Broadband infrastructure and boosting economic recovery The role of Full Fibre in Northern Ireland
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Broadband infrastructure and boosting economic recovery The role of Full Fibre in Northern Ireland JUNE 2020 Richard Johnston Deputy Director, Ulster University Economic Policy Centre Gillian McCausland Assistant Economist, Ulster University Economic Policy Centre A report for Openreach Northern Ireland
Broadband infrastructure and boosting the economic recovery - The role of Full Fibre in Northern Ireland 3 Contents 1 Executive summary 3 2 Recession and recovery 5 3 Economic impact of full fibre broadband 9 4 Northern Irelands digital competitiveness 12 5 Policy support for full fibre in Northern Ireland 20 6 How full fibre can help support the economic recovery 21 7 Conclusion 25 8 Bibliography 27
3 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
1 Executive Summary
The COVID-19 pandemic has swept across the world, necessitating economic restrictions in order to
minimise the transmission of the virus. Fortunately, Northern Ireland was less impacted in terms of
both transmission through the population and mortality than initial estimates suggested. In economic
terms, the pandemic has acted as a disruptor, accelerating many existing megatrends such as online
shopping, automation and digitisation and increased the focus on environmental sustainability. It has
also generated the sharpest and deepest recession in NI’s history.
Changing behaviours
Consumer behaviours, working practices and education have shifted online during the period of
COVID-19 restrictions. Opinion polls suggest that whilst many will welcome the return to the relative
normality of office working and face-to-face shopping and learning, a large proportion also say that
they will not return to the “old normal”, preferring to work, shop and learn from home more in the
future.
Building on competitive foundations
The importance of competitiveness cannot be underestimated. In the long term, competitiveness
determines incomes and standards of living. Digital competitiveness is a core element of a nation
or region’s overall competitiveness. Northern Ireland’s broadband infrastructure is modern and
competitive – especially in terms of access to full fibre. The network was able to cope with significant
increases and shifts in demand as a result of sustained investment from network providers and
previous investment programmes such as Next Generation Broadband and Building Digital UK. As the
economy moves into the reopening and recovery phases, the competitive infrastructure will enable
and assist firms to be flexible in their return to work and lean into the emerging trends that have
resulted from COVID-19.
Top ten themes emerging from COVID-19
The ten key themes that have emerged from the COVID-19 crisis, each of which will impact on
demand for high quality broadband are;
1. Supporting enterprise to reopen and recover:
2. Increased remote working
3. Shift to home learning
4. Supporting childcare
5. Regional re-balancing
6. Enabling green tech
7. Online shopping
8. Accessing government services
9. Enabling digital healthcare
10. Automation and digitisation.
Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland 4
Enabling the return to economic growth
Broadband is a key enabling technology that will help firms and individuals make the most of the
opportunities presented by the fourth industrial revolution and also help to build much needed
1
flexibility into the labour market during the recovery phase and beyond. It will also support a range of
Government objectives including increasing employment opportunities, closing the productivity gap
with GB, the digital divide and helping to address sub-regional economic disparities.
Figure 1 – Full Fibre Broadband and how it impacts economic growth
Looking to the future
Northern Ireland is well placed to make the most of its existing competitive advantage in full fibre
broadband to support the reopening of enterprise and the economic recovery. As a key enabling
technology, it has a central role to play in boosting productivity, employment, economic growth
and standards of living in the longer term in Northern Ireland. Investment and future proofing must
continue if Northern Ireland is to retain its competitive edge in this area and the flexibility that it
brings. Other nations are investing heavily in full fibre networks and Northern Ireland must keep
its focus on maintaining, if not improving its position in order to help grow the economy, promote
inclusive and sustainable growth and wellbeing across Northern Ireland.
5 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
2 Recession and recovery
2.1 Responding to the COVID-19 crisis
2020 will be remembered as a year in which society responded to a global pandemic as governments
across the world restricted travel and trade in order to save lives. Throughout society, individuals
changed how and where they worked, learned and relaxed.
The restrictions imposed halted activity in a range of sectors and changed working practices and
locations, whilst others saw surges in demand as consumer behaviour evolved. These restrictions
caused a global recession, with estimates varying from -3% to -8% for 20201. It is an unusual
recession, caused by the necessity to stop the transmission of the virus through the population and
save lives.
It is therefore unlike any other recession, which in the past were caused by financial crises, stock
market crises, oil shocks or reductions in government spending. The policy response has also been
unprecedented in terms of speed and scale, as has the digital shift towards remote working, learning
and consumption.
2.2 Record highs and record lows
In economic terms in Northern Ireland (NI), 2020 will go down in history as a year in which many
economic records were set – both good and bad. Record high levels of employment and record lows
in unemployment were recorded at the start of the year. Then as the COVID-19 pandemic swept
across the globe, the restrictions caused the sharpest and deepest recession in NI’s history, with
unemployment doubling from March to April and a recession of -7% to -12% 2 expected, deeper and
faster than the 2008 recession which took more than a year to unfold.
Whilst it is not discussed widely at this point in time as the focus is on managing COVID-19 impacts
and reigniting the economy, Brexit is only six months away and will also impact on NI significantly as
the only part of the UK with a land border with the EU. Therefore, it will be essential that Northern
Ireland’s policymakers focus on long-term competitiveness in order to ensure that NI can emerge
from the recession as quickly as possible and increase incomes and standards of living in the future.
Digital competitiveness is one of the key strands of competitiveness and will therefore be an essential
component of the recovery and growth strategy.
The UK, Irish and Northern Irish economies shared similar fortunes in the first of the last two decades,
with reasonable growth during the early 2000s and a two-year recession following the 2008 financial
crisis. Over the last decade however, Ireland’s economy grew rapidly at a compound rate of 5.2%.
In fact, it grew at the most rapid rate of the EU-28 economies, although it should be noted that 2015
includes an adjustment to income arising from Intellectual Property in FDI’s that previously would
have been allocated to other nations. The UK and Northern Ireland’s economic recoveries were much
more muted than Ireland after 2008, growing at just 1.9% and 1.4%3 per annum respectively. In part,
this was due to the focus on austerity policies in order to rebalance public finances. During 2018 –
the latest available historical data – the Northern Ireland economy was valued at just over £42.2bn4,
adding £6.1bn to output in real terms since the low point of 2010.
1
OECD, IMF, Fitch Ratings, S&P Global, Capital Economics & the Economist Intelligence Unit.
2
UUEPC, EY, Danske Bank & KPMG
Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland 6
2.3 NI’s sectoral composition
The three largest sectors in the Northern Ireland economy are retail and wholesale, health and
social care and manufacturing. Together, they account for 42% of employment in Northern Ireland.
2
These are sectors that are heavily impacted by the COVID-19 restrictions. Retail and wholesale have
witnessed a rapid change from in-store to online purchasing and once reopened, will be challenged to
maintain social distancing in many contexts. Health and social work have received a boost in terms of
spending5 and appreciation for workers at all levels as the term essential workers includes all skill and
occupation levels. Manufacturing Northern Ireland reports that two out of three manufacturing firms
had more than 75% of their staff on furlough through the Coronavirus Job Retention Scheme6.
The impact of COVID-19 restrictions has been felt across all sectors, through demand reductions or
increases in some cases, supply chain disruptions and introduction of social distancing or a significant
pivot to working remotely. Those firms that were digital leaders in advance of the pandemic were well
equipped to pivot quickly whilst others have acted quickly to change their methods and ensure that
they can still function. The implications of the crisis vary by sector, but none are immune.
Figure 2 – Employment by sector, NI, 2019
Source: NISRA, Business Register and Employment Survey
2.4 Economic outlook
The latest estimates for Northern Ireland from Ulster University Economic Policy Centre are for a
contraction of more than -12% during 2020, whilst Capital Economics estimates -12% for the UK and
the Central Bank estimates almost 11% for Ireland. Forecasts for 2021 will be dependent on whether a
second wave of infection occurs later in the year and if so, how severe it is, whether or not a vaccine
can be developed and deployed at scale and how long it takes for consumer and business confidence
to return.
3
Office of National Statistics & Central Statistics Office
4
Office of National Statistics Regional Accounts
5
Department of Finance. https://www.finance-ni.gov.uk/sites/default/files/publications/dfp/COVID-19%20funding%
20allocations%2018.05.20%20D4.pdf
6
ManufacturingNI members survey. 2 June 2020.
7 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
2
Figure 3 – NI, UK and Ireland, economic growth and forecasts, 2002-2020
Sources: Data - Office of National Statistics, Central Statistics Office,
Forecasts: UUEPC, Capital Economics & Central Bank of Ireland
Notes: NI & UK are real GVA, Ireland is Real GNP. 2019 and 2020 are forecasts for NI. 2020 are forecasts for the
UK and Ireland
The latest labour market data published in May shows that employment reduced slightly from its
peak of 878,000 to 877,0007 while both the claimant unemployment rate and level almost doubled
to 6.1% and 56,2008 respectively. The economic inactivity rate (those who are not actively seeking
work) remained unchanged over the quarter at 25.8%6. Whilst no data is available for the number on
furlough through the Coronavirus Job Retention Scheme in Northern Ireland, estimates range from
235,000 to 250,0009, which is roughly a third of the labour force.
2.5 Dual challenges of Brexit and COVID-19
Whilst the COVID-19 induced changes have brought about a rapid disruption it is worth noting that
more than two thirds of employees were still working - either at home, or in a socially distanced or key
worker context. Roughly a third were on furlough through the Coronavirus Job Retention Scheme,
with the Government supporting their earnings and employment. During June, there is evidence of
reignition of activity as some workers that were furloughed return to work and travel movements
including HGVs and shipping have increased.
The additional challenge of Brexit will further test many industries. When combined with the
COVID-19 restrictions, these disruptions have accelerated existing trends such as digitisation, remote
working and online commerce. They have also brought more focus to the security of supply chains
and a more acute awareness of the impact of human activity on the environment.
Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland 8
2.6 Road to economic recovery
2
The road to recovery for society, the healthcare sector and the economy will take time as uncertainty
continues to prevail. Undoubtedly, there will be a few bumps along the way, as it will take time for the
economy and labour market to continue and perhaps also as pockets of COVID-19 re-emerge and are
suppressed by further restrictions.
As society plans for the re-emergence of activity and the recovery, it will be important for NI to focus
on the overall competitiveness in order to boost incomes and standards of living. The Department
for the Economy published Rebuilding a stronger economy – the medium-term recovery10 on the 17th of
June, which focusses on competitiveness, inclusion and the green economy. The digital sector, digital
skills readiness, advanced manufacturing, life and health sciences and regional economic balance
all feature in the recovery plan. Each of these are underpinned by Northern Ireland’s technological
infrastructure which is a key element of Northern Ireland’s overall competitiveness.
Ann McGregor, Chief Executive of the NI Chamber of Commerce
and Industry
“ The COVID-19 pandemic has illustrated just how
important connectivity is to the business community
in Northern Ireland. Further investment in digital
infrastructure is therefore essential to not just meet
current demand, but to achieve economic growth and
prosperity and to further establish Northern Ireland as a
digital destination for investment and jobs.”
7
NI Statistics & Research Agency Business Register and Employment Agency
8
NI Statistics & Research Agency Labour Market Report
9
UUEPC
10
https://www.economy-ni.gov.uk/publications/rebuilding-stronger-economy-medium-term-recovery
9 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
3 Economic impact of full
fibre broadband
Full Fibre broadband is the term used to describe ‘fibre to the premises’ (FTTP) broadband
technology. A fibre optic cable is brought right to the premises removing the copper in the network.
The full fibre network is enabled to achieve 1 gigabit download speeds, meaning a 1GB file that would
take seven minutes to download over existing superfast broadband, would take around 42 seconds
with a full fibre connection. Once the infrastructure is in place it has the potential to be easily
upgraded to higher speeds as future technologies drive business and consumer demand for higher
bandwidth.
A number of research publications have focussed on the potential economic impact of the roll
out of full fibre broadband across GB and Northern Ireland. An overview of the main most recent
publications is included below to provide a summary of the potential.
The Centre for Business and Economic Research (CEBR) published ‘Full Fibre Broadband: A platform
for growth’ in October 2019. The research focused on how full fibre broadband could support
the economic growth through the fourth industrial revolution by underpinning new ways of doing
business, working, delivering public services and consuming goods and services. The areas in which
full fibre can benefit the economy are in terms of:
- Increased productivity (output per worker):
- Increased employment as working patterns and locations become more flexible encouraging
new groups to enter the labour market and geographically rebalancing employment
opportunities; and
- The reduction of congestion and pollution, which create significant costs for individuals,
enterprises and society.
In terms of the impact on Northern Ireland, CEBR estimated that the full deployment of full fibre
broadband by 2025 could boost the Northern Ireland economy by £1.3bn and employment by 1.6% as
older workers, carers and working parents were able to engage in the world of work. For context, the
NI economy produced £42.2bn of output in 2018.
During June 2020, the CEBR published a short blog, estimating that 45% - 50% of people are
currently working from home, up from around 12% before the crisis. In the longer term, CEBR
estimate that 25% of the workforce could be working from home on any given day by 2025 and that
digital improvements could increase employment by 1.2m in the UK. They note that homeworking
provides an opportunity to spread digital jobs around the country, although policy intervention will be
required.
Regeneris published research in 201811, which estimated that the roll out of full fibre broadband
could result in an additional £120bn of output over a fifteen-year period. If the increase is shared as
a proportion of existing output across the UK regions, that would translate to an increase in output
of c£3bn, or £200m per annum which would add around 0.5% per annum to economic growth.
Regeneris focussed on the productivity and innovation impacts, supporting new business start-ups
and supporting flexible working as well as the potential for unlocking Industry 4.0, benefits from the
Internet of Things and Smart Cities.
11
https://www.cityfibre.com/wp-content/uploads/2018/03/The-Economic-Impact-of-Full-Fibre-Infrastructure-in-100-UK-
Towns-and-Cities-12.03.18.pd
Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland 10
3
Oxera carried out research in 2019 on the impact of full fibre broadband and 5G at a local level in
England. They concluded that existing enterprises could expect productivity increases of between
0.3% and 3.8% and that new business start-up rates could increase by between 0.4% and 3.2%. The
increase in employment opportunities was estimated at 0.6% to 1.7%. There were also unquantified
benefits cited in terms of reductions in prices as consumers benefit from online competition, local
authorities as increased business starts increased the rates base and benefits to society in terms of
social inclusion.
In terms of NI specific research, DotEcon Ltd were commissioned in 2018 to carry out an assessment
of the economic impact of deployment of full fibre broadband in rural NI. The benefits were
categorised under four main categories:
- Increases in productivity
- Improvement in labour market participation
- Social benefits including distributional benefits and greater digital inclusion; and
- Environmental benefits.
Similar to the CEBR research, DotEcon estimated that the Northern Ireland economy would benefit
from an additional £1.2bn of GVA (or output) by 2033 through productivity improvements, increased
employment and teleworking. They also estimated that 230,000 tonnes of CO2 emissions could be
avoided over the fifteen-year period.
Ofcom has also demonstrated that there is a strong positive relationship between broadband speeds
and economic growth12. In the UK, increasing broadband speeds improved GVA growth by 0.1%
annually. Ofcom found that on average, a country at the highest speeds would grow by more than
0.1% more rapidly per annum when compared to an identical country at the lowest speeds13. It may
seem like a relatively low amount, but compounded over time, small amounts of growth will make a
significant difference to incomes and standards of living.
Figure 4 - The annual GDP effect (%) from broadband speeds, 2002-2016
Source: Ofcom
12
Ofcom, 2018, The economic impact of broadband: evidence from OECD countries.
13
Ibid11 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
3
In addition to the research that was reviewed above, a comparison of economic growth rates and
increasing broadband access over the last decade is included below. The chart illustrates that more
rapid rates of economic growth are positively correlated with increasing access to broadband.
Figure 5 - International comparisons of economic growth and broadband access improvements,
2008 - 2018
Source: UUEPC
The research summarised here from a range of organisations and authors provides an overall
perspective on the key economic and social benefits that are expected from the roll out of full fibre
broadband over the next decade and more. Ministers and policy makers are currently focused on
how and when the elements of the economy that were restricted can emerge and begin to recover.
“Leaning in” to existing trends and technologies that will support and enable economic growth and
employment opportunities will be more important now than in a pre-COVID environment. The roll out
of full fibre will provide an opportunity to lean into the trends that are already underway as part of the
fourth industrial revolution. It will also provide an opportunity to help address structural issues, such
as relatively lower productivity, employment rates and as a consequence GVA per capita and can also
help with addressing geographical inequalities in terms of access to employment and incomes.
Table 1 – summary for forecast economic impacts of the roll out of full fibre broadband networks in NI.Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland 12 Northern Ireland’s digital 4 competitiveness In the context of the recession that Northern Ireland and the rest of the world is facing during 2020 and the potential for full fibre broadband to support economic growth and play a key role in the recovery, it is important to understand how digitally competitive Northern Ireland is at present. The evidence in this section focuses on how Northern Ireland’s broadband infrastructure has improved over time, how it performs in an international and UK context and emerging evidence of increasing pressures from increased demand since the COVID-19 restrictions were implemented. Northern Ireland’s broadband infrastructure has improved markedly since 2018 with the build of full fibre networks reaching 46% of premises, increasing from just over 10% less than two years ago. Many businesses and consumers have taken advantage of the opportunity to upgrade from superfast broadband to full fibre as the network has expanded. These improvements will benefit individuals and enterprises in terms of connectivity, upload and download speeds, helping to improve productivity. Figure 6 - Access to download speeds, Northern Ireland, September 2018-January 2020 Source: Ofcom In an international context, Northern Ireland is relatively competitive in terms of internet access, in the top third of the international league table relative to competitor nations, similar to Ireland. In 2019, 94% of households had internet access – a significant increased from just 60% in 2008. However, in contrast, Northern Ireland also had the highest number of individuals (12%) across the UK who had never used the internet in 2019. Whilst it will take until June 2021 for the 2020 data to be published, it will be interesting to observe how significantly COVID-19 reduces the proportion of individuals who have not used the internet.
13 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
Figure 7 – Proportion of households with access to the internet, EU countries, 2008-18
4
Source: Eurostat
In a UK context in terms of full fibre, NI is class leading – well ahead of the UK average and Scotland,
Wales and England. Almost 47% of businesses and households here have access to full fibre,
compared to 30%* in Ireland and the UK average of 14%.14 As a result of the particularly rural
and dispersed nature of housing development in some areas of Northern Ireland, there is a higher
proportion of householders who currently experience slower broadband speeds, 10.9% of premises in
NI vs the UK average of 3.9%, achieve speeds of less than 30 Mbps. The need to ‘level up’ connectivity
is well recognised and is a key benefit of the full fibre broadband build ambitions.
The full fibre broadband infrastructure build is funded by private sector network providers and
assisted by government interventions to support hard to reach locations. The current BDUK voucher
scheme is administered by the Department. for Digital, Culture, Media and Sports. The Department.
for Economy administered, Project Stratum will provide funding for an enhanced network provision
to 79,000 hard to reach properties by 2024, and the expectation is that full fibre will play a key part
- of the solution delivered. The current and planned investment in Northern Ireland puts it well along
the trajectory required to play its part in helping the UK to meet the Government’s declared goal of
delivering full fibre to the whole of the UK by 202514.
14
https://labs.thinkbroadband.com/local/northern-ireland
*https://fibrerollout.ie/ https://siro.ie/
*https://nbi.ie/
*https://www.comreg.ie/publication/quarterly-key-data-report-q1-2020Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland 14
Figure 8 – Proportion of premises with access to full fibre broadband, May 2020
4
Source: thinkbroadband.com
In Northern Ireland, like other countries, urban areas typically have better access to faster connectivity
speeds. Belfast, Derry & Strabane and Lisburn & Castlereagh council areas are the top three areas
for speeds particularly in full fibre where premises have 73%, 59% and 56% of access respectively.
However, all council areas in Northern Ireland are in the top 80 out of the 419 council areas in the UK,
with 7 out of the 11 Northern Ireland council areas in the top 20. High levels of connectivity and speed
are important for all sectors, but particularly for ICT including cyber, professional and public services
that are concentrated in towns and cities.
Figure 9 – Broadband coverage by council, Q1 2020
Source: thinkbroadband.com15 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
The urban - rural contrast is highlighted by Causeway Coast & Glens and Newry, Mourne & Down
4
council areas having 23% and 18% of premises able to access full fibre respectively, although this is still
ahead of the UK average. In the same vein, Ofcom reports that just 5% of rural commercial premises
had full fibre speed compared to 13% in urban areas15. As such, the need for investment in order to
meet the targets is mainly rural, and these are the areas that are generally more expensive to deliver
services to on a per capita basis and require additional policy support.
4.1 Additional infrastructure pressures
The fourth industrial revolution was already playing its part in increasing demands on the broadband
infrastructure. We increasingly rely on the internet and broadband services for entertainment,
keeping in contact, managing our finances, working and learning. In addition, as we connect and use
a range of devices through the Internet of Things which communicate with each other and store data
additional pressures are added to the network. Ofcom report that 67% of households in NI have TVs
connected to the internet and 82% of adults now own a smart phone16. Even after the COVID-19 crisis
subsides, it is reasonable to expect that infrastructure demands will continue to increase.
Figure 10 – Top ten internet activities, NI, 2019
Source: OfCOM
During 2019, more than a quarter of the UK workforce reported that they could work at home and
just over 6% reported that they only ever worked at home. There are large variations by sector, with
the most technologically focussed reporting that around half of their workforce can work from home
when required. Obviously, those that require face-to-face service delivery and the movement of
goods and services are less able to work from home – making them more vulnerable sectors when
COVID-19 struck. The ONS also reports that those with higher skilled occupations – and therefore
higher earnings – are most able to work from home , meaning that the impacts are disproportionately
focused on lower income workers.
15
Ofcom, 2019, Connected Nations 2019: Interactive report.
16
Ofcom, 2019, Media Nations 2019 Northern Ireland Report.Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland 16
Ann McGregor, Chief Executive of the NI Chamber of Commerce
and Industry 4
“We must acknowledge Belfast City’s listing as the second most
fibered city in the UK. With 72% coverage of full fibre, this will
help visitors recognise Belfast as a modern, forward-looking,
technologically advanced city - supporting business, investment
and tourism.”
Figure 11 – Percentage of the UK workforce that were homeworking, by sector, 2019
Source : ONS
The COVID-19 restrictions created significant additional demands on the broadband infrastructure
as significant numbers of people were working and learning from home, rather than in an office
environment or educational institution18. Openreach reported a 26% increase in network traffic in
Northern Ireland on the week commencing 20th April 2020 relative to 24th February 2020. Network
traffic will also have been more geographically spread, rather than focused in key city and town centre
nodes.
Fortunately, NI’s broadband infrastructure is very competitive and was able to cope with the
additional and changing demands as they arose. It is worth reflecting on how Northern Ireland might
have coped with a similar pandemic if it took place a decade ago when a third fewer households
had access to broadband. The ability of many people to work or learn from home would have been
severely impaired and economic activity would have fallen further.
17
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/
coronavirusandhomeworkingintheuklabourmarket/2019
18
COVID-19 Impact - Openreach’s Network Traffic by UK Region UPDATE - ISPreview UK.17 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
Figure 12 – Openreach network traffic, percentage increase from w/c 24 February to w/c 20 April 2020
4
Source: IPS review and Openreach
4.2 How behaviours might change in a post COVID-19 world
In a post COVID-19 world it is anticipated that working and consumption patterns will change.
Research suggests that existing trends will accelerate as people plan to shop, communicate and work
from home more often once the pandemic ends. These trends are common across the world, partially
due to the fear of returning to public spaces, but also as a result of being more efficient with time and
resources as commuting, fuel costs and congestion are avoided, leaving more available for leisure and
other activities.
Behavioural studies show that it takes six to eight weeks to change behaviours and the disruption
provided by COVID-19 restrictions has provided this opportunity. Whilst the many might revert to pre-
COVID-19 behaviours, at least a significant minority will change, which will place additional demands
on the broadband infrastructure.Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland 18
Figure 13 - Percentage of respondents who say they will do the following post COVID-19, UK, April 2020
4
Source: Global Web Index
Digital healthcare has also witnessed a surge in demand. The use of the NHS electronic prescribing
service in England and Wales trebled to 1.3m prescriptions between February and March19. April data
are not yet available, but it would be reasonable for the trend to increase markedly as that is the first
full month of lockdown. Microsoft Teams was deployed by the NHS in February. In the first week, it
was used 4,800 times. By the following week usage figures increased eightfold to 44,90020. These
technologies represent a change in how services are delivered, reducing the transmission risks to
healthcare staff and patients alike, whilst for example, freeing up time for pharmacists to carry out
other tasks.
The announcement of the Encompass programme, a planned £300m investment over ten years,
that will see the creation of a single digital care record for every Northern Ireland citizen, is further
evidence of healthcare reform driving demand on bandwidth. To maximise the benefit of this, medical
professionals need to be able to access the system from anywhere, at any time21.
4.3 Digital Skills and Equality of Access
Northern Ireland has a strong record in terms of both the quality and reach of broadband internet in
an international and UK context. The success of previous investments (Next Generation Broadband,
Northern Ireland Business Improvement Programme & Superfast Rollout Programme) and other
initiatives have helped to increase access and speeds to remote locations22 allowing more individuals
and enterprises to connect, putting Northern Ireland in a competitive position. Belfast is one of the
leading cities in the UK in terms of connectivity, which will help to attract and retain FDI, build the
export base and support private and public investment.
19
https://digital.nhs.uk/coronavirus/nhs-digital-tech-analytics
20
https://digital.nhs.uk/coronavirus/nhs-digital-tech-analytics
21
https://www.techmarketview.com/ukhotviews/archive/2020/06/11/epic-275m-contract-for-northern-ireland-health-social-care19 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
Simon Hamilton, Chief Executive of the Belfast Chamber
“Belfast is building a growing global reputation as a tech city with
4 world leading financial technology and cyber security clusters. As
well as our city’s ability to produce skilled and talented people,
that reputation has been built on far sighted investments in our
telecommunications network. Through the efforts of Openreach,
Belfast can boast of being the second city in the UK for availability of
1 gigabit capable broadband. That is exactly the kind of infrastructure
we need to continue to invest in and businesses need to avail of if
Belfast is to continue to grow its economy.”
Like Northern Ireland, other competitor nations are actively investing in full fibre and improved
broadband services to increase connectivity, opportunity and productivity and reduce geographic and
income disparities. As a result, Northern Ireland cannot afford to pause. The challenges that remain for
Northern Ireland are to connect more premises to full fibre, especially those on lower incomes or in more
rural areas, where population densities are lower and rollouts are more costly on a per unit basis. The
UK has introduced the “Universal Service Obligation” that aims to ensure that everyone has access to
decent broadband services, defined as an upload speed of 1 Mbps and a download speed of 10 Mbps23.
In 2016, the European Commission reported that 61% of EU citizens on low incomes used the internet
each week compared to the EU average of 79%24. Part of this will be due to the costs involved in accessing
a resource such as a laptop, smart TV or phone and another factor will be the cost of having broadband
or mobile data. The internet can connect individuals to opportunity such as government services, jobs
adverts, learning, entertainment and now, access to welfare supports. Therefore, digital exclusion is an
area of concern for policymakers as more services move online. A positive development in Northern
Ireland was when the Education Authority announced that laptops would be provided to support remote
learning for disadvantaged pupils during COVID-19. It will be important to maintain this equality so
children from low income groups can continue to benefit from digital resources. The Economy Minister,
Diane Dodds also announced an investment of £1.7million for a range of online skills interventions to upskill
and retrain people whose jobs have been impacted by COVID-19.25
Across the UK just a quarter of the population have only basic overall digital skills which may limit their
ability to use online resources for leisure and work, putting the UK in a relatively weak position (no NI
figures are available). Although the UK outperforms Ireland on this indicator. Overall the ability to improve
these skills as well as access will help to boost GB and Northern Ireland’s overall competitive position.
Source: Eurostat
22
Openreach, Community Fibre Partnerships Case study: Castlederg Co. Tyrone
23
Ofcom, 2020, Your right to request a decent download service: what you need to know
24
European Commission, 2017, Human Capital: Digital Inclusion and Skills. https://www.economy-ni.gov.uk/news/economy-minister-
announces-ps17m-support-online-learning-people-impacted-by-covid-19
25
https://www.economy-ni.gov.uk/news/economy-minister-announces-ps17m-support-online-learning-people-impacted-by-covid-19Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland 20
Policy support for Full Fibre
build in Northern Ireland 5
In addition to the private sector funding by broadband network providers, there are a number of
Government funded projects planned for Northern Ireland that will help with the build of full fibre across
the country and contribute towards meeting the UK target for 2025. These are summarised in the table
below. The most significant is Project Stratum due to be awarded later in 2020.
Table 2 – Future Full Fibre projects planned for NI, June 2020
As examples of these projects in action, many communities have come together to claim DBUK vouchers
through a Community Fibre Partnership with Openreach. The scheme is available to communities that are
not currently in any other public or privately financed full fibre build plan. Two practical examples of the
difference that full fibre made to enterprises were provided by Ballymena Enterprise Park and the Nvolve
Group, based in Castlederg. Through these two projects 92 premises were connected to full fibre. They said;
Barry Harper, Founder and Stephen Scullion, Centre
CEO of Nvolve Group Manager of the Ballymena
Business Centre
“Now that we have full
fibre available, it has “Having high speed
really helped our business broadband available at the
increase functionality and Business Centre has not
productivity, placing us in a only increased our own
better position to compete productivity, it also has made
with other tech companies our premises more attractive
around the world.” to new companies who are
looking for a base to run their
business from. We are now
able to cast a wider net to
potential clients such as tech
Both refer to the productivity increased and
companies who rely on high
an improvement in their competitive position, speed broadband to operate.”
demonstrating at a practical level how full fibre
has benefitted their business.21 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
6 How full fibre can help support
the economic recovery
6.1 Pre-COVID-19 forecasts of the impact of Full Fibre
The evidence presented demonstrates that Northern Ireland is in the midst of a rapid and relatively deep
recession. At this point in time, the healthcare crisis is still ongoing, but ostensibly under control and
fortunately, less severe than initial estimates feared. Attention is now turning to the economic recovery
plan, as policymakers consider how and when restrictions will be relaxed or removed, enterprises re-open
and individuals return to work.
Prior to the recession the research demonstrated that full fibre investments are expected to:
- Boost GVA, productivity, employment (especially amongst older workers & carers), business start-
up rates and broaden the rates base for local councils;
- Direct impacts on employment and output as the network is constructed;
- Enable the full potential of innovation, smart technologies, smart homes and smart cities as
devices communicate and share evidence;
- Reduce costs to consumers and enable online purchases;
- Reduce congestion, commuting and the associated negative environmental impacts such as
greenhouse gas emissions; and
- Have the potential to reduce inequalities between regions and sub-regions, income groups and
help address the digital divide.
Figure 14 – Deployment of Full Fibre Broadband and how it impacts economic growthBroadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland 22
The challenges that Northern Ireland faced prior to the recession are going to be exacerbated by the
6
recession. These include lower employment rates, productivity and investment, resulting in lower
standards of living over the longer term. Megatrends such as the fourth industrial revolution, an aging
population and environmental sustainability will continue, although it seems that for now, one of the
megatrends - globalisation - may begin to reverse as supply chain security and the sourcing of goods
and services closer to the point of use is in vogue.
Fortunately, Northern Ireland is very competitive in terms of internet access and well ahead of the UK
in terms of full fibre broadband coverage, giving it an advantage over other areas as a key enabling
technology which will be an essential component of the recovery plan.
6.2 Full fibre broadband and the economic recovery
The COVID-19 pandemic changed how, where and in some cases when we work, learn and relax. Those
sectors that were highly digitally enabled, such as ICT and professional services were able to facilitate
remote working relatively quickly. The existing digital infrastructure enabled many of these rapid
changes to take place. If the pandemic struck in 2010, Northern Ireland would have been less able to
respond as quickly and if it took place two decades ago, it is likely that more limited ability to respond
would have resulted in more significant economic costs.
Looking forward, the top ten key themes that have changed and will impact upon demand for full fibre
broadband by increasing from pre-COVID levels and spreading that demand more broadly across the
network in geographical terms are:
1. Supporting enterprise
Northern Ireland was relatively successful in attracting Foreign Direct Investment projects historically,
as a blend of skills, connectivity and cost competitiveness helped to secure a range of FDI projects.
Connectivity is, quite obviously, important for enterprises that engage in international trade and
investment. Northern Ireland’s competitive position provides it with advantage over other areas with
lower quality broadband access. Sectors such as ICT, professional services, TV and broadcasting, and
advertising are sectors that are forecast by the CEBR26 to grow rapidly as the economy recovers. These
are relatively well-paid sectors that require high quality access to broadband in order to connect with
customers.
2. Increased remote working
Prior to COVID-19, working from home had become an increasingly normal working situation particularly
for sectors such as ICT where 53% had worked from home and 15% did so on a permanent basis. For
all sectors, Northern Ireland’s existing technological and broadband availability has enabled remote
working. In a post COVID environment, it is anticipated that remote working will become more normal
– CEBR estimate that as much as 25% of employees could be working from home on any given day by
2025.
3. Shift to home learning
Online learning has become a necessity and those in education are learning in an online format at
primary, secondary and tertiary levels. Both universities moved quickly to deliver the spring term of
2019-20 online and plans are for at least the first term of 2020-21 to be delivered online. Colleges and
schools are doing the same, with no expectation that children will return to school before September,
and even then, only on a socially distanced and possibly staggered basis.
26
https://cebr.com/reports/using-digital-to-revive-the-uk-full-fibre-broadband-and-the-growth-of-the-digital-economy-could-create-an-
additional-1-2-million-skilled-jobs-by-2025/23 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
4. Supporting childcare
6 It is likely that schools and day-care centres will be unable to facilitate all children in the historical
standard school week. Attendance could be staggered or be for mornings or afternoons only. As such,
the return to normality is likely to require parents to phase back towards office working and reduce
remote working more gradually to enable children to return to schooling.
5. Regional re-balancing
Remote working and learning will have implications for both urban and rural areas, as it has proven
to be viable and, in some cases, more productive than working from office environments.27 Reduced
commuting will disrupt historical patterns in a range of ways. Like all disruptions, there will be both
winners and losers. The environment is a clear winner, as CO2 and other greenhouse gas emissions
will reduce, and air quality will improve. It may also mean that rural areas can “level up” with central
business districts as full fibre broadband speeds enable employment and consumption to take place
closer to home for many who would otherwise commute.
6. Enabling green tech
Smart cities, smart homes, smart ports all require insights from sensors that are connected through
the Internet of Things. The technology will enable savings to be made in terms of energy and water,
reducing the environmental impact of human activity. Wearable technologies, phones, TV’s and many
more devices are connected and are becoming more pervasive in society, increasing broadband
network demands.
7. Online shopping
Online shopping was an increasing trend that pre-dated the COVID-19 pandemic. Restrictions on
trade and travel meant that consumer behaviour changed very rapidly. Online purchasing and delivery
became almost necessary in a short space of time. Barclays May 2020 consumer survey found that
in-store spend was down by half in May and online spending was up by a quarter28. These spending
patterns are likely to become ingrained over a period of time – indeed research suggests that it takes
6-8 weeks for behaviour to become automatic. After the crisis ends, patterns may revert to some
extent, but it is highly unlikely that they will return to pre-COVID levels.
8. Accessing government services
Government services were also moving online in advance of the COVID-19 pandemic. Like many other
activities, the pandemic will help to accelerate these trends. Passport applications, driving licences,
planning applications, court appearances, grant applications etc. are increasingly carried out through
online platforms and the restrictions will help to normalise the online processes over face-to-face
interaction.
27
http://www.businesseye.co.uk/pwc-survey-shows-home-working-working/Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland 24
9. Enabling digital healthcare
Digital healthcare is an area in which there are currently unexploited opportunities in NI. The crisis
has enabled the use of rapid technological adoption, which in normal circumstances would take much
6
longer. Online GP consultations, electronic pharmacies and digital patient record management can all
help deliver healthcare services remotely and more efficiently.
10. Automation and digitisation
Increasing levels of automation and digitisation were already a feature of the economy prior to
COVID-19 as the fourth industrial revolution created – and continues to create new technologies,
robots, AI and machines that learn from experience. The pandemic has accelerated the adoption of
technologies and caused firms to consider how and where they can automate products and processes.
Robots, cobots and the Internet of Things provide a range of potential solutions to tasks that are risky
for humans – those that require cleaning or sanitisation or tasks in which it is difficult to ensure social
distance between employees. Automation was already on the agenda for many firms, but the pandemic
has forced a reassessment of those plans and brought forward investments that might have happened
next year, or the year after.
In each of these top ten trends that are likely to result from the COVID-19 crisis, and building upon the
existing evidence of the economic benefits of full fibre broadband, it is clear that access to 1 gigabit
capable broadband is important to create jobs, boost productivity, support enterprise starts, reduce
costs, enable access and smart technologies, support flexible working and can also reduce costs,
commuting and greenhouse gas emissions. With a supportive policy framework in place, full fibre
broadband can also assist in reducing spatial, income and digital disparities across the population,
helping with the rural - urban levelling up in Northern Ireland.
28
https://www.barclays.co.uk/content/dam/documents/business/manage-your-business/UK_Consumer_Spending_Report_
May_2020.pdf25 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
7 Conclusion
The COVID-19 pandemic has swept across the world, necessitating economic restrictions in order
to minimise the transmission of the virus. Whilst the personal toll for those that are affected is
immeasurable, at this point it would seem that Northern Ireland has been less impacted in terms of
both transmission through the population and mortality than initial estimates suggested. As the
transmission rate has fallen, Northern Ireland has started to focus on reopening for business and
emerging from the recession and evidence suggests the rate of economic decline slowed markedly in
May29. The pandemic has acted as a disruptor, accelerating many existing megatrends such as online
shopping, automation and digitisation and increased the focus on environmental sustainability.
Changing behaviours
Consumer behaviours, working practices and education have shifted online during the period of
COVID-19 restrictions. Opinion polls suggest that many will welcome the return to the relative
normality of office working and face-to-face shopping & learning. However, a large proportion also
say that they will not return to the “old normal” preferring to work from home more in the future.
Therefore, to some extent the changes in behaviour and practice are here to stay, which will mark a
step up in the demands on the digital infrastructure in a post-COVID-19 world.
Building on solid foundations
As working practices and locations changed in response to the pandemic, Northern Ireland’s
broadband infrastructure was able to facilitate increases in demand of 25% and shifts from city and
town centre hubs to more dispersed locations as people and students worked and learned remotely.
Consumption also moved online and away from face-to-face transactions and online gaming
increased markedly. The ability of the broadband infrastructure to cope with these rapid changes is
due to sustained investment by broadband network providers and historical investment programmes
such as Next Generation Broadband, Northern Ireland Broadband Improvement Project & Superfast
Rollout Programme.
A competitive digital infrastructure
The importance of competitiveness cannot be underestimated, as in the long term, it determines
incomes and standards of living. Northern Ireland is experiencing the deepest recession in its history
and the focus is now turning to reopening and recovery. Digital competitiveness is a core element of
a nation or region’s overall competitiveness.
In an international context, Northern Ireland’s digital competitiveness is very good – in the top third of
competitor countries and 94% of households are accessing the internet, just four percentage points
behind the Netherlands which is ranked first with 98%.
In terms of full fibre, Northern Ireland leads the way in the UK, vastly outpacing Scotland, Wales and
England. 46% of premises in Northern Ireland are able to connect to full fibre, compared to the UK
average of 14%, providing Northern Ireland with a competitive advantage in terms of full fibre and
associated upload and download speeds.
29
NISRA Labour Market Report. Ulster Bank PMI.Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland 26
Enabling the return to economic growth
The evidence presented in this paper is clear that full fibre broadband is a key enabling technology
that will help firms and individuals make the most of the opportunities presented by the fourth
7
industrial revolution and also help to build much needed flexibility into the labour market during
the recovery phase and beyond. It will also support a range of Government objectives including
increasing employment opportunities, closing the productivity gap with GB, attracting FDI, helping to
address sub-regional economic disparities and the digital divide.
Fortunately, Northern Ireland is well placed to lever its existing competitive advantage in full fibre
broadband and other fibre based broadband infrastructure. Whilst there are challenges for some
areas, these are actively being addressed by a range of policies and projects and collaboration
between the public and private sectors in order to meet Government targets of Gigabit enabled
broadband for all by 2025.
Top ten themes emerging from COVID-19
The ten key themes that have emerged from the COVID-19 crisis are:
1. Supporting enterprise;
2. Increased remote working;
3. Shift to home learning;
4. Supporting childcare;
5. Regional re-balancing;
6. Enabling green tech;
7. Online shopping;
8. Accessing government services;
9. Enabling digital healthcare; and
10. Automation and digitisation.
Each of these themes requires a competitive and fully functioning broadband infrastructure. Northern
Ireland is competitive at this point in time, especially in terms of full fibre. However, competitor
nations will also be focusing on boosting their digital competitiveness in order to grow their
economies and improve standards of living. Broadband infrastructure development is a dynamic and
ever-changing playing field and Northern Ireland must endeavour to maintain or improve its position
in order to grow the economy and increase incomes and standards of living in the longer term.27 Broadband infrastructure and boosting economic recovery - The role of Full Fibre in Northern Ireland
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