Yahoo Finance Major research group identifies a key way to close regional economic gaps
The National Institute of Economic and Social Research (NIESR) has claimed that a boost in digital infrastructure would lead to a reduction in regional disparities across the UK.
It calls for “significant investment in digital infrastructure to increase the coverage of ultrafast and full fibre internet for everyone in the UK”, in a new report published on Tuesday.
Sighting notable disparity in the current roll out across the UK, it said three quarters of premises in London have access to ultra-fast broadband while only 31% and 45% have access in Wales and the North East respectively. Disparities in access to full fibre are even worse, with only 2% of the North East having access, compared with a quarter of Northern Ireland.
The issue of broadband access has made political headway recently, with the Labour party promising to invest £20.3bn into rolling out full fibre by 2030.
READ MORE: Labour claims NHS at risk of privatisation under US-UK trade deal
NIESR report said that “people living and working in a modern economy need access to high-speed internet, but currently digital infrastructure is highly unevenly distributed across the UK’s regions”, and that access to digital infrastructure is one of the key drivers around regional inequality, as well as education and spending on transport.
NIESR principal economist Ana Rincon-Aznar said: “Considering that digital technologies are becoming ever more important in people’s personal and professional lives it is obvious that a lack of access to fast internet is a driver of geographic disparities.
“Speeding up the coverage of ultrafast and full fibre internet for everyone in the UK may help to reduce regional disparities as the current access to high-speed internet is unevenly distributed across the country.”
READ MORE: Amazon most 'aggressive' in $100bn global tax avoidance
While digital infrastructure has been a key driver behind regional inequality, it is far from the only cause. Educational disparity, which in turn has a knock-on effect on regional productivity disparity, has worsened since the financial crisis.
Government budget cuts since 2010 have also had an effect. Local government in England, and particularly cities in the North of England have been the hardest hit.
Business investment, especially around research and development, remains weak across the UK, and investment in infrastructure is unevenly distributed, with London receiving a disproportionately high share of spending on some major projects.
While party manifestos have led to a lot discussion around correcting regional disparity, significant positive action is required to ensure that existing disparities do not persist.
