Ofcom's report on SME access to broadband underlines the importance of digital infrastructure to city economies.
Ofcom, the independent regulator for the communications industries, has recently released a new report warning that around 400,000 small and medium sized businesses (SMEs) in the UK are missing out on access to superfast broadband.
The importance for city economies of addressing this issue shouldn’t be underestimated. As our Small Business Outlook 2015 report highlights, access to broadband is a major factor which affects where small businesses in the most innovative ‘new work’ industries in the creative, digital and professional sectors, choose to locate.
These types of SMEs are becoming increasingly important to cities and the economy, as they play a key role in boosting employment, productivity and wages. But they are also concentrated in particular cities (such as London, Cambridge, Reading and Milton Keynes). This is because certain conditions help them to thrive – including broadband infrastructure, which is especially important for digital firms.
In Brighton, for example, which is one of the leading UK cities for digital SMEs, more than 4 out of 5 postcodes have access to superfast broadband. In contrast, Barnsley has one of the lowest concentrations of digital SMEs, and just over half of postcodes in the city have superfast broadband. This chimes with the recent review by the What Works Centre for Local Economic Growth, which found improving small businesses’ access to broadband can improve their productivity and take on more jobs, especially for SMEs in cities and in the digital sector.
Almost all modern businesses use the internet in some way, but superfast broadband is especially important for some of the most productive and innovative sectors of our economy, such as digital. The map below highlights which places have good superfast broadband coverage, and where it is less widely available. Addressing these shortages will be crucial in supporting ‘new work’ SMEs to thrive, and boosting jobs, wages and productivity in UK cities.
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