement."

Proposals relating to the UK's network infrastructure were echoed in last week’s Budget, in which the chancellor confirmed a doubling of the main capital allowance rate to 40 per cent to support £10bn of investment in the UK broadband network infrastructure.

But does this go far enough to ensure the UK gets adequate coverage by next-generation broadband networks? Antony Walker, chief executive of the Broadband Stakeholder Group, is sceptical.

"The aim should be to provide a sufficient nudge to the market that enables it to deploy more quickly and more extensively that it would do otherwise," he said.

“The announcement on capital allowances may help to bring forward investment but does not address the challenge of extending availability beyond urban areas.”

The New Industry, New Jobs strategy also leans heavily on Lord Carter's Digital Britain recommendations.

But while Lord Carter’s universal service commitment was endorsed at the recent Digital Britain Forum by prime minister Brown, the rollout of next-generation broadband infrastructure faces significant hurdles.

Despite Brown's recent statements that the country could not leave a next-generation broadband rollout to chance, last week Lord Carter said that between 25 and 30 per cent of the UK would not get next-generation fixed line broadband infrastructure because there was “no economic case for it”.

“I think the government missed an opportunity here to commit more funding," said Ovum senior analyst and regulatory service leader Matthew Howett. "But this is not the end of the road – the government still has time to do something credible before Lord Carter’s final report is released in the summer.”

As things stand, IT leaders are looking at a future where almost all UK citizens can expect a minimum broadband speed of 2Mbit/s, with faster services available in urban conurbations where the two main carriers – BT and Virgin Media – see the best chances of making a return on their investments.

Whether that patchy deployment is robust enough to transform the British economy remains to be seen.