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Digital technologies are key to tackling the regional prosperity gap, say academics

24 May 2019

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Digital technologies are helping independent businesses be more productive during what is a challenging economic period, research shows.  

The Economic Impact Report for Wales 2018, which was compiled at Cardiff University, draws on survey data collected from 479 small and medium enterprises (SMEs) as part of the 2018 Digital Maturity Survey.

This report forms part of the Welsh Government’s Superfast Broadband Business Exploitation (SFBE) project, part-funded by the European Regional Development Fund (ERDF).  The project also engages businesses across Wales, supporting them to adopt and fully exploit digital technologies enabled by superfast broadband.

Researchers estimate that businesses who have adopted broadband saw additional sales of £166.8m last year, of which £91.5m was associated with superfast broadband use. Further analysis reveals that the use of broadband enabled technologies could have improved sales prospects for around 40% of SMEs in Wales.

The figures also show that 48,600 SMEs, which includes 24,500 superfast broadband users, could have seen a sustained employment increase as a result of adopting the latest broadband technology.

Professor Max Munday of the Welsh Economy Research Unit, based at Cardiff Business School, said: “Our results indicate that businesses using new tools facilitated by broadband have experienced increases in sales and employment in 2018, with the greatest successes associated with superfast broadband users and micro businesses.

“The effects experienced by SMEs from the adoption and use of broadband are, however, smaller than those reported in 2017. These differences may be due to some levelling off or decline in the impact of broadband adoption as it becomes more fully integrated into working practices. But it is also likely to be a reflection of the current economic climate.”

The full findings of the report were discussed at a conference with academics, policymakers and business leaders on Wednesday (May 22). ‘Digital Technologies, Productivity Gains and Regional Resilience: An SME Focus’, heard success stories from businesses around Wales who are using the improved ICT infrastructure to their advantage.

Professor Munday added: “Businesses in Wales face challenging times as they work against a backdrop of poorer economic conditions. But those showing gains are often ones who are using digital tools to improve their efficiency and reach. It will be interesting to see how these companies evolve over the coming year; our continued research will provide further insights into how new technologies are driving them to innovate and expand.”

Superfast broadband take-up is currently at 53% among Welsh businesses.  More than nine out of 10 premises in Wales can now access superfast broadband following the rollout of the Welsh Government’s Superfast Cymru programme.   Measures to reach the final premises include a further rollout with Openreach, an enhanced Gigabit Voucher scheme which will offer assistance for businesses as part of a community project and the Access Broadband Cymru voucher scheme.  

To ensure businesses make the most of the opportunities on offer the Welsh Government is providing support to SMEs to understand, adopt and exploit the benefits that fast broadband provides through its £12m Superfast Business Wales scheme.

Deputy Minister for the Economy Lee Waters said: “We have transformed the digital landscape in Wales through the rollout of Superfast Cymru, which has brought superfast broadband to areas where commercial companies had no plans to reach.  We want businesses to make the most of this, as adopting innovative digital tools can make a real difference for them as this report shows.  That is why we have invested £12m ERDF funding to help businesses exploit superfast broadband and reap the benefits.

“We are now working hard to reach the final premises with a range of schemes in the areas where there is no private rollout planned.”

The report can be accessed here: https://www.cardiff.ac.uk/superfast-broadband-project/economic-impact-research

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