18 May 2024

Unlocking Britain’s digital potential

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With the UK ready to bet on burgeoning technologies such as AI, 5G, and IoT tools, a solid digital infrastructure has never been more important, says Finbarr Toesland

Hardly a month goes by without the news of a new technological development that is heralded to be genuinely transformative. From advanced chatbot ChatGPT being able to write everything from poems to essays, to innovations in quantum computing showing great promise, developing technologies have the potential to change society as we know it.

But underlying all of these advances is little-thought about digital infrastructure. These foundational resources form the backbone of all digital services that businesses and people rely on every day. A combination of physical assets like data centres and virtual technologies, including software platforms make up the digital infrastructure of organisations, with essential technologies like AI and cloud computing also playing a central role.

The UK government is also pushing for new investments to be made in the UK’s digital infrastructure. As part of his long-term vision to grow the economy, UK Chancellor Jeremy Hunt highlighted digital technology as a key growth area for the country and called on firms to invest in the UK, which he hopes will become the next Silicon Valley.

Levelling up

Out of all the projects that seek to enhance digital infrastructure in the UK, developing telecom networks is potentially one of the most important areas to focus on. In the globalised world of today, where a great deal of communication is carried out digitally, ensuring that 5G and full fibre reach their full potential will see a range of new business applications emerge.

For Sophie James, Head of Telecoms and Spectrum Policy at techUK and overseer of the UK Spectrum Policy Forum, telecoms networks are central to the growth, prosperity and innovation potential in the UK. “We know that full fibre will deliver higher and more Unlocking Britain’s digital potential With the UK ready to bet on burgeoning technologies such as AI, 5G, and IoT tools, a solid digital infrastructure has never been more important, says Finbarr Toesland Outside of major cities, 5G coverage is patchy at best reliable fixed connections to premises and businesses which will help drive greater economic growth. That will deliver real benefits to local areas – not least those which are levelling up priority areas – with nationwide coverage boosting productivity by over £50bn and bringing up to one million people back into the workforce,” James says.

Commonplace communication issues that hamper business activity, such as slow internet speeds and Zoom calls that cut out due to drops in connection, may be minor issues on a daily basis, but they add up over the years and can contribute to reducing productivity.

Many forward-thinking UK businesses are held back from incorporating innovative digital solutions as a direct result of substandard internet speeds and low levels of 5G and full fibre coverage. For businesses in sectors such as manufacturing, IT and healthcare, the lack of more advanced digital infrastructure can result in these companies needing to set up more advanced projects in different countries where infrastructure is more geared towards innovation. Progress has been made in recent years on the UK’s 5G roll-out, with recent Ofcom statistics finding that around half of the UK is covered by 5G. Yet, outside of major cities, 5G coverage is patchy at best, with rural areas usually not having access to 5G.

Lorraine Wilkinson, Regional Vice President, UK at Equinix, a global digital infrastructure firm, agrees that the implementation of high-speed 5G networks is critical for connecting businesses and enabling innovation across all industries.

“With the growing adoption of and reliance on technology, UK businesses must prioritise cybersecurity measures to protect its digital assets and sensitive information. Those that have adopted a digital-first strategy and invested in a robust, future-proof business model are well-positioned to succeed in today’s fast-paced and constantly changing digital environment,” says Wilkinson.

In late 2022, Equinix announced a major £179m investment in UK digital infrastructure, bringing the total amount invested by the firm in the UK to over £1bn. As part of this funding, a new data centre called MA5 has been opened in Manchester and two of its International Business Exchange sites in London called LD7 and LD8 have been expanded.

Even with a great deal of challenges facing UK businesses, including continuing supply-chain issues, increasing costs and geopolitical instability, the Equinix Global Interconnection Index 2023 predicts that overall interconnection bandwidth in London is expected to achieve a 43% annual growth rate over the next two years.

Working with Europe

From tapping into the expertise of skilled staff on the continent to forming collaborations and partnerships that can benefit both the UK and Europe, European nations and companies still play a vital role in supporting the digital infrastructure ambitions of the UK. In a post-Brexit landscape, it may take more effort on the part of businesses to set up international partnerships, due to red tape and regulatory barriers, but they still can have immense value.

“European companies can provide much-needed funding for advanced digital infrastructure projects by investing in the UK. European nations and companies can share their expertise in areas such as data centre design, cybersecurity, and AI to support the UK in realising its digital infrastructure ambitions,” says Wilkinson.

While foreign investment into the UK’s digital infrastructure is always welcomed, according to Séamus Dunne, Managing Director UK&I of Digital Realty, a multi-billion-dollar firm that is a global leader in data centres, the UK has built up a reputation for being a leader in digital innovation. “When it’s not an innovator, it’s normally a first adopter, and vice versa,” adds Dunne. “Where other nations adopt a more conservative approach to business and technology, the UK is willing to take risks, which is why it’s considered to have one of the most advanced digital economies in Europe,” he adds.

Hyped digital innovations clearly attract a lot of interest and investment. But, it’s equally as important to ensure that the backbone of digital infrastructure, including data centres, are not forgotten about in favour of the latest technology. “These dataled technologies only work if the right digital infrastructure is in place to support them, which is why we need to be focusing investment in areas like energy efficiency and networking, too,” says Dunne.

Central challenges

Maintaining a talented and skilled workforce is proving a challenge for most enterprises across the world. Without the backing of staff who can build on the promise of technological innovations, little progress can be made to achieve the full potential of digital infrastructure. “Therefore, as the nation continues to develop and adopt new technologies, it’s imperative that we simultaneously work to build an ecosystem of skilled workers who are passionate about building the digital foundations of tomorrow,” says Dunne.

According to a report commissioned by Amazon, digital technology has the potential to grow the UK economy by £413bn by 2030. Of course, this figure can only be reached if the success of firms in the digital technology ecosystem continues and investment is increased. The same report finds that a great deal of UK enterprises haven’t even embraced simple digital technologies, with more than 4 out of 10 firms not using digital tools to track orders or inventory. For the most digitally intensive businesses, nearly two thirds find it hard to find staff with the right mix of digital skills, leading to slow growth and higher costs.

While the potential of digital infrastructure to transform businesses across the UK is well-known, not enough work is being done to ensure all companies benefit equally from technological innovation.

For Wilkinson, SMEs need more funding to upgrade their digital infrastructure. A lack of skilled workers that are able to work with advanced technologies and growing levels of cybercrime are also hampering the value that digital infrastructure can bring. “Many organisations are still not equipped with the necessary tools, skills, and digital infrastructure to fully leverage the digital opportunity. Therefore, the focus must be on increasing digital adoption, strengthening digital skills, and continued investment in digital infrastructure to unlock the UK’s full digital potential,” she says.

Innovative disruption

Millions of jobs rely on the UK’s technology industry, which has grown faster than the overall UK economy in recent years. By taking calculated risks and betting on powerful burgeoning technologies, backed by solid digital infrastructure, cutting-edge AI, 5G and IoT tools can be used throughout the economy. Wilkinson sees there being a clear challenge around managing the huge amounts of data that these technologies produce, which will necessitate a “rethinking of IT infrastructure and an escape from legacy IT limitations to facilitate the adoption of new technologies,” she adds.

Digital twins are already making an impact on businesses in the UK and enabling firms to achieve more than was possible with digital technology just a few short years ago. “Digital twins, computer models that represent real-world objects or systems, allow organisations to simulate and optimise their operations, predict business trends, and better serve their customers. By adopting digital twins now, companies can radically change the way they do business in the future,” adds Wilkinson.

Supported by advanced digital infrastructure, the UK’s digital future can be unlocked. At a time when more and more businesses are migrating to cloud platforms and embracing digital solutions, 2023 is a perfect opportunity for firms to plan out a strategy that takes into account innovations brought about by next-generation digital infrastructure.

ABOUT THE AUTHOR
Finbarr Toesland is a freelance journalist specialising in technology and innovation.

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