1 October 2020

Upwardly mobile: fast 5G rollout offers the UK a huge prize

By Archie Hill

Build, build, build.

As a slogan, with its distinctive tone of boosterism, it sums up Boris Johnson’s approach well. A focus on infrastructure has always been at the heart of his other great slogan-cum-vision, ‘levelling up’, and will be all the more so in the light of coronavirus and its economic impact.

It’s an agenda that goes beyond simply building more houses (or bridges). The Government has recognised, rightly, the importance of digital infrastructure in driving growth as part of our economic recovery, with an explicit commitment to gigabit connectivity around the country by 2025 and most of the UK having 5G coverage by 2027.

That commitment seems all the more prescient given that, since it was announced, swathes of the economy have had to adapt to a solely digital existence, with most businesses operating remotely. As the UK becomes more reliant on these mobile networks, the need to upgrade and expand our digital infrastructure becomes ever more pressing. But, as a CPS report published today makes clear, the Government’s 5G ambitions are looking precarious before they are even off the ground.

Upwardly Mobile, written by the CPS’s Head of Business, Nick King, together with another former government adviser, Alex Jackman, looks not just at the real opportunity of 5G in driving growth, but also the obstacles that will have to be overcome in order to harness this potential. 

5G is not just about faster streaming on your phones: if delivered with sufficient speed and scale, it can give a new lease of life to those industries and areas that have suffered the most during the pandemic crisis. There are more than 9,000 manufacturing firms spanning the areas of the north of England and the Midlands that constitute the fabled ‘Red Wall’. The report shows that with proper 5G coverage, those firms could collectively generate an additional £161m in annual turnover by 2027. Extrapolated to all manufacturing firms across the UK, that would mean an extra £5bn annual turnover.

But there are further gains to be delivered, as digital transformation could underpin a wider, longer-lasting economic transformation. Virtually every sector of the economy, from planning and construction to Agritech and beyond, has the potential to unlock greater productivity through digital innovation. The key point that this research makes clear is that the scale of these gains depends entirely on the speed with which 5G infrastructure is developed. If, for instance, the Government were to exceed its current ambitions, and extend 5G coverage to roughly 64% of the population by 2027, rather than the current target of 51%, an extra £7.7bn would be added to our economic output.

The UK has been at the forefront of every previous industrial revolution, and has the potential to be so again now. But first we must rise to the global competition, which is immense: China alone will have completed half a million new 5G base stations this year. South Korea’s three major mobile operators have agreed to invest $22 billion over the next 18 months to boost 5G infrastructure across the country. The prize of a wide-scale 5G rollout is clear to see, but there is much to be done if we are to claim it, not least given the Government’s eminently justifiable decision to strip Huawei from infrastructure development.

The CPS report shows that the deployment of previous 4G networks in towns and rural communities was too often held up by local disputes and land laws that are not fit for purpose. If the Government wants to avoid the same thing happening with 5G networks, then it must urgently reform the Electronic Communications Code, which governs the relationship between digital infrastructure providers and landowners. Described in one judgment as ‘one of the least coherent and thought-through pieces of legislation on the statute book’, the Code must be updated to facilitate digital rollout, supported by interim, non-legislative interventions to speed up agreements.

There is also a real need for stronger public sector leadership on 5G deployment across national planning frameworks and local development plans. Now is the time for a proper, concerted effort across the four nations of the UK, committing to a review of planning rules, with regard to digital deployment, and for local plans to give digital infrastructure more attention. This includes working with the National Infrastructure Commission to coordinate national and local infrastructure programmes more effectively. Every failure to provide better coverage not only presents an immediate opportunity loss for local businesses and consumers, but also has knock-on effects for the whole economy.

These are just some of the small steps outlined in the report, though they have the potential to unlock big benefits. Digital networks and services have helped the economy and the country as a whole to mitigate the effects of the pandemic. How quickly and efficiently we allow the private sector to invest in improving these networks through 5G capability will determine the speed of our recovery.

If the Prime Minister is serious about demonstrating his commitment to boosting infrastructure, as well as delivering growth and productivity increases across the UK, he could leave a real legacy: a digital infrastructure fit for the future.

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Archie Hill is a Researcher at the Centre for Policy Studies.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.