Submitted by Stian on Sun, 2012-06-17 23:11

I hear a lot of talk of the costs of deploying HS broadband. I wonder why we don't hear more about the cost of *not* investing in it.

In the UK at least, there is a lot of talk of investing in infrastructure as a way to improve the economy. A high-speed rail link costing £32bn (E40bn) is being built. A third runway at Heathrow Airport is being proposed. And there may be more on the way. These schemes all have expensively commissioned studies by economists to predict their economic benefit. Business leaders are wheeled out to explain why they are a good thing.

But arguably the benefits of ubiquitous HS Broadband are even bigger. It doesn't take much imagination to see how vastly improved transfer of information could transform businesses and public services - and create new businesses no-one's even thought of.

Unfortunately, the radical nature of what HS Broadband allows makes it harder to advocate. We can predict what a fast railway will do for the economy because it's a lot like existing railways, just a bit better. But modelling how HS Broadband might change the economy is, as far as I know, beyond what most economists can do. (We at Nesta once made an estimate based on the example of Korea, but we wouldn't pretend it's anything but very tentative.)

So how do we make the economic case for investing in an asset that could radically transform the economy for the better?

Group audience:

High-speed connections

Comments

Good point Stian,

Submitted by conder on Sun, 2012-06-17 23:31

Good point Stian,
I suppose we could make a case by talking about the cost if we don't invest...
So if we hadn't allowed the printing press we would still have monks in monasteries scribbling out the bible for us? nobody would have learned to read or write, we would just have ministers preaching the gospel to us.
If we don't invest in decent, fit for purpose connectivity the same sort of thing applies.
The cost?
Other countries take over the service industries.
They will control the cloud. They will control all data. (nobody will store data here if we haven't got upload capabilities, as it will be too slow for other countries to download from us) (it already is btw)
They will sell us their products, their content, and we won't be able to compete.
Rural SMEs will not be able to compete with urban counterparts and will migrate to cities. The countryside will stagnate.
Innovation won't happen.
How do we put a price on all this?
As you said in an earlier post, there is always a lobby for something that is understood, but there is no lobby for the future when nobody really knows what is coming.
Who could have imagined YouTube until it happened? In those days we used to turn off graphics in the web browser to make pages load, we didn't know video was even possible.

You have a point there Stian;

Submitted by penval on Mon, 2012-06-18 09:10

You have a point there Stian; the business case has not been made in a way that captures the popular imagination. Certainly here in the UK, and I would suggest in parts of Europe, there is a considerable legacy both in terms of vested interest and in terms of cultural bias as to what contributes to growth. This means that as a nation we have no problems with building railway tracks (unless it's going across our back garden) but we struggle with information highways. The railway tracks represent the industrial mentality with which we are familary but the information highway represents a threat to the established order; knowledge is devalued because it is no longer a scarcity and centralised power is challenged because of the democratised nature of distributed supply.

This doesn't mean to say that we shouldn't have HS2 (with due deference to the physical impact that it will have) nor does it mean that we shouldn't expand our air travel capacity but it should start the alarms ringing because we are not thinking about how business will, and should, be done in the future.

Our thinking needs to shift to transition thinking rather than Victorian thinking. As long as HS2 and the third runway are part of that transition strategy that's fine but the failure to invest in the next wave of infrastructure will cost us dearly when we cannot compete with the Koreas and Chinas of this world because they are competing on a different infrastructure.

For my own part I firmly believe that we should be taking a democratised approach to next generation technology. As Chris says, we are being drawn into a highly centralised economy where small numbers of corporations with control the supply. This will maintain inequality and it is a dangerous strategy which has single points of weakness; just as the large industries of the mid 20th century proved to be the weakness in the UK economy at that time. We are in danger of making the same mistakes all over again.

Agree Paul, and as Stian said

Submitted by conder on Mon, 2012-06-18 09:27

Agree Paul, and as Stian said earlier in this platform, there is a lobby of businesses for HS2 and new runways, saying that they will improve their prospects if they are built, but there is no lobby for the information superhighway because those businesses don't exist yet.

I think his quote was "As a wise man once said, in Washington (and Brussels?), 'the future has no lobbyists'."

We are the lobbyists. We have to increase our circle of influence.

Aren't we all the lobbyists

Submitted by andrew on Mon, 2012-06-18 13:15

Aren't we all the lobbyists in this case?

The difference with broadband, is that there is not an established lobbying industry, the rail and airports have a good few decades headstart in this respect.

We have done a good job at convincing the 'internet' industry, that good low latency reliable connectivity is good, the same needs to happen with other industries.

For example, business parks, many still being built with no concern from developer over connectivity, the assumption is BT will do it, and is a lot lower down the priority list than making car park look pretty.