‘Digital Britain’ architect outlines the size of the prize for Ireland’s economy

10 Sep 2009

Gordon Brown’s former head of strategy, Lord Stephen Carter, says timing is important for Ireland.

He is one of Europe’s most accomplished telecoms executives and the author of a strategy that will see our nearest neighbour, the UK, position itself as one of the world’s leading digital economies.

In fact, UK Prime Minister Gordon Brown valued his strategic insight so much that in order to have his chief of strategy and principal adviser at 10 Downing Street made a minister, and since he was not an MP, he had him created Baron Carter of Barnes in the House of Lords.

Lord Stephen Carter, who recently resigned from his post following the publication of his Digital Britain report during the summer, is behind a far-reaching plan to apply a 50 pence sterling tax on every copper line in the UK to raise enough money to ensure universal fibre broadband coverage by 2012.

The initiative driven by Carter has gained significant government backing, bolstered by a belief that increased digital participation will be key to building a 21st-century knowledge economy.

In other words, the UK has firmly staked its claim to be a world leader in the digital economy, as it strives to “reap the benefits of this rapidly transforming sector.”

The Digital Britain plan unveiled by Carter calls for universal access to today’s broadband by 2012 for everyone across the UK.

It also recommends the creation of a fund for investment in the next generation of “super-fast broadband” to ensure it is available to the whole country, not just some of it. A super-fast broadband strategy in South Yorkshire, for example, aims to deliver 25Mbps to every home in the region.

As well as instigating plans for a digital radio upgrade in 2015 and accelerating the next generation of mobile coverage and services, the plan proposes a new role for the telecoms regulator Ofcom to carry out a full assessment of the UK’s communications infrastructure every two years.

The plan includes research, which suggests that up to 700,000 new jobs may be created in the UK if a nominal £15bn investment in ICT is made. Some 340,000 of these new jobs would be in small businesses.

The plan has achieved strong political backing. According to the UK’s Prime Minister, Gordon Brown: “Digital Britain is about giving the country the tools to succeed and lead the way in the economy of the future.”

Born in Scotland, Carter attended Harvard Business School’s Advanced Management Programme in 1997 and, in 2000, he became chief operating officer of cable TV company NTL. He presided over NTL’s Chapter 11 bankruptcy protection proceedings and left the company at the end of 2002 with a £1.7m sterling payoff.

In 2003, he became the first chief executive of UK media and telecoms watchdog Ofcom, while in 2006 he became the head of one of the world’s biggest PR companies Brunswick, which counts BP, BT and British Airways as clients.

Carter describes the move to the digital economy as a “generational moment” that economies – if they are truly smart – can’t afford to ignore.

Firstly, it’s about economic regeneration. “It’s about infrastructure capability across the board. You see this when decisions are made about new airports, the location of new international linkages, you see it in the expansion of ports and you see it with high-speed rail links. And you see it very clearly with digital connectivity and technology infrastructures.”

He agrees with sceptics that no one for sure could know the size of the digital prize, but argues: “I think you have to take a view of the counterfactual. What’s the size of the disadvantage if you don’t do it? The pre-Obama administration in the US did an economic analysis around the gains in terms of jobs and economic productivity and said that for every $1 invested there would be a $10 return. But you see, I don’t think you can look at technology and infrastructure or indeed the whole ICT sector on its own. If you are taking it from a country perspective, this is what the Irish Government is seeking to do.

“What we tried to do with Digital Britain was find out what it means for education, training, broadband adoption, levels of social inclusion and exclusion and other factors like corporate taxation. But one thing was very clear, if your country doesn’t have the technology core infrastructure, there’s going to be a major gap in your economy.”

Marshalling the forces necessary from the broadcasting world to the ICT industry in the UK wasn’t especially difficult. “Like in most things in life, timing is important. There was a significant desire amongst most of the constituents to have a co-ordinated strategic approach from government.”

Carter believes different countries will have alternate approaches. For example, Australia is investing up to $8bn in putting a fibre network across the whole country, 50pc of which will be funded in cash and the remaining 50pc from the equity markets.

“The conclusion we came to was, rather than doing what the Australians were doing, we needed some pump-priming finance and we felt that the best way was a nominal levy on landlines to fund the swap out of copper for fibre. There are other solutions, but it was important for us to be an example of a very targeted solution.”

Looking at Ireland’s circumstances where a small population is spread out over a large landmass, making the economies of telecoms investment difficult, Carter agrees: “In one sense, Ireland has more in common with Australia than it does with Britain.”

But he warns how a universal solution to broadband is necessary.

“It would not be acceptable for Dublin and Cork to be well provided for and for the rest of the country not to be. Ireland needs to find solutions that are cost effective and make use of the best-available technologies. It may indeed be unfeasible to have fibre to every home.

“But I do think that you have to start asking yourselves the question: do you believe that this is a universal or near-universal service, so that if you are running a services-based smart economy you need to maximise the chance of everybody being able to access digital infrastructure?

“My sense is that Ireland has already answered this in the affirmative.”

Lord Stephen Carter will be a keynote speaker at the forthcoming Telecommunications and Internet Federation (TIF) conference on 21 September at Dublin Castle. To learn more, go to www.tif.ie.

Photo: Lord Stephen Carter is the architect of the UK’s visionary ‘Digital Britain’ strategy, which could yield more than 700,000 technology, creative and media jobs. Irish policy-makers would be wise to take note.

By John Kennedy


John Kennedy is a journalist who served as editor of Silicon Republic for 17 years