Phone pen

The British economy could receive a £1.5 billion boost by 2020 if as few as 30 towns across the country are given access to improved digital infrastructure and tech, according to a new report by O2.

The report, Rebalancing Britain: Inspiring thriving Digital Communities, also claims that digitisation can be central to transforming towns outside of London and the South East, and play a major role in the government's efforts to create a 'Northern Powerhouse'.

The report is based on O2's Digital Communities pilot with St. Helens Council between October and December last year. It used technology to tackle poor productivity levels among local businesses, address digital skills shortages and improve access to connectivity.

In the long-term, O2 claimed measures included in the pilot could inject an additional £46.3 million to the St Helens economy by 2020 - representing a 10 percentage point increase on the area's current forecast for growth. Based on the pilot, the area's growth will be driven by increased job creation, workforce productivity and supply chain multiplier effect.

The whole and retail industries (34%), business support services (22%) and professional services (7%) will see the biggest growth in new jobs, driven by digital tech.

O2 estimates that replicating the pilot in just eight towns in the North could boost the Northern Powerhouse economy by £410m by 2020, helping to close the gap with the South. In the Midlands, implementing the measures in just six towns could add £351m to the economy.

How towns can take advantage

Following the pilot, O2 has issued a series of recommendations for businesses, central government and local authorities to help digitise the UK's towns and drive sustained growth across the country.

  • Digital strategy - Every local authority must have a digital strategy. With smartphone ownership doubling in the last five years, O2 says local authorities which fail to integrate mobile will miss huge opportunities to engage local residents.
  • Devolution - Make digital a key pillar in City Devolution deals. Manchester, Liverpool and Sheffield are already signed up to new devolution deals; but O2 says these cities will still struggle to compete effectivelyl unless they embed digital at the heart of their investment plans.
  • Digital champions - Appoint digital champions to Local Enterprise Partnerships (LEPs). Each LEP needs to have a dedicated digital expert to ensure that local authorities, businesses and other stakeholders are not neglecting the critical infrastructure and skills requirements which enable the digital economy to flourish.
  • Infrastructure - Prioritise the development of digital infrastructure. With informed decision-making by local authorities and reform of the planning and Electronic Communications Code, O2 says coverage and capacity will become more common place and the national and local digital economy will suffer.
Ben Dowd, O2’s business director, said: “This report is a stark reminder that digital plays a crucial role in delivering future economic growth and rebalancing the chronic North-South economic divide currently gripping our economy. Through our Digital Communities pilot we’ve seen first-hand the benefits that relatively simple connectivity, such as new wifi hotspots and smartphones, can bring to an entire town.

“Now it’s time to ensure that no matter where you live or run your business, you can make the most of digital technology and its benefits. That’s why today we are releasing a Digital Communities Blueprint to call on other businesses and government to help more towns to follow in St Helen’s footsteps and be part of a truly digital Britain.”

Mike Palin, Chief Executive of St Helens Council said: “This is a borough that played a key role in the industrial revolution. And now we feel we’re very much at the forefront of a new, digital revolution by showing just what’s possible - and the benefits that connectivity can bring.

“By helping to point the way forward for northern town and cities like ours, we believe St Helens has helped to shape a new digital landscape that will help to rebalance the UK economy.”