Innovation UK > News > Innovation UK Vol6-1 > Innovation for a Digital Britain

The rapid growth of digital technologies in Digital Britain is changing business models and raising complex questions which affect business and consumers alike. Questions such as who should pay for the extra cost of upgrading internet connections in remote rural areas in Digital Britain; should some bits of internet traffic have higher priority than others; and what services will we be able to access when broadband is a hundred times faster? The answers to many of these questions will only be found through a process of innovation.

In June 2009, the government published its Digital Britain report, outlining the vision for ensuring that this country competes in a digitally enabled world. As well as policy initiatives, the report included a strong emphasis on the role of innovation in delivering the changes which will be needed in Digital Britain.

At the same time the Technology Strategy Board published its own document, Our Strategy for a Digital Britain, which identified three areas where innovation should focus:

• The economics of the network: to ensure that physical infrastructure can be installed and maintained in a cost-effective and sustainable way, and at the right scale for future needs;
• The economics of content and services: to enable a fair and efficient flow of revenue across the value chain from content and service consumers to producers and providers; and
• Access, protection and enablement: to ensure that the entire infrastructure, and the interfaces onto it, meet users? expectations of quality of service, security, usability and flexibility.

The economics of the network in Digital Britain

The existing UK internet infrastructure is largely based on BT?s copper telephone network, capable of broadband speeds up to 8Mb/s but often achieving much less. Since internet traffic doubles every two years, a national programme of upgrades is needed. The government?s Universal Service Commitment, and the wave of Next Generation Access deployment that will follow, will drive this into the furthest reaches of Digital Britain.

The economics of content and services in Digital Britain

The internet offers the opportunity to reach a wide public at a low cost, but brings with it serious issues about how to make business work online. Content providers are particularly affected, as existing business models are undermined by the ease of copying and passing on content ? from music and video to news and books not just in Digital Britain but around the globe. When information is the valuable commodity, we need a fundamental rethink of economics. Other service industries are also being revolutionised by increasing internet and mobile phone use. Examples include online retail, internet banking, remote healthcare, smart metering of energy, and the whole business communication environment from video-conferencing to cloud computing.

Access, protection and enablement for Digital Britain

Users have requirements beyond simply being connected to the internet. The acceptability of services is affected by many factors, including privacy, trust and security, quality of service, and inclusion and access. The government also has an ambition to improve access to public services and publicly held information, one of the drivers behind the broadband Universal Service Commitment.

As more services move online, these factors will become increasingly critical, and may require solutions which are not yet available in Digital Britain.

What needs to happen?

Looking beyond the immediate policy and regulatory issues addressed in the Digital Britain report, there are deeper issues which require innovations and improvements. Firstly, business needs the confidence to invest. Infrastructure investors need to understand how they will recoup their investment through the revenues from the network and the services running on it ? and service providers need to know customers will have the access they need. Secondly, we need innovation in enabling technologies; those used to operate the network, such as identification of users and protection of their identities, and those that underpin business models, such as collection of micropayments.

The third need in Digital Britain is for co-operation and collaboration along the value chain. Individual businesses cannot solve these problems on their own; we need agreements that allow several to co-operate in the delivery of a service, and for them all to profit. Finally we need to understand customers. Launching new technologies and services is risky, but the risks can be reduced by understanding better what customers want, how they prefer to pay for it, and how they will actually use it.

The Technology Strategy Board?s role for a Digital Britain

The Technology Strategy Board has been working with businesses and organisations across the entire digital sector, both private and public, to understand their innovation needs. In 2009 we assigned an initial budget of £30 million to help address the innovation challenges of Digital Britain and now have a number of programmes under way. In the autumn we ran a £2 million competition for feasibility studies to develop proposals for projects in four areas: enabling technologies for the internet; applications and services for Digital Britain; access to public service information; and cost-effective deployment and operation of digital infrastructure. These projects will be well positioned to feed into further research and development work in 2010.

The question of collaboration along the value chain is also being tackled, and is a key theme of a new research and development funding competition opening in summer 2010. A major new initiative, announced in 2009, is the UK Digital Testbed programme. This will create an environment where businesses can try out new technologies, services and operating models, and gauge the reaction of their customers. The Testbed will involve thousands of volunteer households at multiple locations, who will have access to a network and a body of services that look like the internet of 2015-2020. The Technology Strategy Board?s competitions process for research and development projects will provide a stream of new services and technologies for test, keeping the offerings on the Testbed fresh and at the cutting edge. The Testbed will go live in phases through the second half of 2010.

The new realities of digital business are throwing up a range of fascinating issues and opportunities for innovation in Digital Britain. It is a complex area, but by working together business, researchers and policymakers will be able to make the most of this new world for the long-term benefit of the UK.

For more information on the Technology Strategy Board?s work in the digital arena, including forthcoming competitions, visit www.innovateuk.org.