As Britain languishes in the third division of digital nations, David Soskin calls for immediate action from the next government, whatever the cost.
Ten years ago the Nasdaq composite peaked at 5048.62. What followed has become known as the bursting of the dotcom bubble. The internet naysayers immediately likened the collapse to previous speculations such as the Tulipmania of 1637 and 1720’s South Sea Bubble. While 2000 did bring value destruction on a vast scale, this owed more to collapses in the telecoms sector than failed dotcoms, as corporate behemoths such as Global Crossing and Worldcom (remember its fraudster founder Bernie Ebbers?) filed for bankruptcy.
The technology revolution was not a firework which spluttered to a halt. Rather, it is an enduring part of modern capitalism that, ten years later, is transforming business at a faster rate than ever before. Much of that ‘lost cash’ from the pre-bubble era went into the creation of long-haul fibre optic systems and local networks which provide the backbone for today’s internet companies.
The tragedy for Britain is that we lag far, far behind in the digital revolution. As commentators obsessed about the latest dotcom failures, no one was noticing something much more sinister, namely the failure of the UK government to ensure that the UK’s digital infrastructure was in the premier league.
Same old story. The government yammers about ‘investment’ as the UK’s road system crumbles; rail grinds to a halt; and Heathrow’s third runway remains mired in controversy (Amsterdam’s Schiphol Airport, by contrast, already has five). Now it is high-speed broadband that languishes.
The depressing fact is this: here is a government that inherited sound finances back in 1997 and which has been in power for almost the entire duration of the commercial internet, yet in a global study made last year of the quality of broadband, Britain ranked only in the third division of nations, not only behind super-performers such as South Korea, Japan and Sweden but even countries such as Greece and Portugal.
Headline broadband penetration of nearly 100% as dial-up finally shrivels away sounds impressive but lying behind this are the grotesquely slow speeds, even in city centres, let alone the rural areas which depend so heavily on BT’s ancient copper wire network.
The effect for business is dreadful. Firstly, Britain is a natural source of digital talent; but it is hard to pioneer state of the art technology when the domestic infrastructure is so poor (is it any wonder that the Germans make great cars precisely because they have a fantastic autobahn network?).
Secondly, the internet is a great way for businesses to save money and market themselves effectively, and for small businesses to compete with corporate giants. Apparently there are currently 1.5 million UK businesses which do not even have a website. And, thirdly, we are simply preventing so many potential users from obtaining all the great services that the internet provides (not just the ability to communicate effectively online but to be able to research and buy products). This makes us more akin to a third world digital nation than one properly prepared for the 21st century.
One can only speculate why the Government has failed so dismally. Perhaps it was because the MPs themselves, isolated in their Westminster bubble, had little insight into the digital revolution engulfing the world. The next government will need, in the middle of our economic slump, immediately to find the money to help the private sector to sort it out. The private sector alone cannot do it: that is the lesson of South Korea and Japan. In the immortal words of NASA Flight Director Gene Kranz who helped to save Apollo 13, “failure is not an option”.