The UK’s tech community is thriving, but is the nation’s existing broadband network helping or hindering innovation? Sheena Campbell explores.
Gone are the days when connectivity was an afterthought for tenants – now it’s seen as vitally important alongside basic utilities.
But is connectivity keeping pace with the burgeoning tech community and what is being done to improve it?
Ofcom’s Connected Nations report, published in December 2015, found only 68% of SMEs had access to superfast broadband in the UK, compared to 85% of all premises.
This left more than 400,000 SMEs without superfast broadband.
An SME report found broadband was essential – 60% said fixed internet was ‘absolutely vital’ with 80% rating it 8-10 in terms of importance.
However, 15% claimed their growth had been hampered by a lack of suitable communications service.
“Follow-up qualitative research focusing on SMEs who thought their growth had been hampered found the key product or service participating SMEs claimed hampered business growth was the lack of availability of superfast broadband connections,” said Harry Rippon from Ofcom.
“Superfast broadband was deemed an essential utility to many businesses, rather than a luxury.”
With an updated Connected Nations report due in December, we spoke to those dealing with connectivity in the commercial property sector.
A major factor
James Nicholson, head of the creative and tech team at Knight Frank, said while connectivity used to be something tenants thought about very late in the process – leading to delays – it is now a “major factor in the decision making”.
“It is not just tech and creative operators that are concerned with connectivity, albeit that it is crucially important to those businesses,” he said.
“Connectivity is the lifeblood of almost all businesses now.”
He said tenants now ask more about connectivity, including whether there is fibre, whether there is a standardised agreement in place or whether they will have to start from scratch with a new wayleave agreement and its resilience.
“Connectivity, after cost and location, is now seen as the third key deciding factor in the process of choosing a property,” said Nicholson.
Recognising the importance
Tom Redmayne, UK director of WiredScore, said businesses today cannot survive without reliable internet.
“Where once cost and location were the main factors behind office moves, digital connectivity is now equally a fundamental driver of where people choose to work,” he added.
“And with the impending arrival of new technologies such as 5G, it’s more crucial than ever that digital infrastructure is available in order to allow buildings to serve as flexible, relevant and aspirational platforms for the businesses of tomorrow.”
WiredScore provides an independent benchmark for commercial property connectivity.
“Unfortunately, many occupiers face issues with connectivity; poor building infrastructure can affect the building’s internet resiliency, and issues with wayleave agreements for telecom providers can lead to delays in an occupier getting connected,” said Redmayne.
“In a city like London, compared against other global cities such as New York, these issues are exacerbated further with challenges presented by its older buildings, traditionally smaller structures, and in some areas, cobbled streets.”
However, he believes the picture is improving.
“Fortunately, landlords are beginning to understand the effect that a building’s connectivity can have on its long term value.
“This plays a huge part in retaining the UK’s position as an attractive global centre, especially in the face of Brexit.
“Now more than ever, landlords need to work closely with the telecom industry to design the infrastructure needed to cope with the technologies of tomorrow.”
Sebastian Abigail, from Hightower, a leading leasing management platform, believes having a standard which landlords aspire to is one of the key ways to see improvements.
“As something becomes important to people it is always very important to have a single, reliable, well-known branded benchmark,” he said.
“If you look at the last phase of impact around buildings it was sustainability and the BREAAM rating – that was basically the gold standard for sustainability. I think what’s really exciting about what WiredScore is doing now is they are doing the same for connectivity.”
He is positive about the improvements to connectivity across the city with Wi-Fi calling, the ability to access the internet on the tube and increased access to public Wi-Fi when out meeting clients.
“Four out of five coffee shops that people meet in now have decent Wi-Fi connections,” he said.
“That has made such a massive difference. If you go to a coffee shop and it doesn’t have Wi-Fi it has to be a seriously good cup of coffee.”
A voluntary code
To help tenants whose connectivity does fall below expectations, at the end of September Ofcom’s Voluntary Business Broadband Speeds Code of Practice came into force.
It aims to provide ‘accurate and transparent’ speed information, manage speed-related problems and allow customers to exit contracts without penalty if speeds fall below a minimum threshold.
One of the providers to sign up to the code was Virgin Media.
“Signing up to the code shows we are committed to our business,” said Mike Smith, director of SME, Virgin Media Business.
“Small and medium businesses need reliable, secure, high speed internet access in order to thrive.”
He believes London’s tech cluster is in a unique position to succeed because it is the only place with all the functions of a global city in one place.
“Unlike New York and San Francisco, London is the site of a national government,” he said.
“Unlike Berlin, it is a global marketing and PR hub, and a financial services powerhouse. This confluence of diverse talent means that London leads the world in industries such as FinTech.
He went on to say professional services firm EY found London stands only behind San Francisco as the city most likely to create the next big tech giant.
However, Mike believes more could be done to help London’s tech cluster succeed.
“The government could do more to make life easier for startups by reintroducing its broadband voucher scheme, which allowed entrepreneurs to apply for grants to cover the cost of installing faster broadband,” said Smith.
The government is currently analysing consultation results on its Review of Business Broadband and will use this information to improve access to superfast broadband for businesses. Doing so would serve to make the UK an even more attractive location for tech firms to establish and grow.
This article first appeared in Issue 12 of our print magazine – The HealthTech Issue.